The equipment needed to operate a modern farming operation is expensive and often quite specialized.  Therefore, many farming operations use custom operators and/or machinery rental to perform machinery operations as an alternative method.  For others, custom farming may be a method to spread fixed costs of machinery over more acres, reducing per unit costs and increasing cash flow.

Whether a business is a user or provider of machinery services, determining a rate to charge for machinery services can be difficult due to the various costs of farm machinery.  One alternative method to determine a fair and equitable price for the custom work is the use of “Farm Custom Rates.”  The Ohio Farm Custom Rates 2010 is based on a statewide survey of 242 farmers, custom operators, farm managers and landowners.  These rates, except where noted, include the implement and tractor if required, all variable machinery costs such as fuel, oil, lube, and the labor for the operation.  The complete set of the Ohio Farm Custom Rates 2010 is online at:

http://aede.osu.edu/Programs/FarmManagement/OFCR2010.pdf

 Actual custom rates may vary according to availability of machinery in a given area, timeliness, operator skill, field size and shape, crop conditions, and the performance characteristics of the machine being used.  Some custom operations are provided at bargain rates due to family or neighbor relationships between the parties involved.  Additional charges may be added if the custom provider considers a job abnormal such as distance from the operator’s base location, difficulty of terrain, or amount of product or labor involved with the operation.

Fuel prices have an impact on custom rates and rates may fluctuate based on large movements in fuel prices.  The approximate price of diesel fuel at the time of this survey was $2.50 per gallon for off-road/farm usage.

There is no assurance that the average rates reported will cover your total costs for performing the custom service or that you will be able to hire a custom operator for the average rate listed in the publication.  Calculate your own costs carefully before determining the rate to charge or pay. 

A number of publications are available that may help in calculating your total costs of performing a given custom operation.