Cost per acre vs custom rate is the comparison that decides whether to own equipment or hire a contractor. Work out your own cost per acre with the calculator, find a local custom rate for the same job, and compare the two figures side by side. If the hire rate is below your own cost, hiring may make sense.
How Cost Per Acre vs Custom Rate Works as a Decision
The decision has two sides. On one side is your own cost per acre, the cost of doing one pass across one acre with your own machine and operator. On the other side is the custom rate, the price a contractor charges for the same pass. Put the two figures next to each other for the same job, and the cheaper figure usually wins, unless timeliness changes the answer.
The calculator page states the rule. Compare your own cost per acre with local custom rates. If a contractor rate is below your own cost, hiring may make sense, as long as timeliness does not suffer. Your own cost is the machine cost for one pass. A custom rate is a hire price per acre.
Work Your Own Cost Per Acre First
Work your own cost per acre before you look at any hire rate. If you look at the hire rate first, you will be tempted to adjust your own hourly cost until the answer matches the hire rate. Work your own figure honestly, write it down, and only then find the local rate.
The calculator needs two formulas. Acres per hour equals width in feet times speed in miles per hour times efficiency divided by 8.25. The figure 8.25 equals 43560 divided by 5280. Cost per acre equals hourly cost divided by acres per hour. Job cost equals hours times hourly cost plus travel. Use the Cost Per Acre Calculator for this side of the comparison.
Use the verified worked example from the calculator page. A 24 ft field cultivator at 6 mph and 85 percent covers 14.84 acres per hour. The sum is 24 times 6 times 0.85, which equals 122.4, and 122.4 divided by 8.25 equals 14.84. At an example $150 per hour, the cost is 150 divided by 14.84, which equals $10.11 per acre. A 160 acre field costs about $1,618. The $150 rate is an example rate only, not a market rate.
Now run the same method with your own inputs. Pick your machine type, and the calculator fills typical width, speed and efficiency values. Enter your field size, default 160 acres, and your machine plus operator cost per hour, covering tractor, implement, fuel, repairs, labour and overheads.
Your hourly cost must include five components. Fuel and lubricants come first. Repairs and maintenance for tractor and implement come next. Ownership costs follow, namely depreciation, interest, insurance and housing. Labour follows, namely the operator wage and benefits. Overheads close the list, namely a share of trucks, tools and admin. No dollar figure for any component is given on the page, so enter your own figure for each one.
Efficiency moves the result just as much as hourly cost. The dropdown offers 90 percent for big square fields with GPS, 85 percent for open regular fields, 80 percent for normal work, 75 percent for typical conditions, 70 percent for smaller fields, 65 percent for obstacles, and 55 percent for small cluttered areas. The page FAQ says to use 75 to 85 percent for most field work.
Find a Local Custom Rate for the Same Job
Once your own cost per acre is written down, find a local custom rate for the same job. Ask contractors in your area, and check custom rate surveys published by extension services in your state. Use the most recent survey you can find, and note its date and its state.
No custom rate figure is quoted in this blog. The custom rate for your job is Unavailable in this guide, because no survey figure was opened and verified as an authoritative source for this blog. A rate you have not verified is not a fact. Enter your own local rate when you have it.
The live rate guides on this site are the right place to start. The custom farming rates guide covers the rates themselves. The contractor pricing with productivity rates guide explains how a contractor builds a price. The Iowa custom rates guide covers one state survey. This blog does not republish any rate survey.
Compare Like for Like, Not Rate for Rate
The comparison only works if both sides describe the same job. A combine only rate is not the same as a complete harvest rate that adds a grain cart and hauling. A spraying rate that excludes chemical is not the same as a rate that includes it. Seed and chemical costs are not in this calculator, so adjust a hire rate that includes them before you compare it.
Use the table below as a worksheet. The own cost figures are example figures at the page example rate, worked from the verified presets for a 160 acre field with $0 travel. The hire rate column is for your local rate, entered by you. Fill it from a quote or a survey you have opened.
| Operation | Own cost per acre, example figure | Your local custom rate per acre | Difference per acre |
|---|---|---|---|
| Field cultivator | $10.11 | Enter your local rate | Hire rate minus own cost |
| Disc harrow | $22.10 | Enter your local rate | Hire rate minus own cost |
| Grain drill | $20.00 | Enter your local rate | Hire rate minus own cost |
| Row planter | $10.00 | Enter your local rate | Hire rate minus own cost |
| Boom sprayer | $2.43 | Enter your local rate | Hire rate minus own cost |
| Combine | $12.22 | Enter your local rate | Hire rate minus own cost |
At the page example rate, the boom sprayer is $2.43 per acre at 61.82 acres per hour, from 60 ft at 10 mph and 85 percent. The row planter is $10.00 per acre at 15.00 acres per hour, from 30 ft at 5.5 mph and 75 percent. The grain drill is $20.00 per acre at 7.50 acres per hour, from 15 ft at 5.5 mph and 75 percent. The combine is $12.22 per acre at 12.27 acres per hour, from a 30 ft header at 4.5 mph and 75 percent.
These figures are machine time only. They do not include seed, chemical, fertiliser, land rent, or grain hauling. If the hire rate includes any of those items, adjust it before you compare. A small difference per acre can still matter, because it is multiplied by every acre in the job. Look at the job total as well as the per acre figure.
Add Travel and Setup Cost Before You Decide
Travel and setup cost is an optional input on this calculator, with a default of $0, and it is added to the job cost. Enter your own travel and setup figure in dollars. The page gives no travel fee amount and no minimum charge amount, and there is no minimum charge input on this calculator at all.
Travel bites hardest on small fields, because the same dollar figure is spread over fewer acres. Work the travel per acre by dividing the travel and setup figure by the acres in the job, and add it to your own cost per acre. If the contractor charges travel on top of the rate, add it to the hire side. If travel is included in the rate, do not add it twice.
If the contractor charges a minimum amount for a visit, compare job totals, not per acre rates. Take the contractor job total, including any minimum amount, and compare it with your own job total, including travel and setup. At the bush hog preset rate of 2.45 acres per hour, a 20 acre field takes about 8.2 hours, so a travel figure for that visit spreads over only 20 acres.
When Owning Wins and When Hiring Wins
Owning usually wins when the machine is used often and the acres are many. Fixed ownership costs are spread over every acre, so more acres mean a lower cost per acre. Hiring usually wins when the machine is used rarely and the acres are few.
Timeliness Is a Decision Factor, Not a Cost Input
Timeliness does not appear as an input on this calculator. It is a decision factor that sits beside the cost comparison, not inside it. A cheap rate that arrives late can be the dearest option. Ask whether the contractor can reach your field in the window you need, and what your backup plan is if the contractor is delayed. Your own machine gives you control over timing, while a contractor may finish faster with a larger machine.
A Simple Decision Method You Can Repeat
Use the same cost per acre vs custom rate method for every operation. First, work your own cost per acre. Second, add travel and setup, and work the travel per acre. Third, find a local custom rate for the same job. Fourth, adjust both sides until they describe the same job. Fifth, compare per acre figures and job totals. Sixth, weigh timeliness.
Frequently Asked Questions
Q: What does cost per acre vs custom rate mean?
A: It means comparing your own cost per acre for one pass with the price a contractor charges for the same pass. Work your own figure on the Cost Per Acre Calculator, find a local custom rate, and compare the two figures side by side.
Q: How do I work out my own cost per acre?
A: Enter your machine, width, speed, efficiency, field size and hourly cost in the calculator. Cost per acre equals hourly cost divided by acres per hour. The example is a 24 ft field cultivator at 6 mph and 85 percent, giving $10.11 per acre at the $150 example rate.
Q: Where do I find a local custom rate?
A: Ask contractors in your area and check custom rate surveys published by extension services in your state. Start with the custom farming rates guide, the contractor pricing guide and the Iowa custom rates guide on this site. No custom rate figure is quoted in this blog.
Q: What should I do about travel and setup cost?
A: Enter your own travel and setup figure in the calculator, where it is an optional input with a default of $0 and is added to the job cost. The page gives no travel fee amount and no minimum charge amount, and there is no minimum charge input on this calculator.
Q: When does hiring make sense even if the rate is higher than my own cost?
A: Hiring can make sense when timeliness is at risk, when your machine is not ready, when you have no operator available, or when a contractor can finish the job faster in a short window. Timeliness is a decision factor, not a cost input.
Q: Should I own or hire if I only use a machine a few days a year?
A: Hiring often wins for a machine used rarely, because fixed ownership costs are spread over few acres and few hours, which raises your own cost per acre. Compare your own cost with a local hire rate, and multiply the per acre difference by your acres for the year.
Plan Your Next Job From the Comparison
Cost per acre vs custom rate is a simple comparison with a serious purpose. Work your own cost per acre, find a local rate for the same job, add travel and setup, compare job totals, and weigh timeliness. Use the Cost Per Acre Calculator for your own field and your own rate, and let the figures decide whether to own or hire.
