MACHINERY COST ESTIMATES - University of Minnesota

MACHINERY COST ESTIMATESbyWilliam F. Lazarus and Andrew SmaleJune 2010The tables in this publication contain estimates of farm machinery operation costs calculated via an economicengineering approach. The data are intended to show a representative farming industry cost for specified machinesand operations.Machine costs are separated into time-related and use-related categories. Use-related costs are incurred only when amachine is used. They include fuel, lubrication, use-related repairs and labor. Time-related costs, also oftenreferred to as overhead costs, accrue to the owner whether or not a machine is used. Overhead includes time-relatedeconomic costs: interest, insurance, personal property taxes, and housing. There are no personal property taxes inMinnesota. Depreciation is both a use- and a time-related cost. Depreciation will be related to use to the extent thatincreased annual usage shortens years of life and/or reduces salvage value. While not entirely use-related,depreciation is included along with operating expenses and labor costs in the columns labeled "use-relatedcost/acre".OVERHEAD COSTS: Time-related costs are prorated over a 12 year economic life except where otherwiseindicated. Trade-in values are estimated based on American Society of Agricultural Engineers formulas. Incometax implications are ignored. A housing charge of 67 cents per square foot of shelter space needed per year is made.A six percent “real” (inflation-adjusted) interest rate is used in the cost estimates. This real rate is calculated bytaking a nominal rate charged by lenders, minus a measure of the inflation rate per year expected over the years ofownership. Insurance is charged at 0.85 percent of the undepreciated value. The interest and insurance cost formulasare slightly different from those used in previous years. Adding one year's depreciation to the numerator in effectbases the costs on the value at the beginning of each year owned. This gives a slightly more accurate calculation ofthe actual costs over the years owned. In states where farm machinery is taxed as personal property, property taxcould be calculated in a similar manner, depending on how taxes are assessed.Formulas used to compute machinery overhead costs:purchase cost + salvage value + depreciation ($/year)Interest, $/year = -------------------------------------------------------------------- x “real” interest rate2purchase cost + salvage value + depreciation ($/year)Insurance, $/year = ---------------------------------------------------------------------2x insurance rateHousing, $/year = price per sq. foot x sq. feet shelter space requiredTaxes per year = 0 (no taxes on personal property in Minnesota)A related spreadsheet, MACHDATA.XLS, is available at:http://www.apec.umn.edu/faculty/wlazarus/documents/Machdata.xls.

USE-RELATED COSTS: Fuel cost is calculated by multiplying the fuel consumption by the price of fuel, with fuelconsumption assumed to be 0.044 gallons of diesel fuel per PTO horsepower-hour on average for each implementtype. Fuel consumption per acre is averaged across sizes within a given implement type. The price of farm dieselfuel is projected at $2.60 per gallon. All power units, tractors, combines, trucks, etc., use diesel fuel. Lubricationcost is assumed to be 10 percent of fuel cost.The formulas for repair and maintenance costs estimate total accumulated repair costs based on accumulated hoursof lifetime use. Repair and maintenance calculations are based on American Society of Agricultural Engineersformulas. The total cost is then divided by accumulated hours to arrive at an average per hour cost estimate. Theamount of annual use of a machine is an estimate of the number of hours a commercial farmer would use thatparticular machine in one year.Labor is charged at an hourly wage rate, which includes 30 percent benefits. Charge rates are $14.00 per hour forunskilled labor and $17.50 per hour for skilled labor. The skilled labor rate is generally used with the planting andharvesting equipment and sprayers. Labor per acre for an operation such as plowing or disking is calculated byusing the work rate on the implement. Less labor per acre is used in a disking operation that covers more acres perhour than in a plowing operation. A small amount of extra labor is added over and above machine time to allow fordowntime for tasks such as making adjustments and filling sprayers and planters. The labor adjustment ranges from2 percent additional time for tillage to 33 percent for spraying.Economic depreciation is included in use-related costs, calculated using the straight-line formula:purchase cost - salvage valueDepreciation, $/year = ------------------------------------years you will use machineThese estimates will not represent any given individual's cost. Differences in buying power, repair programs,average annual use, and overall replacement programs should be considered when making adjustments. It may beuseful to record actual expenses for at least a few of your implements and compare your costs to these estimates.These estimates will differ from records because they are estimates, but also because they are averaged over the useperiod and are expressed in today's dollars. If these estimates are compared to recorded costs that include repairs ordepreciation based on historical costs, one adjustment that would be required for comparability would be to indexthe historical cost to current prices.THE BOTTOM LINE: Machinery costs are substantial; control of them is important. Custom charges are oftenbased upon them. No one should do custom work unless the charge will cover operating costs and use-relateddepreciation plus a return for one's risk and time. Ideally, all allocated per acre or hour overhead costs should alsobe covered by anyone offering to do custom work. The market for custom work usually does not cover all costs.The market is usually somewhere in between the Use-related costs and total costs.ACCESS TO EDUCATIONAL PROGRAMS AND MATERIALS:The University, including the University of Minnesota Extension Service, is committed to the policy that all personsshall have equal access to its programs, facilities, and employment without regard to race, color, creed, religion,national origin, sex, age, marital status, disability, public assistance status, veteran status, or sexual orientation.2

Summary of Per Acre Use-Related Costs and Total Cost for Implements with Associated Power Units,Averaged Over All Sizes by Implement TypeUse-RelatedCost/Acre 1TotalCost/AcreUse-RelatedCost/Acre 1TotalCost/AcreChisel Plow $7.47 $10.01Chisel Plow, Front Dsk $9.12 $12.46Moldboard Plow $14.70 $19.00Field Cultivator $3.99 $5.47Tandem Disk $6.61 $8.85Tandem Disk H.D. $7.39 $10.10Offset Disk $9.51 $12.43V-Ripper $8.59 $11.39Comb Disk & V-Ripper $13.08 $17.97Row Crop Planter $7.29 $10.85Min-Til Planter $9.31 $12.85Beet Planter $19.40 $28.79Beet Planter, Vacuum $9.01 $15.31Presswheel Drill $8.70 $11.86Air Seeder Drill w/Cart $11.18 $16.81No-Till Drill $11.83 $16.36Prairie Grass Drill $11.02 $16.50Cultipacker seeder $7.52 $10.29Row Cultivator $4.20 $5.52Rotary Hoe $1.94 $2.49Sugar Beet Cult $10.01 $14.21Boom Sprayer, Self-Prop $3.72 $5.25Boom Sprayer $2.07 $2.64Stalk Shredder $9.23 $12.28Mower-Conditioner $9.68 $13.17Rotary Mow/Cond $6.16 $8.57Hay Rake (Hyd) $4.51 $5.53Hay Swather-Cond $7.70 $10.97Swather-Cond, Self-Prop $13.64 $22.18Grain Swather, Self-Prop $9.32 $15.04Hay Baler PTO Twine $10.41 $12.34Round Baler $6.29 $7.28Rd Baler/Wrap $7.35 $8.52Rd Baler/Wrap CornStover $10.79 $12.70Large Rectangular Baler3x3 $8.33 $10.73Large Rectangular Baler4x3 $9.14 $11.85Forage Harvester (CornHead) $43.73 $54.33Forage Harvester(Pickup Head) $16.34 $19.97Corn Head for SPHarvstr Base $34.76 $50.94Pickup Head for SPHarvstr Base (2XWindrows) $23.01 $33.80Combine Corn Hd $25.81 $33.17Combine Grain Head $19.35 $24.50Grain Cart $14.57 $19.07Combine Soybean Hd $25.36 $32.12Combine Belt Pickup Hd $23.93 $30.74Bean Cutter $7.65 $9.94Bean Rod $6.89 $8.71Bean Windrower $10.06 $13.80Sugar Beet Lifter $52.60 $68.76Sugar Beet Topper $10.59 $14.741 Use-related cost/acre includes fuel, lubricants, repairs and maintenance, labor, and power and implementdepreciation (depreciation is both time-related and use-related). The difference between use-related cost and totalcost is that total cost also includes overhead costs (interest, insurance, and housing).3

Net Cost Annual Fuel & Maintenance Depreciation --Overhead 3 -- --Total Cost-- DieselTractor or of a New Hours Oil Cost & Repair Cost Per Cost Per Cost Per Per Year Per Hour Use/HrCombine HP 1 Power Unit 2 of Use Per Hour Cost/Hr Hour Year Hour Of Use Of Use GallonsTractors and Combines (Without Heads)40 HP $21,000 400 $5.03 $0.71 $2.79 $1,080 $2.70 $4,491 $11.23 1.7660 HP 25,000 400 7.55 0.84 3.32 1,282 3.20 5,966 14.91 2.6475 HP 34,000 400 9.44 1.20 4.38 1,746 4.37 7,754 19.38 3.30105 HP MFWD 75,000 450 13.21 2.25 10.12 3,507 7.79 15,019 33.38 4.62130 HP MFWD 107,000 450 16.36 3.21 14.44 4,969 11.04 20,272 45.05 5.72160 HP MFWD 124,000 500 20.13 4.13 15.14 5,775 11.55 25,481 50.96 7.04200 HP MFWD 160,000 500 25.17 5.33 19.54 7,420 14.84 32,440 64.88 8.80225 HP MFWD 177,000 400 28.31 4.72 26.71 8,267 20.67 32,164 80.41 9.90260 HP 4WD (226PTO) 186,000 400 28.47 2.98 28.07 8,678 21.70 32,482 81.20 9.95310 HP 4WD (270PTO) 198,000 400 33.94 3.17 29.88 9,227 23.07 36,022 90.05 11.87360 HP 4WD (313PTO) 208,000 400 39.41 3.33 31.39 9,685 24.21 39,336 98.34 13.78425 HP 4WD (370PTO) 245,000 400 46.53 3.92 36.97 11,378 28.45 46,346 115.87 16.27260 HP TrackedTractor 186,000 400 32.72 2.98 28.07 8,678 21.70 34,183 85.46 11.44275 HP Combine 241,000 300 34.61 40.21 52.72 10,818 36.06 49,076 163.59 12.10340 HP Combine 274,000 300 42.79 45.71 59.93 12,329 41.10 56,859 189.53 14.96440 HP Combine 327,000 300 48.20 54.55 71.53 14,649 48.83 66,935 223.12 16.85315 HP SP ForageHarvester Base Unit 215,000 200 21.62 16.29 62.58 10,346 51.73 30,446 152.23 7.56570 HP SP ForageHarvester Base Unit 319,000 200 39.12 24.18 92.85 15,189 75.95 46,420 232.10 13.681 HP shown for the smaller tractors is PTO horsepower.Engine HP is shown for the larger tractors. PTO HP for the larger tractors runs about 87% of engine HP, and is shown inparentheses.Fuel use is estimated at 0.044 gallons of diesel fuel per hour per PTO HP.2 Net cost of a new unit assumes no trade-in.Farm machinery is exempt from sales tax in Minnesota so no sales tax is included.3 Overhead costs include interest, insurance, and housing but not depreciation, which is shown separately because it varies to some extent with use.Overhead per hour will varywith annual use.4

Tractor Net Cost --Estimated-- Labor --Implement Cost/Acre-- Total Use-related DieselSize of a New Work-Performed -Power Cost/Acre 2 - Cost Deprec- Cost Cost Fuel(HP) Implement 1 Acres/hr Acres/yr Fuel Other Per Acre Repairs iation Overhead 3 Per Acre 4 Per Acre 5 Gal/AcrePresswheel Drill 16 Ft 105 HP MFWD $18,000 6.79 509 $1.75 $2.97 $2.86 $0.84 $1.90 $1.90 $ 12.22 $ 9.17 0.61Presswheel Drill 20 Ft 130 HP MFWD $21,000 8.48 636 $1.75 $3.38 $2.29 $0.78 $1.77 $1.79 $ 11.76 $ 8.67 0.61Presswheel Drill 25 Ft 130 HP MFWD $35,000 10.61 795 $1.75 $2.71 $1.83 $1.04 $2.36 $2.32 $ 12.01 $ 8.65 0.61Presswheel Drill 30 Ft 160 HP MFWD $44,000 12.73 1,018 $1.75 $2.42 $1.53 $1.18 $2.32 $2.24 $ 11.44 $ 8.28 0.61Air Seeder Drill w/Cart 52 Ft 260 HP 4WD (226 PTO) $166,000 22.06 1,765 $1.29 $2.39 $0.88 $2.56 $5.05 $4.64 $ 16.81 $ 11.18 0.45No-Till Drill 15 Ft 130 HP MFWD $34,000 6.36 509 $2.31 $4.51 $3.05 $1.82 $3.58 $3.43 $ 18.70 $ 13.53 0.81No-Till Drill 20 Ft 160 HP MFWD $36,000 8.48 679 $2.31 $3.63 $2.29 $1.44 $2.85 $2.76 $ 15.28 $ 11.16 0.81No-Till Drill 30 Ft 200 HP MFWD $63,000 12.73 1,018 $2.31 $3.12 $1.53 $1.68 $3.32 $3.15 $ 15.10 $ 10.79 0.81Prairie Grass Drill 10 Ft 60 HP $24,000 5.15 258 $1.34 $1.43 $3.53 $0.94 $5.00 $4.76 $ 17.01 $ 11.63 0.47Prairie Grass Drill (Twinned) , 21 Ft 105 HP MFWD $53,000 10.82 541 $1.34 $1.86 $1.68 $0.99 $5.26 $4.85 $ 16.00 $ 10.42 0.47Cultipacker seeder 12 Ft 60 HP $13,000 6.18 309 $1.22 $1.19 $2.94 $0.43 $2.26 $2.25 $ 10.29 $ 7.52 0.43Crop Maintenance 0 $0 $ - $ -Row Cultivator 12 Row-30, 30 Ft 160 HP MFWD $17,000 15.45 1,545 $1.26 $1.99 $0.94 $0.26 $0.62 $0.58 $ 5.66 $ 4.33 0.44Row Cultivator 16 Row-30, 40 Ft 200 HP MFWD $23,000 20.61 2,061 $1.26 $1.93 $0.71 $0.26 $0.63 $0.59 $ 5.38 $ 4.07 0.44Rotary Hoe 21 Ft 105 HP MFWD $12,000 25.96 2,596 $0.51 $0.78 $0.56 $0.13 $0.26 $0.26 $ 2.49 $ 1.94 0.18Sugar Beet Cult 12 Row, 22 Ft 105 HP MFWD $17,000 5.60 336 $2.30 $3.60 $2.60 $0.39 $2.87 $2.68 $ 14.44 $ 10.37 0.81Sugar Beet Cult 24 Row, 44 Ft 200 HP MFWD $40,000 11.20 672 $2.30 $3.55 $1.30 $0.45 $3.38 $3.00 $ 13.98 $ 9.65 0.81Boom Sprayer, Self-Prop 60 Ft None $98,000 33.09 3,309 $0.20 $0.01 $0.66 $1.42 $1.43 $1.53 $ 5.25 $ 3.72 0.07Boom Sprayer 50 Ft 60 HP $20,000 25.61 2,561 $0.29 $0.29 $0.85 $0.38 $0.38 $0.44 $ 2.64 $ 2.07 0.10Stalk Shredder 20 Ft 130 HP MFWD $24,000 7.76 776 $2.11 $3.70 $1.99 $1.04 $1.83 $1.63 $ 12.28 $ 9.23 0.74Harvest 0 $0 $ - $ -Mower-Conditioner 9 Ft 40 HP $20,000 4.36 349 $1.15 $1.42 $3.53 $0.89 $3.30 $2.87 $ 13.17 $ 9.68 0.40Rotary Hay Mower 6 Ft 40 HP $4,000 2.91 291 $1.73 $2.13 $4.81 $0.81 $0.72 $0.80 $ 11.00 $ 9.27 0.61Rotary Mow/Cond 12 Ft 75 HP $27,000 8.73 698 $1.08 $1.14 $1.68 $0.53 $2.23 $1.90 $ 8.57 $ 6.16 0.38Hay Rake (Hyd) 9 Ft 40 HP $7,000 6.11 489 $0.82 $1.01 $2.29 $0.21 $0.83 $0.83 $ 6.00 $ 4.73 0.29Hay Rake (Wheel, 2-16') 30 Ft 40 HP $43,000 26.18 2,095 $0.19 $0.24 $0.53 $0.31 $1.19 $1.04 $ 3.50 $ 2.36 0.07Hay Swather-Cond 14 Ft 60 HP $29,000 6.79 543 $1.11 $1.08 $2.06 $0.83 $3.08 $2.79 $ 10.97 $ 7.70 0.39Swather-Cond, Self-Prop 16 Ft None $108,000 7.76 621 $0.91 $0.12 $1.80 $0.89 $10.03 $8.42 $ 22.18 $ 13.64 0.36Grain Swather, Self-Prop 25 Ft None $112,000 12.12 970 $0.91 $0.08 $1.16 $0.59 $6.66 $5.64 $ 15.04 $ 9.32 0.35Hay Baler PTO Twine 12 Ft 40 HP $22,000 4.36 873 $1.15 $1.42 $4.45 $2.54 $1.46 $1.32 $ 12.34 $ 10.41 0.40Round Baler 1000 Lb, 20 Ft 75 HP $21,000 9.45 2,364 $1.00 $1.05 $1.64 $2.05 $0.51 $0.44 $ 6.71 $ 5.80 0.35Round Baler 1500 Lb, 20 Ft 75 HP $29,000 9.45 2,364 $1.00 $1.05 $1.64 $2.84 $0.71 $0.61 $ 7.85 $ 6.78 0.35Rd Baler/Wrap 1500 Lb, 20 Ft 75 HP $35,000 9.45 2,364 $1.00 $1.05 $1.48 $3.42 $0.86 $0.71 $ 8.52 $ 7.35 0.35Rd Baler/Wrap Corn Stover 1500 Lb, 20Ft 105 HP MFWD $54,000 9.45 2,364 $1.40 $2.13 $1.48 $5.28 $1.32 $1.08 $ 12.70 $ 10.79 0.49Detail Page 2

Tractor Net Cost --Estimated-- Labor --Implement Cost/Acre-- Total Use-related DieselSize of a New Work-Performed -Power Cost/Acre 2 - Cost Deprec- Cost Cost Fuel(HP) Implement 1 Acres/hr Acres/yr Fuel Other Per Acre Repairs iation Overhead 3 Per Acre 4 Per Acre 5 Gal/AcreLarge Rectangular Baler 3x3 20 Ft 130 HP MFWD $87,000 11.64 2,909 $1.41 $2.47 $1.67 $2.00 $1.73 $1.45 $ 10.73 $ 8.33 0.49Large Rectangular Baler 4x3 20 Ft 130 HP MFWD $106,000 11.64 2,909 $1.41 $2.47 $1.67 $2.44 $2.11 $1.76 $ 11.85 $ 9.14 0.49Forage Harvester (Corn Head) 2 Row, 5Ft 105 HP MFWD $27,000 1.38 276 $9.58 $14.62 $14.09 $5.52 $5.56 $4.95 $ 54.33 $ 43.73 3.35Forage Harvester (Pickup Head) 12 Ft 105 HP MFWD $16,000 3.31 662 $3.99 $6.09 $5.87 $1.36 $1.37 $1.28 $ 19.97 $ 16.34 1.40Corn Head for SP Harvstr Base 6 Row,15 FtCorn Head for SP Harvstr Base 8 Row,20 FtPickup Head for SP Harvstr Base 12 Ft570 HP SP ForageHarvester Base Unit $65,000 5.09 1,018 $6.72 $37.91 $3.82 $1.02 $3.63 $3.20 $56.30 $ 38.18 2.35570 HP SP ForageHarvester Base Unit $84,000 6.79 1,358 $6.72 $28.43 $2.86 $0.99 $3.52 $3.06 $45.58 $ 31.33 2.35315 HP SP ForageHarvester Base Unit $16,000 4.07 326 $5.31 $32.07 $4.77 $0.13 $2.79 $2.93 $47.99 $ 32.36 1.86Pickup Head for SP Harvstr Base (2XWindrows) 24 Ft570 HP SP ForageHarvester Base Unit $16,000 8.15 652 $4.80 $23.69 $2.38 $0.06 $1.40 $1.46 $33.80 $ 23.01 1.68Combine Grain Head 20 Ft 275 HP Combine $22,000 6.79 1,358 $4.25 $19.00 $2.86 $0.38 $1.02 $0.76 $28.27 $ 22.20 1.49Combine Grain Head 30 Ft 275 HP Combine $29,000 10.18 2,036 $4.25 $12.67 $1.91 $0.33 $0.90 $0.67 $20.72 $ 16.51 1.49Combine Soybean Hd 18 Ft 275 HP Combine $24,000 5.35 1,069 $5.57 $24.13 $3.63 $0.52 $1.41 $1.07 $36.34 $ 28.52 1.95Combine Soybean Hd 25 Ft 275 HP Combine $26,000 7.42 1,485 $5.57 $17.37 $2.62 $0.41 $1.10 $0.83 $27.90 $ 22.21 1.95Combine Corn Hd 6 Row-30, 15 Ft 275 HP Combine $51,000 5.09 1,018 $5.37 $25.34 $3.82 $1.17 $3.15 $2.32 $41.16 $ 31.75 1.88Combine Corn Hd 8 Row-30, 20 Ft 275 HP Combine $51,000 6.79 1,358 $5.37 $19.00 $2.86 $0.87 $2.36 $1.76 $32.23 $ 25.15 1.88Combine Corn Hd 12 Row-30, 30 Ft 340 HP Combine $68,000 10.18 2,036 $5.37 $14.41 $1.91 $0.78 $2.10 $1.55 $26.11 $ 20.53 1.88Combine Belt Pickup Hd 12 Row-30, 23Ft 275 HP Combine $21,000 6.69 713 $5.17 $19.28 $2.90 $0.18 $1.79 $1.42 $30.74 $ 23.93 1.81Grain Cart 30 Ft 225 HP MFWD $44,000 6.87 1,375 $4.12 $7.58 $2.26 $1.76 $1.86 $1.49 $19.07 $ 14.57 1.44Bean Cutter 6 Row-1, 15 Ft 130 HP MFWD $14,000 8.73 698 $1.87 $3.29 $2.23 $0.35 $1.18 $1.02 $9.94 $ 7.65 0.66Bean Rod 6 Row-1, 15 Ft 130 HP MFWD $7,000 8.73 698 $1.87 $3.29 $2.23 $0.17 $0.59 $0.55 $8.71 $ 6.89 0.66Bean Windrower 6 Row-1, 15 Ft 130 HP MFWD $36,000 8.73 698 $1.87 $3.29 $2.23 $0.89 $3.04 $2.48 $13.80 $ 10.06 0.66Sugar Beet Lifter 6 Row, 11 Ft 160 HP MFWD $86,000 3.03 243 $6.35 $10.16 $6.40 $18.36 $20.91 $16.79 $78.97 $ 58.38 2.22Sugar Beet Lifter 8 Row, 14.7 Ft6 200 HP MFWD $101,000 4.05 324 $6.35 $9.80 $4.79 $16.13 $18.37 $14.70 $70.15 $ 51.79 2.22Sugar Beet Lifter (Higher Usage) 8 Row,14.7 Ft6 200 HP MFWD $101,000 4.05 1,013 $6.35 $9.80 $4.79 $14.98 $15.38 $5.87 $57.17 $ 47.64 2.22Sugar Beet Topper 8 Row, 14.7 Ft 75 HP $43,000 7.13 570 $1.61 $1.40 $2.46 $1.85 $4.45 $3.65 $15.41 $ 11.14 0.56Sugar Beet Topper 12 Row, 22 Ft 160 HP MFWD $51,000 10.67 853 $1.61 $2.89 $1.64 $1.46 $3.53 $2.95 $14.08 $ 10.04 0.56Sugar Beet Wagon 20 Ton, 11 Ft 200 HP MFWD $59,000 5.20 520 $5.14 $7.64 $2.69 $2.53 $6.58 $5.62 $30.19 $ 21.72 1.80Sugar Beet Wagon 24 Ton, 11 Ft 225 HP MFWD $67,000 5.20 520 $5.14 $10.02 $2.69 $2.87 $7.47 $6.33 $34.53 $ 24.22 1.80Detail Page 3

Tractor Net Cost - - Estimated - - Power Labor --Implement Cost/Acre-- Total Use-related DieselSize of A New Work Performed Cost Cost Deprec- Over- Cost Cost FuelImplement (HP) Implement 1 Acres/hr Acres/yr Per Acre 2 Per Acre Repairs iation Head 3 /Acre 4 /Acre 5 Gal/Acre1 Net cost of a new unit assumes no trade-in.Farm machinery is exempt from sales tax in Minnesota so no sales tax is included.2 Power cost per acre for the power unit assigned to each implement multiplied times that implement’s acres/hour equals that power unit’s total cost per hour shownin the “Tractors and Combines (Without Heads)” table above.3 Overhead per acre will vary with annual use.4 Total cost/acre is total cost per hour divided by acres per hour.Includes fuel, lubricants, power and equipment repairs and maintenance, labor, and overhead costsincluding depreciation.Fuel is included in power cost.5 Use-related cost/acre is included in the total cost/acre amount.Use-related cost/acre includes everything in total cost/acre EXCEPT that non-depreciation overheadcosts (interest, insurance, and housing) are omitted.Depreciation is included in use-related cost under the assumption that extra use reduces trade-in value whichincreases annual depreciation.In other words, depreciation is considered here to be at least partially use-related even though it is commonly thought of as beingmainly time-related.6 Cost data for the 8 row sugar beet lifter is calculated for two levels of annual usage, 80 and 250 hours. The 250 hours/year is intended to reflect a custom worksituation.At the higher usage, the machine is traded after 3 years with a trade-in value of 32% of list price.At the lower 80-hour usage level, it is traded at 12 yearswith a trade-in value 26% of list.8