Farming is the cultivation and management of crops or livestock to produce food and other agricultural products. It is a key development in the rise of sedentary human civilization.
Like any other business, farming takes a significant amount of upfront capital to get up and running. To make your endeavor successful, it’s essential to conduct market research and identify potential buyers.
You are likely to pay more for custom farm services in 2023.
If 2022 was an indicator of the rising cost of farming, it appears that farmers may be facing the same increased rates this year. The University of Missouri Extension published a summary of Custom Rates for Farm Services based on a statewide online survey and solicitations by Extension specialists. It looked at rates charged or paid in 2022 for custom services minus the cost of materials applied.
Here are the averages for a few jobs from the survey:
Custom combining. Corn was up 24.8%. Soybeans were up 17.3%, and small grains were up 31.5%.
Chemical application. Self-propelled crop spraying was up 11%.
Hay harvest. Cutting and conditioning was up 27%, while raking was up 39%.
While the number of responses was low, Ray Massey, MU Extension professor of agricultural economics, says when compared to custom rates guides in Iowa, “Our rates are in line with their rates and to previous custom rates surveys.” For him, this validates the direction and magnitude of changes found in the report.
“There is no assurance that the average rates reported in this guide will cover the costs for performing the service, or that you will be able to hire a custom operator in your area for the rates shown,” he adds. “Before entering into an agreement, discuss with the other party all the details of the specific job to be performed.”
The custom rates reported in the guide are often used to begin negotiations between two parties for fieldwork activities.
Massey adds that the guide should not be used to establish the price, but rather to get an idea of what charges are reasonable. The rates in the guide reflect each respondent’s judgment of a “normal” job, without additional charges.
The guide covers aspects of crop and livestock farming, as well as odd jobs around the farm. These include:
fertilizer and chemical application
harvesting and hauling row crops
harvesting and hauling hay
earth-moving and heavy equipment jobs
“Custom Rates for Farm Services in Missouri” is available as a free download.
Source: University of Missouri Extension