The Changes in Rates are: Percent Increase

Considerations when reviewing these rates.

1. We do not know if those responding to the survey were those who replied in 2000. While we would expect the rates to be generally the same in a given locality, we are not assured of this.
2. While most rates were reported higher, a few rates were reported near the level two years earlier.
   

Other Observations About These Rates

TO INSURE CONFIDENTIALLY -- rates are not shown for jobs when only one individual responded. Also, the range is not given when only two individuals responded. Here, only the average is reported.

Fairness of these rates is not considered. Rates are often set by:

• Charging the prevailing rate in a locality, which may have little basis for being set. But charging more than this rate will result in little demand for one's work.
  
• Work may be done in partial exchange for some other type work. Or the work may be done for a friend. Often, the rate is not indicative of costs incurred.
  
• Some work may be done by operators after they have completed operations on their farm. These rates may be set to cover fuel and repair costs, and then to provide some return to labor and partial payment for machinery overhead costs.
  

As an interview with the respondents is not possible, we cannot determine how different individuals may interpret the questions. But a large number of respondents can help overcome any misunderstanding by the reporting of other observations. Hence, the rates are reported statewide rather than by districts, or by counties.

This survey obtained only data on custom rates. But as requests are often received for information on equipment rental rates, a summary of these rental rates from a commercial vendor are included on page 12.

No reference is given for fairness of these rates, but are provided to give a starting point for determining equipment rental rates.

Most estimates of machinery costs indicate custom rates do not cover total machinery costs. Rates charged are usually sufficient to pay fuel and repairs. But often the amount left after paying these two items does not pay overhead and a competitive allowance for labor.

1. Repairs, which will be low in the early life and increase as the machine gets older. These estimates are an expected average over the machine's life.
2. Fuel -- Engineering data indicates fuel consumption for a particular job is the same on a per acre basis regardless of size machine. Larger tractors use more fuel per hour, but they pull larger implements, which cover more ground.
3. Fixed Costs -- which includes Depreciation, Interest on investment, Housing and Taxes. These usually are fixed annually. So the hourly fixed cost will depend on the hours of annual use -- and, of course, the purchase price and length of life.

The accompanying cost estimates are based on a 10-year machinery life. Annual use of the power units ranges from 500 to 1,000 hours; and tillage and harvest equipment ranges from 100 to 200 hours annual use.

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