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Farm ‘custom rates’ on the rise

By ED LENTZ
Farmers may hire someone else to complete some or all of the work that needs to be done. There are many reasons for hiring the work out: lack of special equipment, lack of expertise, lack of time, or lack of labor.
For example, a grain farmer may not raise livestock, so he no longer owns or has forage equipment, such as a rake or baler. He may hire someone else to bale straw from his wheat fields or harvest hay from forage fields.
Labor, equipment operation, or the service cost charged to the farmer is called “custom farm work” or “custom rates.”
The Ohio State University Extension completes and publishes a survey every two years that provides recent custom rates in Ohio.
These custom rates include all aspects of farming, such as land preparation, planting, and harvesting. The survey is completed by those who hire custom farm work and those who perform the work, such as farmers, farm managers, landowners, and farm equipment operators.
Survey results are used by farmers and agricultural professionals to understand market rates. The survey is often used to negotiate a farming rate for labor or activity.
The recent survey shows rates in Ohio are rising, as well as the cost for custom farm services. The increase in supply costs, and the boom that occurred in agriculture during the past five years, may account for these increases.
Inflation may also be attributed to the increase in equipment, fuel, and other supplies. Regardless of the cause, custom rates have been going up each year.
The 2014 survey had 256 participants, 122 more participants than 2012. Custom services that had a significant increase on average compared to 2012 included:
• Soil preparation and tillage operations: 9.9 percent increase.
• Planting operations: 10.4 percent increase.
• Harvesting operations: 10.5 percent increase.
• Ground fertilizer application: 10.9 percent increase.
• Hay/straw harvest: 15.4 percent increase.
The survey is administered through Ohio State’s farm management program. The program also has enterprise budgets for major crops and livestock, and information on farmland rates and lease agreements.
The full survey results and the 2014 Ohio Farm Custom Rates may be found at: http://aede.osu.edu/sites/aede/files/publication_files/Ohio%20Farm%20Custom%20Rates%202014_0.pdf.
A printed copy may also be obtained at the OSU Extension Hancock County office.
Lentz is extension educator for agriculture and natural resources for The Ohio State University Extension Service in Hancock County. He can be reached at 419-422-3851 or via email at lentz.38@osu.edu.
Lentz can be heard with Vaun Wickerham on weekdays at 6:35 a.m. on WFIN, at 5:43 a.m. on WKXA-FM, and at 5:28 a.m. at 106.3 The Fox.

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