Farm equipment on display
Tennessee farmers have many production decisions to make, including whether to rent or own equipment.  Photo by P. McDaniels, UTIA.



With planting season quickly approaching, Tennessee farmers have many production decisions to make, including whether to own or rent equipment.

Because of the high cost of replacing machinery, farmers with aging equipment may choose not to own all of the machinery and equipment necessary to perform every farm operation. For some, labor may not be available. For others owning the equipment may be too costly for relatively small jobs. These are the main reasons University of Tennessee Extension Economist Becky Bowling says Tennessee farmers hire custom machine work to be done in their farm business.

Bowling says some farmers actually perform custom work for others. “Some just rent machinery, but others perform services,” she said. “Generally, custom work is defined as machine operations performed for a customer with the operator furnishing the machine, fuel, labor and other inputs directly associated with the machine.” She adds that costs for materials such as seeds, chemicals, fertilizers, twine and additional labor are not usually included in the cost of the service.

So, what is a fair rate? Bowling says it’s a good idea to comparison shop.

“Many times, farmers involved in custom work arrangements wonder what a fair custom rate is for a production operation,” she said. “To help them assess rates, UT Extension has released the 2013 Custom Rate Survey, which is based on a survey of producers who did custom farm work or hired custom farm work and agri-businesses.  Respondents were asked to provide rates only for the custom work which they did for others or hired others to do for them.”

The 2013 Tennessee Custom Rates Survey includes farm custom rates for typical tillage, planting and harvesting practices as well as equipment rental rates. These average rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on increases in fuel costs, availability of custom operators, timeliness, field size and other factors.

The 2013 Tennessee Custom Rates Survey is available for free online on the UT Crop Economics website:
http://economics.ag.utk.edu/crop.html

UT Extension provides a gateway to the University of Tennessee as the outreach unit of the Institute of Agriculture. With an office in every Tennessee county, UT Extension delivers educational programs and research-based information to citizens throughout the state. In cooperation with Tennessee State University, UT Extension works with farmers, families, youth and communities to improve lives by addressing problems and issues at the local, state and national levels.

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Contact:

Becky Bowling, UT Department of Agricultural and Resource Economics, 865-974-1895,
bowling10@utk.edu

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