Custom Rates Report 2024 Holt Boyd Extension Podcast

Custom Rates Report 2024 - June 27, 2024 - Amy Timmerman, Extension Educator

Note: Click on the button for Full Screen; then click on the en CC button for Closed Captioning; then click on play and so that you are able to read the captioning.

(Plays best in Chrome)

• [0:00] This is Amy Timmerman with Nebraska Extension and this week’s Extension Update.
• [0:05] The 2024 Nebraska Custom Rates Report, which offers insights for agricultural
• [0:10] producers and service providers, is now available through Nebraska Extension
• [0:14] and the University of Nebraska-Lincoln’s Center for Agricultural Profitability.
• [0:19] The report, published at cap.unl.edu/customrates,
• [0:25] compiles survey data from 159 respondents, providing
• [0:29] current market rates for 138 different custom
• [0:33] operations and services across Nebraska.
• [0:37] This comprehensive resource serves as an essential guide
• [0:40] for those offering and seeking custom agricultural services.
• [0:44] While the report offers a detailed overview of market trends,
• [0:48] custom service providers are encouraged to consider their own
• [0:52] operational costs when determining their rates.
• [0:55] Agricultural custom rate charges can vary across the state.
• [0:59] Therefore, the Nebraska Custom Rates Report provides rate details
• [1:03] from survey responses grouped by Nebraska Agricultural Statistics Districts.
• [1:08] Several factors contribute to rate differences reported
• [1:11] by survey participants, including field and job sizes, soil conditions
• [1:15] and the number of responses for the various operations.
• [1:19] Some operators may charge lower than market rate prices to neighbors or relatives.
• [1:24] Rates can change from year to year due to expense differences and local market forces.
• [1:29] Determining appropriate charges for custom machine hire and
• [1:32] agricultural services includes consideration of various elements
• [1:36] such as current market rates reported in the custom rates survey report, market
• [1:41] demand in the area for specific types of custom work, and availability of services.
• [1:47] Aside from the custom rates reported by Nebraska operators in the survey,
• [1:51] establishing custom rate fees should involve calculation of machine ownership
• [1:56] and operation costs, with a profit margin added if desired.
• [2:00] The UNL Center for Agricultural Profitability developed the
• [2:04] Agricultural Budget Calculator (ABC) program to assist producers in
• [2:08] determining cost of production for their enterprises, which
• [2:11] includes machinery and equipment costs used in agricultural operations.
• [2:16] Producers and custom operators can utilize the online program,
• [2:19] agbudget.unl.edu to enter their machinery and equipment
• [2:24] information such as purchase value, length of anticipated ownership,
• [2:28] and other key machinery information such as coverage rate, along with
• [2:33] fuel prices, labor costs, and estimated annual repair expense
• [2:37] for each machine to determine operation costs per acre.
• [2:41] Fuel, repair, and salvage value cost factors and calculations
• [2:45] from the American Society of Agricultural and Biological
• [2:48] Engineers are utilized in the ABC program.
• [2:52] Determining a rate to charge for agricultural
• [2:54] custom services should be no different than
• [2:57] establishing prices for other industry business services.
• [3:00] First, observing current market rates or prices,
• [3:04] as provided in the Nebraska Custom Rates report or
• [3:07] other resources that provide such information, then figuring
• [3:10] total operating and ownership costs, and if desired, adding
• [3:14] an extra amount or profit margin to the price charged.
• [3:18] Full summaries from the custom rates survey,
• [3:20] including regional rates for the eight Nebraska
• [3:22] Statistics Districts and the overall state, are
• [3:25] published as University of Nebraska-Lincoln Extension
• [3:28] Circular or EC823 and available at: cap.unl.edu/customrates.
• [3:36] The information presented in the state summary and
• [3:39] full report should be used only as a guide when
• [3:43] determining what to charge or pay for custom operations.
• [3:47] Or you're welcome to drop by your local
• [3:49] extension office to receive a copy of this publication.
• [3:51] This has been Amy Timmerman with Nebraska Extension.