Based on the above comparisons, the following suggestions result: Further note that that these decisions are longer run in nature as well. Drying charges will be deducted from fall checks, or charged to your account in December, for payment in December 2022, or January 2023. WebFor example, state average custom rates for harvesting corn and soybeans per acre increased to $41.63 and $40.18 from $39.34 and $37.29, respectively, two years ago. Drought in this area had a large negative impact on yields. 3.5 cents per point of moisture, per bushel, removed above 24.0%, split on half points DRYING RATES WILL BE APPLIED TO WET BUSHELS DRYING Rates for baling endstream endobj 2887 0 obj <>stream If too dry, pods may crack and drop seeds resulting in lower yields. Based on survey results, it would be possible to hire a custom operator well below the economic cost of owning and operating. These include resurfacing, restoration, and rehabilitation projects on all National Highway System (NHS) roadways, including interstates. Likewise, as grain prices decline the target moisture for harvesting corn decreases. This was $257 more than last week and $730 more than this week last year. Monticello, IL 61856, 1998-2023 Topflight Grain Cooperative. The farmdoc daily website falls under University of Illinois copyright and intellectual property rights. Machinery Costs: Harvest Operations. farmdoc Business Management, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, August 2019. "Cost Management: Tillage Operations." The goal is to report what is being charged, not what should be charged. Food grain: At 120.4, the index for February increased 4.8 percent from the previous month and 35 percent from a year ago. The new regulation will let States follow the updated standards of the American Association of State Highway and Transportation Officials, among others, without requiring an FHWA exception. The 2019 and 2020 crop years by March 15, 2020, The 2022 crop year by March 15, 2022, and. Theres no way to really blame them for making a business decision based on the numbers, but he feels matter-of-factly that irrespective of the reason, the end result here will be more consolidation and fewer small farmers. Since 1975 Alberta Agriculture & Rural Development has annually surveyed custom rates and rental rates to provide information to farmers and custom operators. Website designed and hosted by Kestrel Website Design | Ag Website Design Specialists, Kestrel Website Design | Ag Website Design Specialists. WebFor the week ending February 6,unshipped balancesof wheat, corn, and soybeans totaled 22.7 million metric tons (mmt). All rights reserved. The February price for all wheat, at $9.17 per bushel, is 69 cents higher than January and $3.34 higher than February 2021. For example, the cost of running a 320 horsepower combine on a 2,000-acre farm is $39.70 per acre for corn, equal to the cost of running a 540 horsepower combine on a 2,400-acre farm. Guidelines are available here. Ag Decision Maker A3-10, Iowa State University Extension and Outreach, Department of Economics, March 2020. "ARC-IC: Payment Examples and Revised 2019 ARC-IC Payment Calculator." Yields had to be well below benchmark yields before ARC-CO would make payments. Increasing the ARC-CO coverage level above 86% and/or the payment cap to over the current 10% of benchmark revenue. But that simply hasnt been typical of small town U.S.A. over the years, where the trend has been moving toward farmers building their own larger storage facilities. The effective reference price is capped at 115% of the statutory reference price or $9.66 for soybeans (8.40 x 1.15 = 9.66). The most significant appreciation in the land market in Brazil occurred in areas used for grain production, followed by sugar cane and coffee, according to the S&P Global Commodity Insights report (see Figure 1). Percentages were calculated from PLCs inception in 2014 to 2022. Grain hauling costs vary greatly depending on the distance to the storage location, the type of storage location, and the time it takes to unload, among other factors. The following comparisons are relevant to farms who already own newer harvesting equipment or those who are considering a purchase while aiming to manage costs effectively. Arguments are being made to increase statutory reference prices. 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Oats: For soybeans to have payments in 22% of the years like oats, the soybean statutory reference price would have to be above $8.57, the MYA price in 2019. 3 cents a point above 5.0%, Test Weight 1 cent from 53.9 51.0 This represents a 27-percent decrease in outstanding Pacific Northwest (PNW) grain inspections decreased 31 percent from the previous week, while Mississippi Gulf inspections increased 15 percent. ]j0IGH#wC.Sr>82:8wN|f%E"a;D"Wt(@=X( \.q5;%z_wloyWb}AE,m/BjE&fRAM.Bv @[o|vwvf^oVku8fj6JPKjU :tP`&j*IUNlJ9&7&d0i[wISndSU{uq^r[nYOa!6F.5afU&Emv]erbxbkDJKN0ry)G-uIY)7Z2?vjvnsU|?J(-I7c!J[r=,cup,x{CE~r+/OZ3$|my7Mw)Gn@XI 7c S] ` c1`^>c ic9t{yQ Deciding to outsource one or more harvest operations in a single year will reduce fuel, labor, and repair costs for the given year, but the ownership costs will remain. These rates are only intended as a guide. This is subject to change with market conditions. Smaller producers like Rubeck simply say its time to get out, as the added cost of transport to another grain elevator being the last straw. 9 months prepaid storage is required by the government to seal grain. farmdoc daily(12):97,Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign,June 29, 2022. WebTable 1: Grain Transport Cost Indicators (xlsx) - Weekly changes in truck, rail, barge, and ocean freight rates using diesel prices, nearby secondary rail market rates, Illinois barge The farmdoc economic cost estimate is set at $0.10 per bushel. Too much for he and four surrounding neighbors he named right off the top of his head, each of whom farm in the 200- to 300-acre range. Topflight Grains Mission: Our Topflight Grain Cooperative team is committed to the future of agriculture by improving the prosperity of our customers and employees through outstanding service, education, innovation, technology, and dedication. Soybean inspections decreased 8 percent from week to week, but inspections of corn increased 18 percent, as shipments to Asia increased significantly. The quality of data is dependent on the cooperation received by producers as well as commercial custom operators. MYA price estimates for 2022 are used as the marketing year is not over. <>/Metadata 6449 0 R/ViewerPreferences 6450 0 R>> USDA Releases Report Showing Manures Use By Crop, U.S., Five Other Ag Exporting Countries Say India Is Vastly Underreporting Its Wheat, Rice Subsidies, Ag Credit Tightens with Rising Interest Rates and Following Bank Collapses, Ideas Big and Small: Create a Culture of Creativity on Your Farm, Dust Bowl 2.0? Biodiesel, waste vegetable oil (wvo), and Main Facility Monticello Web1.4% per point to 15% for corn that is contracted or sold (broken on the 1/2) 1.4% per point to 15% for corn put in DP (broken on the 1/2) 1.4% per point to 14% for corn put in storage WebIndustrial Hemp Grain Production Budget Estimated costs per acre, conventional tillage, Pennsylvania, 2018 Item Quantity Unit Price Total Your Estimate Variable Costs Custom operations Soil test 1.0 acre $2.00 $2.00 Combine small grain 1.0 acre $33.10 $33.10 Grain hauling 320.0 bushel-mile $0.04 $12.80 Farms that own a grain drying and storage facility may have additional incentive to do all harvest operations themselves. These changes could also potentially benefit other crops if their market prices increase relative to their statutory reference prices in the future. For a given size of combine, the economic cost per acre declines as the acreage increases. farmdoc daily(10):20,Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign,February 4, 2020. An $8.57 reference price is 6% higher than the current $8.40 statutory reference price. The decision to invest in more grain storage units on their own farms is a weighty one. For the week ending December 3, unshipped balances of wheat, corn, and soybeans totaled 57.8 million metric tons (mmt). Custom operators to haul grain are generally available for hire, and at a cost that is the same as the farmers cost of owning and operating. "2014 Farm Bill: The Supplemental Coverage Option." 2.0% shrink/half percent of moisture above 15.0% Wheat: To trigger in 67% of the years, soybeans statutory reference price would have to be above $10.10, 20% higher than the current statutory reference price. Clay County farmer and insurance agent Scot Rubeck said for him and a number of his neighbors, this will be the last growing season, and the lack of access to local grain elevators going forward is a major factor in that decision. 3 cents a point from 10.1% to 15.0% Swanson, K., G. Schnitkey, N. Paulson, C. Zulauf and J. Coppess. "Effective Reference Price Past and Future." The University of Illinois farmdoc machinery cost estimates for harvesting include combining, using grain carts, and hauling grain. As a result, PLC has yet to be an effective risk management program for soybeans. 21-30 miles to Unfortunately, both locations require significant investments to maintain proper services, and there is simply not enough volume for us to be able to support that decision.. A $14 reference price would be 66% higher than the current reference price. Meanwhile, the smaller farmers will be facing a much costlier barrier, and what elevators do wind up receiving the grain will see their own costs rise due to longer lines. This When combines or grain carts are used on fewer acres than those referenced, the cost of operation rises. With crop production and prices at levels that should have had folks excited and optimistic, many in the field are still weeding through problems great and small related to the COVID-19 pandemic. Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, Swanson, K., G. Schnitkey, N. Paulson, C. Zulauf, J. Coppess ", CFAP Payments to Date and Possible Future Ad Hoc Farm Payments, Department of Agricultural and Consumer Economics, Department of Agricultural, Environmental and Development Economics. The per-hour rate begins at the time the machine leaves for the farm until the vac job is completed. Ive heard more small farmers say theyre not going to continue farming after this year than any other in my 15 years in the ag business, Rubeck said. Typically combining costs are expressed on a per acre basis and run about $30.00 per acre ($0.20/bu @150 bu/acre). &iyxuaAa[@&w,mZ2~_ns5F|>&OaBjM0ki]Qj)-6S3MVP7d\3U:>mfSWMPE>6`cd90fbA@b6n!-x LN=9g]Lzt3@W.SD;.K7Q? As shown in Figure 3, ARC-CO made payments in the Great Plains, particularly in North and South Dakota. The farmdoc daily website falls under University of Illinois copyright and intellectual property rights. For corn, once the crop has reached maturity the desirable moisture level for grain at harvest is 15%. The local break-even for corn this year was between $4 and $4.75 per bushel, with $10 to $11 for soybeans, depending on size variables, he said. Based on the Iowa State data, average custom rates for tillage, planting, and harvest operations in 2022 are expected to increase by about 7 percent, compared to the Fall contracts and DP are shrunk to 15% moisture. Foreign Material All foreign material in excess of 1.0% will be deducted from gross weight and will not be paid. 1 0 obj This publication presents a summary of custom work and rental rates. Except for soybeans, payments occurred on average in 64% of the years across all crops (see Table 1). Grain transportation costs can be divided into two categories: ownership costs, which occur regardless of how much the truck or tractor is used, and operating costs, which vary directly with the number of miles driven. Also called fixed costs, include depreciation, interest, insurance, and licenses. Accurate operational cost data are key to public agencies decisions to fund roadway projects, and the efficient movement of freight and commodities, including grain, depend on these projects. WebHarvesting, Drying, and Hauling Grain (continued) Average Charge Median Charge Range Number of Responses Drying corn (includes fuel, electricity, labor) - continuous flow Alternatively, harvesting at moisture levels above 15% can result in added costs for drying. Brown, G. Schnitkey, K. Swanson, J. Coppess and N. Paulson. Given all that, its increasingly problematic for producers under about 1,500 acres to handle the increased costs associated with trucking grain an extra 20 to 40 miles, let alone finance extensive capital improvements such as bins on their own farm, he said. Elevated autumn temperatures can lead to rapid grain moisture loss, with losses as great as 1% per day when temperatures are high and particularly when also breezy (see Nafziger, September 16, 2017). Litz said many of his larger customers are building additional storage operations on their own farms, and this could certainly bring risk depending on the future costs of inputs and market prices. Farmers who own and operate their own machinery for harvest operations are able to make these decisions and select an optimal harvest order and timing. The 2018 Farm Bill added the effective reference price (see farmdoc daily, June 29, 2022). :j|vM;W=&%7A[OE]7n []k Litz said hes been having conversations with his ag clients since the announcement was made. = 28). With the Brazil and Clay City facilities holding roughly 700,000 bushels of grain between them, that load will now be bottle-necking the line somewhere else, he said. As shown in Table 2, the economic cost per acre is dependent on acres to harvest and size of combines and heads, a larger combine used on more acres can have the same per acre cost as a smaller combine used on fewer acres. Farms may have some of the equipment needed already and it may be fully paid for and fully depreciated. The per-hour charge includes one man, vac-u-lator machine, and fuel. Wheat triggered in 67% of the years. 2 cents/lb below 51.0, Sour 5 cents/bushel Webcorn price, at $6.10 per bushel, is up 53 cents from last month and $1.35 from February 2021. 2 0 obj The economic cost of harvesting corn is $37.61 per acre, within $2 per acre of the custom rate average and median. Raising soybeans reference price to this level would have large budgetary impacts for the next Farm Bill. This profit maximizing decision will vary from farm to farm. Despite the drop in grain inspections, total rail deliveries of grain to U.S. ports remained strong; increasing 122 percent from last year and increasing 64 percent from the 3-year average in the last 4 weeks. The rate from PNW to Japan was $23.25 per mt, unchanged from the last available rate on December 3. Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. Under the 2018 Farm Bill, PLC provides payments when the market year average (MYA) price is below the effective reference price, which can be above the statutory reference price. The charge for use of the vac-u-lator for farm-stored grain (or grain mishaps) is $100/hour with a minimum of $200. Inputs are going to be significantly higher next year. The lack of historical payment support, even during a trade war which significantly impacted soybeans, suggests that PLC has been relatively ineffective at providing price risk management for soybeans. As corn price increases the moisture at which it becomes profitable to start harvest increases. At $6.50 that would be 175.50 - 60 for fuel. As a result, the MYA had to be below the $8.40 statutory reference price for PLC to pay since its inception in 2014 through 2023. Mo@i$JJW$n++*iG*%r`%xKq|A"[[b5aK #r!s01%+ve)?_*CV+K|"g/XJQ'$MSi9tCLaxr j]. The lowest MYA prices of $8.48 in 2018 and $8.57 in 2019 occurred during the trade war with China. eA@ ct1(qOJ=_V! , ypVCD_<9tZA O.kkJGQGMFR'/.~i*Aiqt/WOtOym]0|xC4K^tyQ4s#s0 %q04#7CT;X8;2K(oxFuI`=Q)6E;*pQi3p#34vAGN9#24X ,FKh`i44Y%ml'Y8o9(B>S{/ t Topflight Grains Vision: To become Illinois best cooperative measured in customer satisfaction, volume, storage, revenue, and pride. Custom Rates for Grain Sorghum Harvest, 2018, by District District Although it is likely easier to secure trucking when hauling direct to a market, in some areas custom trucking to a farm bin site is also possible. Corn production for 2021 is forecast to exceed 15 billion bushels, with beans at 4.45 billion, and average yields of 176.5 and 51.5 bushels per acre, respectively. Given PLCs performance, the 15% of soybean acres enrolled in PLC seems high. PLC has provided no payments for soybeans from 2014 through 2022. These are record times that were in front of, he said, noting the yields and prices. According to the study, from 2018 to 2019, the average marginal cost per mile incurred by motor carriers decreased 9.3 percent to $1.65. Rubeck harbors no ill will toward the cooperative and said hes always liked their employees. This was an 11-percent increase from the previous week, 21 percent more than last year, and 16 percent more than the 3-year average. Sour 10 cents/bushel WebFLAT RATE COMBINING AND HAULING fuel 0.30 0.30 COMBINING AND HAULING CORN fuel Combining and hauling CornReported as Combination of per Acre rate, hauling, plus overage Rate per Acre Hauling per Bushel Overage Rate per Bushel Overage charged on yields over: ResponsesAverageMinimumMaximumMost Common endobj New WOTUS Rule on Hold for More Than Half of U.S. Annually, Iowa State University surveys those who hire and/or perform custom farm services and compiles a report of results. Peanuts: To trigger in 100% of the years, soybeans statutory reference price would have to be above $14.00, the current FSA projection for the 2022 MYA price. A partner in Allied Insurance Agency and broker of crop and farm insurance by day, Rubeck has been a lifelong producer as well as an auctioneer with 15 years in ag. 0.6% of price/point 10.1 and above. Harvest decisions may also be dependent on requirements of a landlord or business owner. Consider timing and the resulting impacts on costs and revenue that are expected to determine the best fit for the farm. Its already bottle-necked a little as it is, he said, noting this is why many of the bigger outfits simply haul their own grain greater distances, some all the way down to the barges near Evansville. 40 miles $.20/bu. U?D.s?f{O*lIBCy=r>mbI0|Y"!w' 6@GLuG}iUw49"ZS..a2dB65*I"X^B^UGaHWMql@a=z!}"c?| o7}0FJ@6c\'"f{RcZ5s5D["}%g=_{hg@ID?a>UxZ`EG,E>qFlsLwt:dw{7Un66/`rk/@I_x7@wU:;N/(=`W@6A jyBi%tRbtBwu?]W7/tTCXl E:TW+]-fHyN%N8A_v\ cwiLXMC Qu;$t4))pvtA&H8):D/=q!Gm,$\X2:H XyDXBNt$(9b4qRG5}sNfl-Zzq:{F$f/ZeA]FZ D2ZidI;!OQE]u( - ! ARC-CO is a revenue program that makes payments when county revenue is below 86% of benchmark revenue. Storage costs are around $0.03 per bushel per month. This was 36 percent more than the previous week and 58 percent more than the same period last year. 4 0 obj Still, that average was 6 cents higher than in 2016, the last time the freight market softened. Given this reference price, PLC would have paid in 2018 and 2019, the height of the trade war. Another consideration is owning equipment that is sized appropriately for acres and production. For farms in that situation, the cost of retaining that equipment to use as needed is comparatively lower than the economic cost of a newer implement because depreciation and interest make up a large portion of the economic costs. Harvesting before optimal timing can result in additional drying costs and harvesting after optimal timing can result in yield loss as the grain continues to dry and lose moisture. This can be a way to reduce capital demands and cover one of the necessary harvest job tasks without the added labor costs of an additional farm operator. A seemingly comparable figure is the rate for hauling to market five miles away with an average and median at $0.10 per bushel, and rates ranging from $0.05 per bushel to $0.20 per bushel. endstream endobj 2886 0 obj <>stream Net corn export sales were 1.362 mmt, down 1 percent from the past week. I am getting 1/2 penny per bushel per mile. Several options exist for reducing non-land costs, such as previously covered tillage related costs (farmdoc daily, August 18, 2020) and this article focusing on harvest related costs. A summary of costs for harvest operations from the farmdoc machinery cost estimates is shown in Table 1 next to the corresponding average, median, minimum and maximum custom rates from the Iowa survey responses. Open storage and warehouse receipts are shrunk to 14.0% moisture, Corn Drying 5 cents/point of moisture above 15.0%, based on half points, from 15.1 19.0.0%, 4 cents/point of moisture, based on half points, from 19.1-24.0%, 3.5 cents/point of moisture, based on half points, above 24.1%, Damage 1 cent each point of damage above 5%, to 7.0%, 2 cents a point from 7.1% to 10.0% This is particularly problematic for farmers who cash-rent their ground for a fixed price. farmdoc daily(4):37,Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign,February 27, 2014. Net wheat export sales were 0.617 mmt, up 38 percent from the previous week. For farms with fields in multiple locations, optimal harvest timing may not be reached in a logistical order. On a 900 bushel load, that would give me 27 bushel. Having a combine adequately sized for acres to be harvested is an important consideration when making harvest equipment decisions. For example, a 2,000-acre farm could run a 540 horsepower combine at a cost of $45.80 per acre for corn or a 320 horsepower combine at a cost of $39.70 per acre for corn. Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. However, soybeans effective reference price did not increase above the statutory reference price during the life of the 2018 Farm Bill (2019 to 2023). farmdoc daily(9):173,Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign,September 17, 2019. However, the ability to outsource is dependent on finding a custom operator and getting the work done in optimal timing. More beneficial improvements likely come from changes to ARC-CO or the effective reference price mechanism. And it never helps when a local grain elevator announces its intent to stop receiving grain. The economic cost for combining corn and soybeans is based on ownership of a 470 horsepower combine with a 35-foot grain head and a 12-row corn head used to harvest 1,500 acres of corn and 1,000 acres of soybeans. The only good news he could see is that the decision to close might create an opportunity for a smaller organization to perhaps open an elevator service to fill the gap. The additional cost associated with that drive is just one too many, Rubeck said. For The Grain Hauling Cost Calculator was developed as a decision aid to assist Tennessee producers in estimating the cost of transporting corn, wheat, and soybeans from their farm to alternative locations. Also included are state level 2016 average rates, 2020 rates as a percent of 2016 and historical comparisons back to 1995 for selected operations. Shane Litz, vice-president and commercial loan officer at Terre Haute Savings Bank, said the local elevators decision to close its grain business will impact farmers throughout the region. Timing of harvest is also critical in cost management considerations. WebCost per bushel is useful when producers are comparing marketing alternatives. From 2019 to 2022, the average cropland for grain production value increased 128%, from $1,875 to $4,271 per acre. However, a 5% increase would have little impact on soybeans, as the reference price would be only $8.82 per bushel. The data presented in this report was obtained by contacting producers and custom operators and thus represent actual charges. WebIf 1,000 bushels are hauled each trip, the price at the second location would have to be ($208 / 1,000 miles) = $.208 per bushel higher to make up for the greater hauling cost. Improve the effective reference price mechanism by raising the factor on the Olympic moving average above 85% and/or increasing the limit on the payment factor above 115% of the statutory reference price. 5 cents a point above 15.0%, Foreign Material 2 cents each point from 3%-5% When spread over the same acres used to calculate farmdoc economic costs, the total average cost for custom combining is $90,650 (1,500 x $36.70 + 1,000 x $35.60). Based on the combined fertilizer and fuel cost increases, cash costs increased $0.58 per bushel (from $2.28/bushel to $2.86/bushel) for the dryland corn budget using a 145-bushel yield and $0.66 per bushel, increasing from $2.16/bushel to $2.82/bushel for the irrigated corn budget with a 245-bushel yield. 4.0 cents per point of moisture, per bushel, removed from 19.1 24.0%, split on half points. From 2019 to 2022, the average cropland for grain production value increased 128%, from $1,875 to $4,271 per acre. Guidelines are available here. However, mature soybeans can dry quickly, in a matter of hours, rather than days. "2020 Iowa Farm Custom Rate Survey." The seeds can absorb moisture overnight, so timing of harvest within a day may be important (see Nafziger, September 16, 2017).