Machinery Cost Calculator (A3-29)



Ag Decision Maker Activity File A3-29

Machinery Cost Calculator

Name_______________________________________

Use the information in File A3-29 and Decision Tool, Machinery Cost Calculator to answer the following questions and problems.

Curtis Custom questions whether he is making any money combining corn and soybeans for his neighbors, especially with the high price of diesel fuel and new equipment. He uses the Custom Rate survey, but would like to know if his costs are truly covered at the rate he is charging.

Here is his information.

Current combine: JD 9660, 2004 model, list price was $196,000, current value of similar used machines is $160,000. Annual use is about 400 hours (engine). Engine is 305 horsepower. He plans to keep all his equipment for another 3 years.

Corn head: 8-row 30-inch, 3 years old, list price is $38,000, current value is about $25,000.

Soybean head: 30-foot, 3 years old, list price is $30,000, current value is about $22,000.

This year he combined 1,500 acres of corn and 1,200 acres of soybeans.

His field capacity is about 6 acres per hour for corn and 9 acres per hour for soybeans.

He paid about $3.00 per gallon for diesel fuel this year.

He values his labor at $12 per hour.

Interest rate is 6.0%

He expects to keep the combine and head another 4 years.

1. How much is his estimated total cost per acre for combining:

Corn ___________________ Soybeans ___________________

Ag Decision Maker Activity Continued… File A3-29

Machinery Cost Calculator

2. How much would his total costs be if diesel fuel cost $5.50 instead?

Corn ___________________ Soybeans ____________________

3. How much would it lower his costs if he kept the machinery for another 6 years instead of 4? (leave price of diesel fuel at $3.00)

Corn ___________________ Soybeans ____________________

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