News

Custom machine rates slightly lower

An extension educator says the cost to rent farm machinery and hire custom work is slightly lower this year.

Dennis Stein with Michigan State University tells Brownfield estimates based on 2016 survey data suggest lower fuel costs and more available used equipment have reduced the cost to hire farm machinery work.  “Not turning over their equipment quite as fast and the lower cost of fuel the last couple of years has actually trended down some of those custom rates that farmers charge each other.”

He says with the high price of specialized equipment, it might be more cost effective to swap machinery with area farmers or even hire certain work to be done by custom businesses.  “To actually get economics of production or to use the piece of equipment enough to justify its ownership, in many cases, a lot of those operators that are buying the big choppers and such are actually doing a lot of custom work.”

Stein says with the current economic conditions, it’s important farmers know their cost of production and consider downsizing equipment they have on hand or creating additional sources of revenue with it to positively impact profitability.

AUDIO: Interview with Dennis Stein