Webinar: 2020 Nebraska Farm Custom Rates Overview
Department of Agricultural Economics
Author
07/30/2020
Added
75
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Description
With Glennis McClure, extension educator and farm and ranch management analyst, UNL Agricultural Economics
This webinar will provide a summary of the 2020 Nebraska Farm Custom Rates report, with information on how the data might be applied.
A survey of agricultural custom operators is conducted in Nebraska every two years. A total of 217 survey responses were received in 2020 with information reflecting the current rates charged by custom operators for machine hire services and other work they provide for neighboring farms and ranches or as part of a business enterprise that covers a broader area. Survey participants identified by Nebraska Extension personnel, or in some cases, self-identified custom operators, received a paper survey or a link to the custom rates survey online.
Searchable Transcript
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- [00:00:00.000]Jim Jansen: By the Department of Agricultural Economics here at the University of Nebraska, Lincoln along with Nebraska extension.
- [00:00:07.500]Jim Jansen: Today I'd like to welcome you to our webinar. My name is Jim Jansen I work as a member of their risk management outreach team here at the University of Nebraska on topics related to farm and ranch management today's webinar.
- [00:00:21.960]Jim Jansen: We will be talking on
- [00:00:24.210]Jim Jansen: matters related to the custom rates survey and report this survey is conducted every other year in years that are even numbered. So we have our most recent survey results will be discussing for 2020
- [00:00:39.540]Jim Jansen: Currently up on your screen. We also have our schedule for the early August timeframe and the topics that will be discussed, as I mentioned, today we will be
- [00:00:49.050]Jim Jansen: Having our the custom rates August six will be having the financial implications of
- [00:00:56.910]Jim Jansen: Drought certain areas of the state is route as well as surrounding states are suffering from that. And then in mid August on August 13 will be taking a look at marketing of corn and soybeans with the was the report, they'll be coming out around then.
- [00:01:13.680]Jim Jansen: One other thing I wanted to point out is, given the current financial straight that many producers as well as anchor businesses are replacing
- [00:01:21.600]Jim Jansen: Relates to AG stress and the Nebraska rural response hotline is a great resource that if you'd like to visit with someone about issues that might be out there, especially if you're an operator where they're farmer or rancher
- [00:01:36.330]Jim Jansen: They can help out with legal matters as well as financial clinics.
- [00:01:40.320]Jim Jansen: Mediation and things of that nature.
- [00:01:43.380]Jim Jansen: Michelle Saul's one of the folks over there. That does an absolutely great job of helping many folks through challenging times
- [00:01:51.030]Jim Jansen: And if you'd like to visit with them. They have a free one 800 number you have something to scribble it down with it's 1-800-464-0258
- [00:02:02.970]Jim Jansen: And there can also be resources found related to mental well being given the current stress that many folks are expressing at rural wellness that he went L that edu.
- [00:02:18.240]Jim Jansen: So once again to great resources to pass out. Folks, if you're an agribusiness professional owner and operator that
- [00:02:24.660]Jim Jansen: Says extremely experiencing some tough things right now we have the Nebraska rule response hotline. Once again, they have free
- [00:02:32.730]Jim Jansen: Unbiased legal sessions, legal and financial sessions across Nebraska with an actual agricultural attorney, as well as a financial professional and also Nebraska extensions efforts related to the current dynamics that we're experiencing can be found at World wellness di Q AMP l.edu
- [00:02:52.440]Jim Jansen: But with that being said, we want to go ahead and get kind of to the topic at hand, today's webinar. If you have any questions, just go ahead and
- [00:03:01.200]Jim Jansen: type them into the chat box. I will be monitoring the chat questions as Glynis is presenting survey findings and helping her through the Q AMP a session today. So with that being said, every two years, our department.
- [00:03:15.390]Jim Jansen: conducts a survey of agricultural custom operations. So think machinery combining planting, things of that nature.
- [00:03:24.150]Jim Jansen: And we provide a statewide report on these custom services that producers typically might hire out if they have the need for it survey findings are for the entire state of Nebraska and they were just compiled just recently about a month ago they were put out so
- [00:03:42.480]Jim Jansen: To get help.
- [00:03:44.670]Jim Jansen: So for that being said, Today I'd like to welcome Glynis buckler, who is our extension farm ranch.
- [00:03:49.740]Jim Jansen: Management analyst and I also co authored three port worth her, but she will do a great job today highlighting what's in there and what we can take from them.
- [00:04:01.230]Glennis McClure: All right, thank you him. You can see my screen now. Is that right,
- [00:04:05.940]Jim Jansen: Yep, you're good to go.
- [00:04:07.260]Jim Jansen: Alright. Okay. Alright.
- [00:04:10.380]Glennis McClure: So I've got Jim and my contact there we get questions. Quite often about the customer. It's report. So there's our information and again at the end.
- [00:04:19.500]Glennis McClure: Of the presentation. Our contact information will also be presented and I believe you know these webinars are recorded and so you can find that again@farm.eu and l.edu and copy of the slides should be available to if you would like those two so
- [00:04:38.730]Glennis McClure: All right, as As Jim said he helped co authored this report my very grateful for his work with that. He also works with the farm real estate report.
- [00:04:48.240]Glennis McClure: And then I have duties and working with livestock and crop budgets and so those are kind of the sort of the things that we encompass in in our work as extension educators
- [00:05:02.160]Glennis McClure: So our agenda today will include just some overview of the procedures that we use in our custom rate survey, and we'll talk about some observations, I'll, I'll
- [00:05:14.940]Glennis McClure: provide to us some history because we've got a number of years behind us with the customer service. So we'll talk a little bit about what some of those figures look like and then we'll do an example. At the end of how you might use the survey and consider setting rates with that.
- [00:05:34.020]Glennis McClure: Our disclaimer is again that these are rates are reported as of the spring of 2020
- [00:05:40.470]Glennis McClure: Beyond considering the rates reported in the survey custom operator should consider their cost of machinery labor and fuel as they set the rates. We'll talk a little bit more about this as we get into presentation and the information provided in the customer. It's reports.
- [00:05:57.720]Glennis McClure: Should be used only as a guide when figuring rates and charges for custom operations. Again, it's not something that you necessarily want to take verbatim. And you also should consider, as I mentioned before, what your own costs are as you set as you set rates.
- [00:06:14.430]Glennis McClure: So just some general information about the custom rates report for 2020 this survey was provided in print in in an online survey format.
- [00:06:27.120]Glennis McClure: To a list of farmers and ranchers that have been identified as providing custom operations of some type in their area.
- [00:06:34.140]Glennis McClure: We keep a list, we go back to that list every couple years we try to add to it. I know it has good harvest days I've talked to a number of young producers that are getting into doing custom work and I asked them if they wouldn't mind receiving a survey, either in paper or online.
- [00:06:50.490]Glennis McClure: We had 217 but we'd say usable surveys that provided data for the report, two thirds of those we received back by the US Mail and a third of those
- [00:07:05.700]Glennis McClure: Responses came through on using the online. So we asked about 100 over 150 different machine operations and custom services are included in the report, there's a lot of data to screen through and I'm always thankful
- [00:07:20.010]Glennis McClure: For Jim's knowledge and working with the Excel format that we use and and sorting through that data. So it's quite a tedious process, getting the surveys entered and getting the analysis done
- [00:07:34.260]Glennis McClure: So we asked that rates provided so those that are reporting, we asked them to include coverage on the cost of their machinery or implement
- [00:07:43.530]Glennis McClure: The power unit, if you will, the labor, not the material or input expenses unless otherwise indicated into questions. So for instance hain is one of those things.
- [00:07:54.990]Glennis McClure: That they would most generally include the twine. The wire or the netting that they use as they fail to hey
- [00:08:03.030]Glennis McClure: And please note that the custom rates reported can vary greatly and may not include the full economic cost of reforming the work
- [00:08:12.900]Glennis McClure: Some might only charge for fuel and labor, while others make certain they are charging to cover all of their costs, including depreciation on equipment, the personal property taxes, a charge for risk and a charge for
- [00:08:28.260]Glennis McClure: Return to management so it can really vary as to what you see in the report as results.
- [00:08:36.990]Glennis McClure: So our report is divided into two parts. And same with the survey we kind of follow the same lines, there is that the first part of the survey focus on focuses on spring and summer.
- [00:08:50.580]Glennis McClure: Farming ranch operations. So here's a list of of what we asked in the first part of that survey and in the actual written report, there is a PDF copy online and I've got that down in the
- [00:09:03.300]Glennis McClure: In the footer here farmed@ul.edu forward slash customer rates. Um, and that starts on page six, so the part one of the full report starts on page six of that of the of the report.
- [00:09:21.750]Glennis McClure: The second part of the survey focuses on fall operations such as harvesting hauling grain and livestock and miscellaneous custom work activities. So there's a list there of what's included in that part two.
- [00:09:40.740]Glennis McClure: We take the data. And of course, we show. Steve information so we do a cumulative
- [00:09:47.700]Glennis McClure: Piece on it with you know everything as far as state information, but also we look at the eight different reporting districts for Nebraska using the USDA National eggs to statistic service district outline and it's similar to what Jim uses in the real estate report to
- [00:10:05.220]Glennis McClure: So we asked survey participants were in Nebraska. They provide custom services so that the survey results are shown by these different districts
- [00:10:15.780]Glennis McClure: And again rates can vary from place to place for a number of reasons, including in some areas, you know, the customer operations just may not be very available. So there you might see
- [00:10:26.550]Glennis McClure: A higher charge if there's just not very many folks doing that service in your area or the commonality of the custom operation in that area. The terrain could make a difference.
- [00:10:38.400]Glennis McClure: The location, how far does the custom operator have to travel to get to the site and sometimes the size of the field or the area covered can make a difference in how someone's looking at it and how they charge
- [00:10:53.370]Glennis McClure: So I'm just going to go through some of the figures that we show in the report, this is just an example harrowing spike or spring to rate per acre.
- [00:11:02.010]Glennis McClure: And the number reporting so rates entered in the report are included. If there are three or more responses in total in total by the state or by district. Okay, so in this case we have nine total that reported for the state.
- [00:11:18.930]Glennis McClure: There were five of those coming from the Eastern District. It's like, where did the other four come from, well we didn't have more than three in any one of these other districts. Therefore, we have the pound sign, indicating that. So there are other
- [00:11:35.580]Glennis McClure: figures in the state figure, but we just didn't report it by district, because we were lacking numbers with that.
- [00:11:46.290]Glennis McClure: Other factors we show or the figures we end up with are average. So the average shown in each operation provides an estimate of the prevailing charge for an operation.
- [00:11:57.330]Glennis McClure: The real reliability of this figure improves as a number of responses increase, of course, and the size of the range should also be considered as, in some cases, the range can be wide.
- [00:12:09.690]Glennis McClure: So the range figure here shows the minimum and maximum amounts reported
- [00:12:16.500]Glennis McClure: A wide range might reflect on the fact that there are differing conditions under which the work was performed and in some cases the custom operator may have added expense and traveling to and from the site.
- [00:12:30.060]Glennis McClure: And may include those added charges beyond what others are charging okay there again, it makes a difference, perhaps
- [00:12:36.690]Glennis McClure: What's available in your area, how far they have to go and so on. So that's why, in some cases, you might see a wide disparity disparity in in rates, like here in the north area.
- [00:12:47.280]Glennis McClure: Anywhere from 15 to $33 on drilling soybeans. So there's a pretty good range there. Right. And then the most common figure or the mode is the rate reported most often for the custom higher service.
- [00:13:01.530]Glennis McClure: Often the average and motor pretty similar. We do not include a most common figure when any value fail to be reported more than once, or when two or more values are reported the same number of times.
- [00:13:16.230]Glennis McClure: So like for instance in the central area here. We don't show a most common figure there because it could be
- [00:13:24.840]Glennis McClure: Well, you know, they could all been different. The answer might have been 1918 was reported 20 was recorded so we didn't have enough. We didn't have two or more to show a most common number. Okay, again, when this when the
- [00:13:38.430]Glennis McClure: responses are low in a particular area, your chances are you're going to see that there's no most common figure. This is quite an interesting one, so that every district.
- [00:13:47.490]Glennis McClure: The most common figure reported was $20 whereas when we figured the average which there was a range, but we figured the average at $19 and 78 cents pretty close to the 20 as you can see. So that's sort of how that that's how that works.
- [00:14:07.590]Glennis McClure: So we're just going to talk a little bit about some of the general information that goes into the surveys or what we've asked and some of the responses that we've gotten back again. We
- [00:14:18.120]Glennis McClure: Ask survey participants to include the cost of their machine, the power unit, if you will, and labor, but not the material or input expenses. So we do ask them what
- [00:14:29.340]Glennis McClure: Would they figure their fuel rate to be for this year and in 2020 they figured it at $2 and 12 cents. And we asked about that labor rate. What kind of value, would you put on the labor you figured $19 and 35 cents an hour.
- [00:14:45.000]Glennis McClure: And then we've got here, how many acres. So those acres. I'll show you a graph and just a little bit where that's ticked up over the years. So we have
- [00:14:53.940]Glennis McClure: A folks reporting in the customer survey that are covering and actually doing quite a bit of work we have some that are really quite large and some that of course do just a small amount of acres or cover small
- [00:15:05.160]Glennis McClure: Amount of work with this, but our average for 2020 was 5322 acres, and we had just not everybody replies to that either. But we had 119 responses on the hour spent so
- [00:15:19.860]Glennis McClure: Looking at how much time do they spend doing custom work on average. Again, we see 571 hours.
- [00:15:27.300]Glennis McClure: Most of the popular custom higher operations show some increase in rates in the 20 in 2020 over 2013 as I compared rates reported for 2018 to 2020
- [00:15:40.230]Glennis McClure: I found that in general like tillage operation reads per acre were up seven to 13% planting and drilling rates increased approximately seven to 10% per acre.
- [00:15:52.380]Glennis McClure: And harvesting rates, mostly increase 3%. Not a lot, but in one case on a per bushel rate basis. There was a jump of 25%
- [00:16:02.670]Glennis McClure: And rates for bailing round bales because that's most where we get most responses on Bailey is the large round bales that rate just jumped up only slightly from the figures, we'll take a look at some of those here in a little bit.
- [00:16:18.540]Glennis McClure: Alright, so this is that graph on the acres covered. So you can see that going back to 2012 we had just 2100 acres covered and we're all the way up to 5322. So obviously, this could be a different mix of cooperators um
- [00:16:36.450]Glennis McClure: You know involved in our customer survey. Some of them have made pretty good businesses of doing custom work and it's a good supplement. In some cases, to
- [00:16:46.380]Glennis McClure: What you know farm income that we're generating so you can see that we have really jumped up from 2016 to 2018 and 2020 we really those figures really jumped fairly significantly
- [00:17:02.220]Glennis McClure: And as I mentioned the hours jumped up to I didn't do that graph, but they did jump up. So then, here's the labor rate, as I mentioned,
- [00:17:09.660]Glennis McClure: In 2020 we had $19 and 35 cents. It was up just slightly from $18 and 85 cents. That was noted in 2018 so you can see how that's changed over time.
- [00:17:20.610]Glennis McClure: And then also the diesel rates. Now this is fluctuated I'm in particular was interesting looking back at 2014 we had $3 and 39 cents is the diesel price per gallon is, you know, we've had
- [00:17:33.060]Glennis McClure: Ups and downs with that it really dropped back in 2016 back up again in 2018 then we had a dip in 2020 and again those folks that responded to that question. That's the average that we calculated from those answers.
- [00:17:53.730]Glennis McClure: So I wanted to mention to you. You know how it might change things if you are figuring a larger a day labor rate in this case is a fuel example.
- [00:18:04.260]Glennis McClure: But in 2020 we we showed the average of $22 and 12 cents per gallon. And let's say you know the prices jumped up because usually these things are done like the first two years. So let's even by mid year or by 2021 is you're figuring rates because we do this.
- [00:18:20.760]Glennis McClure: Survey every two years that let's say the prices have gone back up 50 cents a gallon so what what differences that make in your rates.
- [00:18:28.920]Glennis McClure: Or what what could it do so let's say the tractor uses point eight gallons of fuel per acre and you take that times that 50 cent increase
- [00:18:38.910]Glennis McClure: You would have a 40 cent increase per acre needed to add to the rate to cover that fuel costs. This is an example. So if you see some of those rates increasing what difference can that make as you're setting rates or some of the rates that you may be paying to be affected.
- [00:18:58.020]Glennis McClure: And I just thought about this. Sorry, Ryan. We did have a couple poll questions. And I'm going to go ahead, Ryan, if you would. Let's stop right here unless I'm going to ask you since we've got to this point, I'm a couple questions. If
- [00:19:14.910]Glennis McClure: You can add those in. Okay. Here they are. The first one is if you would answer this. Did you participate in the
- [00:19:21.990]Glennis McClure: customer survey as a custom service provider. So if you provide services. Did you participate in our survey we just like to kind of have an idea of who's on today. And if you are some of the data may be partly yours.
- [00:19:39.240]Glennis McClure: If I hadn't answer that we'll see how we do here.
- [00:19:54.000]Glennis McClure: Right. I mean, you have some results. If you can share the results.
- [00:20:02.010]Ryan Evans: Alright goodness so 100% of people are reporting that they did not
- [00:20:06.000]Ryan Evans: Participate as a survey.
- [00:20:09.840]Glennis McClure: Purchase. Okay.
- [00:20:11.640]Glennis McClure: So that means we have folks on that are interested in what the charges are supposedly they don't. All right. They may participate as a customer. Okay, so the next poll question that may make a difference on this than two.
- [00:20:24.990]Glennis McClure: Okay.
- [00:20:25.350]Ryan Evans: You're going to go ahead and put that up.
- [00:20:29.040]Glennis McClure: Alright, so there's different parts of this you can answer. You can check all that apply in this case.
- [00:20:35.580]Glennis McClure: Have you used the customers report in the past or currently to compare the rates you charge. So if you're not charging rates. That's probably not going to apply to you.
- [00:20:44.700]Glennis McClure: Or if you're using to determine a custom rates if if the customer with you, you were quoted is comparable or reasonable. So if you look at the customer a report and you say now yeah this is
- [00:20:55.890]Glennis McClure: This is what I'm being asked to pay, and is it reasonable that could be, um,
- [00:21:01.140]Glennis McClure: It's a market rate survey. So that could be one of your answers or let's say you use the report to plan and project expenses or assistant making financial decisions. For example, you might
- [00:21:13.980]Glennis McClure: Try to compare what if I hire this done versus buying my own equipment, you know, what is it cheaper to maybe have it done by someone else by time. You pay labor fuel for that machine and so on. So,
- [00:21:26.070]Glennis McClure: Check those that apply or maybe none of these advice to go ahead and check on your answer there.
- [00:21:44.400]Glennis McClure: Hey Ryan, whenever we have results.
- [00:21:46.860]Ryan Evans: True. So on the first question of
- [00:21:48.930]Ryan Evans: If it is used to compare the rates charged to the rate shown in the latest customs rate report zero percent answered that question to. Yes. And that question.
- [00:22:00.210]Ryan Evans: On the second question of determining if a custom rate you were quoted is comparable or reasonable 55% answered yes, and on the third question of using the report to plan and project expenses were assistant making financial decisions 36% answered yes well 27% said none of the above.
- [00:22:22.620]Glennis McClure: Okay, okay. So some cases you
- [00:22:24.390]Ryan Evans: Haven't used it.
- [00:22:25.440]Glennis McClure: But it sounds like we have quite a
- [00:22:26.730]Glennis McClure: Few that would be customers that use the custom right so. All right. Thanks, Ryan.
- [00:22:33.750]Glennis McClure: Okay, so we'll go ahead and continue on here on this graph I just pulled some of the most popular. So if when you look at the report.
- [00:22:42.300]Glennis McClure: You look at, we do have a state summary and the state summary really is those operations where we have most reports on. Okay, so obviously there's quite a few that
- [00:22:55.200]Glennis McClure: Talk about Tilly to work that they do. So that's a popular. Those are more popular operations as well as planting.
- [00:23:02.010]Glennis McClure: And harvesting and so on. So I just grabbed a few of those to take a look back kind of how things have changed from 2010 so we have 10 years of data every other year.
- [00:23:13.530]Glennis McClure: And so you can see where we are with with those charges. Um, it's interesting that for the most part.
- [00:23:21.570]Glennis McClure: Every year, there's been some uptick in prices. Okay, so, you know, we already looked at kind of what fuel did what labor's labor has been going up.
- [00:23:29.730]Glennis McClure: So it kind of makes sense, it is kind of interesting because remember 2014 we had a little bit higher diesel price. So I think going into
- [00:23:38.520]Glennis McClure: 2015 2016 some of those rates might have increased so you can see how 2016 actually that rate for this caroling was a little higher than 2018
- [00:23:49.290]Glennis McClure: And then of course there was a jump up again in 2020 so we do see in 2016 there were a few higher rates than what we saw in 2018 so
- [00:24:00.960]Glennis McClure: Overall, you can kind of look at how rates of change like here's 120 14. This was higher than the 2016 figures. So we see that once in a while where
- [00:24:12.300]Glennis McClure: You know, prices don't always jump up in a general trend, they do. And then you can look at the planting figures, obviously, a lot of people look at the planting that they utilize
- [00:24:23.190]Glennis McClure: You know, custom services a lot with that. And you can see how those figures have changed a little bit over time.
- [00:24:32.400]Glennis McClure: Um, I threw in here a chart to show you again. We asked different kind of different procedures or operations when it comes to plan team.
- [00:24:41.610]Glennis McClure: And this is just an example that plenty row crops. We asked about a know tail with band applicator rate per acre. And we asked about a row cleaning device with the end applicator and there's, there's, there's others without applicators
- [00:24:55.710]Glennis McClure: And so, but these are just a couple of examples where we show what the rates have done from the
- [00:25:02.010]Glennis McClure: timeframe.
- [00:25:03.960]Glennis McClure: With those two operations.
- [00:25:07.110]Glennis McClure: So general trend upwards.
- [00:25:12.870]Glennis McClure: And then here is
- [00:25:17.010]Glennis McClure: beilein and harvesting beilein is very popular, especially against, as I mentioned, we get most of the responses we we struggle a little bit with some of the responses.
- [00:25:25.740]Glennis McClure: On the small bales. But generally, the large round bales. We get a lot of responses on that without net rap and with net rap and you can see kind of how the
- [00:25:36.060]Glennis McClure: Averages have gone with that. Again, these are the state averages, we're not showing here, the district numbers. So you'd want to look at your district, but
- [00:25:43.260]Glennis McClure: This is just a general some general information using some state figures and kind of what's done there. So I did know that is with the bailing. There was just a slight increase from 2018 to 2020 and then it was harvesting
- [00:25:59.220]Glennis McClure: Again, that's pretty popular obviously a lot of people utilize custom services when they're
- [00:26:06.480]Glennis McClure: Having some harvest done. And so again, generally those rates tend to increase again equipment costs, there's a lot of factors to consider in figuring some of those rates.
- [00:26:19.380]Glennis McClure: Generally, again, we get most responses on the flat charge per acre. We do ask about a flat charge per bushel. So we did have some we didn't have any of those. As noted
- [00:26:29.610]Glennis McClure: The first few years but those numbers are shown here. And this, I think this is where I saw a pretty significant from point 272 point three five and even point 242 point three to pretty large percentage job when you figure it on a per bushel basis. Okay.
- [00:26:50.550]Glennis McClure: So then here is a bar chart to
- [00:26:55.050]Glennis McClure: Compare, I guess, if you will, combining drylands to be driving corn and then combining soybeans rate per acre.
- [00:27:03.150]Glennis McClure: Now we don't ask particularly about the irrigated versus dry land on soybeans. I think over time we've seen that there really isn't a significant difference you see more of a difference with
- [00:27:13.140]Glennis McClure: Dry land corn and irrigated corn and I'll show that slide. Next, but, um, you can see you again kind of how these compare dryland corn to to soybeans.
- [00:27:24.870]Glennis McClure: And how that's gone from 2012 on up through 2020 and really, if you look at those numbers side by side.
- [00:27:33.900]Glennis McClure: They're really not. They're really, really close to 2020 we're just a few cents off a little bit more of a spread there in 2014 and then and so on. So there's not a lot of difference between combining dryland corn and soybeans.
- [00:27:50.640]Glennis McClure: So next, here's the one with the combining irrigated corn. So generally, again, you'll see the combining your good corn figures can be a little higher than the soybean rates.
- [00:28:02.070]Glennis McClure: And you can see there's a difference there. And a little bit more of a significant spread. I guess than what we saw on the dry land side of things. So it is kind of interesting when we have this data going back a ways how things look and how things change.
- [00:28:19.920]Glennis McClure: All right, so I would like to kind of provide an example of how let's say you are an operator and you're trying to figure out what you would charge
- [00:28:32.460]Glennis McClure: Some things that you might look at. And so let's say you own a combine in headers and you harvest about 1600 acres of your own corn, soybeans,
- [00:28:42.360]Glennis McClure: And a neighbor calls asking if you would cut his 400 acres of corn and he's got that happier gated have dry land for this fall. And you don't have to worry about any to Holly and expenses. He can take care of that with the equipment that he has. So you need to figure out what to charge
- [00:29:00.930]Glennis McClure: So this particular operator happens to be sure that my notes here I'm happens to be in Adams County.
- [00:29:12.120]Glennis McClure: So,
- [00:29:15.420]Glennis McClure: This kind of highlight. We're right here in Adams County. All right.
- [00:29:20.280]Glennis McClure: And
- [00:29:26.130]Glennis McClure: What's in the south district. As you can see,
- [00:29:28.920]Glennis McClure: And then, you know, right up against though southeast east and central okay so it might make a difference. Not to just look at the south numbers, but to look at these other numbers, kind of in this area.
- [00:29:40.530]Glennis McClure: And again, we don't really say how many we have from these particular counties, but we do show the different districts as we as we present the data.
- [00:29:51.150]Glennis McClure: I need to stop the pointer.
- [00:29:57.480]Glennis McClure: Alright so here is the part of the report that you might take a look at
- [00:30:03.870]Glennis McClure: So that's interesting. I'm going to look at the irrigated coordinates and the dry land corn rates, but in the South. We didn't have. We didn't have enough to report right
- [00:30:13.470]Glennis McClure: It's kind of interesting that that area, we probably need a few more co operators, providing information that area. So as I said, so if we don't have that information.
- [00:30:23.130]Glennis McClure: We could look to the east. The central in the southeast southeast being right up against these all these different districts up against that area.
- [00:30:31.110]Glennis McClure: So I can look at the state information. There were 86 total that reported
- [00:30:35.940]Glennis McClure: Irrigated corn and then driving cornea 105 reports and looks like se. There were quite a few. So that might be a good number to look at Central and East again. There were quite a few
- [00:30:47.880]Glennis McClure: All right, so, so you can see the most common for irrigated on this case 35 and Steve average was 35 as far as most common
- [00:30:57.810]Glennis McClure: Se was up there a little ways with 50 can see the north, they charge a little bit more there. We don't, we're not concerned about those rates in this case.
- [00:31:05.760]Glennis McClure: Um, and then looking down at the drive in porn figures. Oh, wow. So 35 is the most common for the state figure but look at the averages 39 and then the dry land falls back to 36. Okay, so we're probably looking at that 35 range right now. Here's a 40 interesting
- [00:31:26.940]Glennis McClure: So, you know, it kind of varies, but we're probably looking at about that $35 range on up to that 39 or so when we're talking about the irrigated side of things. So that gives you an idea.
- [00:31:37.830]Glennis McClure: Of what is sort of the market rate when it comes to harvesting those acres that would be something to look at.
- [00:31:47.790]Glennis McClure: All right, so now, but as an operator, not only would I want to look at what I was going to charge looking at their reports. But I'd also want to consider what I have for equipment and what my costs are. So these are just some facts of what this guy owns for equipment and his car mine.
- [00:32:06.810]Glennis McClure: was purchased a couple years it's purchase two years ago and it was used to purchase it for a couple hundred thousand as list price, as you know,
- [00:32:16.110]Glennis McClure: 350,007 years old has 1550 tak hours. I'm going to keep it about eight years. If I was the operator 200 hours are put on the machine. Each year, roughly
- [00:32:28.560]Glennis McClure: I figure repairs, about eight to $10,000 a year at least and fuel loving gallons of diesel per hour. Plus, I have to add that corn head in.
- [00:32:38.670]Glennis McClure: So I bought that a couple years ago for $40,000 list price 65 six years old plan to keep it five to seven years. And we do have some manual maintenance of about 1500. So what does all this have to do with
- [00:32:52.080]Glennis McClure: Okay, these are really the numbers that a person will have to put in, or to take into consideration to figure depreciation repairs.
- [00:33:02.970]Glennis McClure: An opportunity cost of owning that a type of machinery. So I've got a couple slides here just to mention going to consider the operating costs the fuel.
- [00:33:15.480]Glennis McClure: The labor those repairs and there may be some supplies. In some cases, some cases not
- [00:33:23.670]Glennis McClure: Okay then ownership costs again depreciation figuring that understanding get to get to that salvage value and figure out the years of use come up with that figure
- [00:33:36.960]Glennis McClure: What interest rate. Again, what does the opportunity cost of owning that machinery. If I didn't have it invested in Michigan me where I could have invested somewhere else. So what's that opportunity cost.
- [00:33:48.540]Glennis McClure: What are the I have to pay property tax.
- [00:33:51.900]Glennis McClure: On personal property tax on that piece of equipment. I got a house that I want to make sure it stays good. I've got to have a place for it. And I also have to pay for insurance. So those are the kinds of costs that should be considered for an operator as they're figuring their rates.
- [00:34:08.520]Glennis McClure: So what I show here is we're working on a new program for our crop budgeting and we're it's going to be really nice. We can plug in that information that I showed you
- [00:34:19.200]Glennis McClure: About that machine and the labor rate fuel rates kind of what my repairs are, you know, and if I ran this machine over number of acres
- [00:34:29.760]Glennis McClure: And it really shows here breaks those costs down as I just mentioned, this is taxes, taxes, insurance housing.
- [00:34:37.140]Glennis McClure: You know I'm showing that for that machine and figuring about a $33 and 88 cents total cost per acre. So if I'm happy with what I'm getting paid.
- [00:34:47.280]Glennis McClure: You know that, you know, we were kind of in that $35 ballpark. Aren't we so we said 35 to 40
- [00:34:53.550]Glennis McClure: So it might be that I kind of stick with those rates. So I'm making sure that I'm covering my costs or let's say he is a neighbor. He only
- [00:35:01.080]Glennis McClure: You know this fields, only a mile away from mine. Maybe I don't need to, you know, consider charging for all of that.
- [00:35:08.940]Glennis McClure: You know, it depends on the circumstance depends on the field. I know my husband does a lot of crops brain and there's certain fields that
- [00:35:17.010]Glennis McClure: You know he doesn't mind doing and there's certain ones that he grumbles a lot about getting into do so. So, kind of, there's a lot of factors that go into this thing.
- [00:35:26.130]Glennis McClure: That I show here an example, if you had unless he had an another machine that was worth $100,000 more he dinner machine and I plugged in those numbers.
- [00:35:38.160]Glennis McClure: And left the corn head, the way it was. Here's where if I had a little bit higher price machine.
- [00:35:43.380]Glennis McClure: And, you know, you're gonna have to replace those every so often those prices don't ever seem to come down, you'd be looking at about a 41 $42 per acre cost for that machine.
- [00:35:54.540]Glennis McClure: So I've got another worksheet where I plug those figures in
- [00:35:58.860]Glennis McClure: There's a number of different ways you can look at that. But it was interesting as I ran these figures how really close. They came out to
- [00:36:05.700]Glennis McClure: Let our, our survey showed, and that's not always going to be the case because I tell people when they're asking me, what should I charge
- [00:36:12.360]Glennis McClure: Look at the report. Look at your area, but also consider what your costs are. And let's let's kind of work out with those are so that you can figure properly.
- [00:36:22.740]Glennis McClure: Okay, with that I have completed my slides, and I would ask that you have questions, let us know. And Jim will let me know what those questions are, and we'll try to answer them together.
- [00:36:44.340]Jim Jansen: So Glenys you spend some time today talking about operations related to harvest team combining things of that nature.
- [00:36:54.750]Jim Jansen: You want to talk a little bit. You don't have to give any specific grades, but you want to talk about some rates that if I'm a rancher, for example, you know, do you have anything in there, related to
- [00:37:04.980]Jim Jansen: Say fencing or
- [00:37:07.050]Jim Jansen: Control of noxious tree or weeds or even cutting of brush or trees do you have
- [00:37:13.440]Jim Jansen: Any rates on that.
- [00:37:14.970]Glennis McClure: You
- [00:37:15.450]Can research.
- [00:37:17.550]Glennis McClure: Yeah. Hey, thanks for thanks for mentioning that gym for sure. In part two of the customer survey on 26 we have Fenty we really had hoped to get more responses on that fencing figure this year.
- [00:37:31.800]Glennis McClure: And again, we didn't have very many reports on that we may try to, you know, do a supplemental survey, that's not, you know, cut and dried yet but
- [00:37:41.970]Glennis McClure: We had quite a few requests on that fencing question, especially with the flood and how many fences had to be built up last year. So it's a little disappointed in the responses with that. But we do have
- [00:37:53.790]Glennis McClure: We do have some figures in here on fencing and use. You mentioned. Oh, there is a cedar tree clearing. We had 16 in the state.
- [00:38:04.620]Glennis McClure: Of share information on that. There was quite a range with the cedar tree figure most common was $100 per hour.
- [00:38:16.410]Glennis McClure: And we have mowing grass CRP, sometimes we asked about, can you give us a rate per acre or rate per hour. So you'll see we've asked some of those things in different ways. And again, we don't include in the report responses. If we have three or less responses over the whole state so
- [00:38:35.520]Jim Jansen: Right, right. And then looking at the on the topic of fencing if there were two categories reported related to building a new fencing. One is simply for the labor.
- [00:38:45.300]Jim Jansen: Charge. So if someone's using your equipment and they go out and
- [00:38:48.240]Jim Jansen: Build say a poor stranded barbed wire fence with would post data range on the labor range anywhere from 15 to 40 with an average of 25 an hour.
- [00:39:00.000]Jim Jansen: And when it came to building new fence the measurement that was reported was a rate per foot. And once again, this is for for stranded barbed wire fence with would post and there was a range that actually reflected from with an average of $1 82
- [00:39:17.760]Jim Jansen: But the range from $1 to 245
- [00:39:21.840]Jim Jansen: Once again, when it comes to building supplies, especially right now. I know there's been reports coming in that things like treated wood are improved reports are 70 80% higher because a lot of people are wanting to build
- [00:39:36.960]Jim Jansen: Decks right now for homes, which I know you're not probably going to be building a deck on a farm. But if you needed some treated wood to build braces or whatever. Some of these rates can vary quite a bit. So
- [00:39:50.220]Jim Jansen: The other question I wanted to ask you, Glenys on
- [00:39:53.160]Jim Jansen: Things once again a little bit more in the livestock topic. What, what do we have inside the report for things related to like cutting a hay baling to round bales square bales, you want to talk a little bit about that and maybe I can provide some detail on the actual rates.
- [00:40:11.400]Glennis McClure: Right, well we do and I'll pull up what our questions are on that. And you can kind of look at the responses that we got. And I always have to look at this, we have a lot of data points in here. I just have to look around and you don't have it all in my hand. Exactly.
- [00:40:25.440]Glennis McClure: All these are
- [00:40:26.640]That
- [00:40:29.400]Glennis McClure: You have something
- [00:40:31.170]Jim Jansen: One.
- [00:40:31.650]Glennis McClure: Part one
- [00:40:32.670]Jim Jansen: Yeah, so a couple of helpful tips to tips for people if you go out and actually download our report 29 pages long.
- [00:40:41.460]Jim Jansen: So there's a lot of information in there. But if there's a
- [00:40:43.680]Jim Jansen: Particular operation you have in mind. And in fact, when I asked clearness by Haley hain and Bailey. And I just simply did a control F, which brings up the search pain in the PDF
- [00:40:55.710]Jim Jansen: Tool, and I just typed in the word bailing, and that can take you throughout the entire document to find additional detail, but there are rates reported for different types of cutting. Hey, things like Moline swatting as well as raking
- [00:41:12.540]Jim Jansen: Once again, when you talk about negotiating a rate. Are you talking it on an hour early and on a per acre or per bail rate because these rates can vary quite a bit, but related to the rates that were reported
- [00:41:28.770]Jim Jansen: Moline or swatting hey we had ranges about $15 an acre is pretty common with range from anywhere from say tend to the upper mid to low 30s raking is a little bit less expensive. We have rates more in that seven till about $9 an acre. And then on the topic of bailing.
- [00:41:50.370]Jim Jansen: Small square bales, which some folks are working on straw right now across state. If you have leaders small grain of some kind. We're seeing a lot of numbers come in, whether, whether for wire to buy or twine tie wire tie is a little bit more because the
- [00:42:05.580]Jim Jansen: Wire does cost money, but will be a little higher attention on that. The only a small squares respond dollar 50 a bail.
- [00:42:12.750]Jim Jansen: Butter dollar bail or 94 cents for
- [00:42:15.180]Jim Jansen: twine tight and that is just for doing that operation. Now you're going to hire someone to help
- [00:42:22.020]Jim Jansen: Stack a trailer for bales or move around, or do whatever I'd expect to see more, and that's one reason we did see a little bit of a higher range on some of those raid numbers that were reported
- [00:42:33.480]Jim Jansen: And then on round bales, which obviously we're well into the second and if not, third cutting and most areas of the state for round bales, we had
- [00:42:43.680]Jim Jansen: Rates at different, a little based on if they were net wrapped or twine tied, but on the net rap bales for hey not corn sex, but for hate reach we're coming in around 13 and a half to 14 and a half dollars.
- [00:42:57.900]Jim Jansen: Bail and the corn stock bales which that's just going to be right around the corner to right bonus. Those are coming in slightly higher at about 1637. So once again, there's a lot of information in there.
- [00:43:10.410]Jim Jansen: Outside of our traditional planting and harvesting row crops or small greens that folks can get an insight in
- [00:43:19.020]Jim Jansen: Glen, so maybe another question here that came in, if I'm trying to negotiate with my neighbor.
- [00:43:27.270]Jim Jansen: And let's say I'm having an issue with my combine or I'm in poor health is here, for whatever reason, and I'm looking at the customer rates and you gave some numbers on harvesting and brown $30 an acre in
- [00:43:40.950]Jim Jansen: And my neighbor wants to charge me let's say 38 an acre. Is that a fair rate.
- [00:43:49.980]Glennis McClure: Get it.
- [00:43:56.130]Glennis McClure: Done.
- [00:44:08.130]Glennis McClure: Mei Mei.
- [00:44:16.260]Glennis McClure: Mei Mei.
- [00:44:17.790]Glennis McClure: Mei.
- [00:44:55.170]Jim Jansen: Very good.
- [00:44:59.820]Jim Jansen: That came to my mind that some folks might be thinking about relates to, especially if you have some crap residue. You might feel like a horse manure on this late summer is a topic appalling the newer
- [00:45:12.240]Jim Jansen: You want to talk a little bit about that. My Glen. So what kind of information we're having coming in. It's it Hollinger liquid or a solid or anything like that.
- [00:45:39.720]Glennis McClure: In
- [00:45:48.840]Glennis McClure: The
- [00:45:50.190]Glennis McClure: City.
- [00:46:17.730]Jim Jansen: You know,
- [00:46:20.760]Jim Jansen: Okay, with that I'm not seen any other questions come in.
- [00:46:25.620]Jim Jansen: And does anyone have any other questions or comments, we're getting towards the tail end of our hour here. I think we got a lot of good
- [00:46:36.240]Jim Jansen: Lot of good feedback.
- [00:46:37.920]Jim Jansen: I would say once again, there's a lot of information inside the report and if you put me on spot at the one moment, I may not be able to answer it for you, but
- [00:46:45.840]Jim Jansen: You can find a lot of information by doing a consent simple control off to bring up the flying pain.
- [00:46:51.930]Jim Jansen: And when you do find you can find a lot of information and I'm just actually scrolling through it right now is we're kind of going through things. And there's a lot of good information in there. There's even information related to
- [00:47:03.840]Jim Jansen: Say renting of a skid steer renting of a tractor renting of retractor by an hour, excuse me, horsepower rate on an hour early metered basis. So there's some good information on there. If you have to run a tractor. If you're trying to negotiate the
- [00:47:19.470]Jim Jansen: Custom use of a tractor for whatever reason.
- [00:47:22.530]Jim Jansen: And, you know, like, that being said, for those of you that are joining us today. If you take a
- [00:47:27.330]Jim Jansen: Look at it, and you see there's a category that
- [00:47:30.030]Jim Jansen: He's a really like to see in the future. Or maybe you might look at it and say, yeah, there's not a lot of responses there because we're know maybe not answering or asking the question quite the right way. We're always looking for just suggestions on wording. The asking
- [00:47:43.920]Jim Jansen: The spinning questions is always a very tricky thing to get coherent responses that are appropriate for the scope of what we're trying to do.
- [00:47:52.470]Jim Jansen: So with that Glynis. Do you have any closing comments or anything else you'd like to add, I think we're towards that roughly the end of our time now.
- [00:48:17.010]Glennis McClure: Money.
- [00:48:48.060]Jim Jansen: Alright, thanks for thanks everyone for joining us and letting me host today. Take care of everyone.
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