Estimating Farm Machinery Costs - National Ag Risk Education Library

Example Worksheet for Estimating Farm Machinery Costs
Tractor or
Implement or
Information Power Unit Attachment
Machine ________________ 180-hp tractor
________________
28-foot disk
a. Current list price of a comparable replacement machine
$110,000
________________
$30,000
________________
b. Purchase price or current used value of the machine
$93,500
________________
$11,000
________________
c. Accumulated hours to date (zero for a new machine)
0 hr.
________________
600 hr.
________________
d. Economic life, years of ownership remaining
15 yr.
________________
8 yr.
________________
e. Interest rate, % (cost of capital minus inflation)
5%
________________
5%
________________
f. Annual use, acres
1,600 acres
______________
g. Field capacity, acres/hr. or tons/hr.*
16 acres/hr.
_______________
h. Annual use, hours (f g for implement)
400 hr.
________________
100 hr.
________________
i. Engine or PTO horsepower
180 hp.
________________
j. Fuel price
$1.00/gal.
________________
k. Machinery labor rate
$10/hr.
________________
Estimating Ownership Costs
1. Remaining value (% from Table 1) list price a
23%
____________
$25,300
________________
24%
____________
$7,200
________________
2. Total depreciation = (b – 1)
$68,200
________________
$3,800
________________
3. Capital recovery factor (from Table 2)
.096
________________
.155
________________
4. Capital recovery = (2 3) + (e 1)
$7,812
________________
$949
________________
5. Taxes, insurance, and housing = 0.01 b
$935
________________
$110
________________
6. Total ownership cost per year = 4 + 5
$8,747
________________
$1,059
________________
Estimating Operating Costs
0 hr.
7. Accumulated hours to date (c) and repair % from Table 3 ____________
0%
________________
600 hr.
____________
8%
________________
8. Total accumulated hours at end of life =
6,000 hr. 25% 1,400 hr. 32%
(d h) + c, and % from Table 3 ____________ ________________ ____________ ________________
9. Total accumulated repairs = (% from 8 – % from 7) a
$27,500
________________
$7,200
________________
10. Average repair cost/hour =
$4.58 $9.00
9 (hours from 8 – hours from 7) ________________ ________________
11. Fuel cost/hour = 0.044 (diesel) or 0.06 (gasoline) i j
$7.92
________________
12. Lubrication cost/hour = 0.15 11
$1.19
________________
13. Labor cost/hour = k 1.1
$11.00
________________
14. Total operating cost/hour = 10 + 11 + 12 + 13
$24.69
________________
$9.00
________________
15. Ownership cost/hour = 6 h
$21.87
________________
$10.59
________________
16. Total cost/hour = 14 + 15
$46.56
________________
$19.59
________________
17. Total cost per hour for tractor and implement combined
$66.15
____________
18. Total cost/acre or ton = 17 g
$4.13
____________
*Average hourly work rates for many farm machines are listed in PM 696, Estimating Field Capacity of Farm Machines.
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