Software streamlines equipment decisions

By D. Bruce Bosley

Extension Agent/Cropping Systems

Colorado State University Cooperative Extension

The constantly evolving world of agricultural machinery leaves many farmers struggling to keep up with the latest technology. Farmers may also find themselves in a pinch from time to time, needing to hire outside help to complete their work in a timely fashion. Long standing custom rates for certain operations can become dated with changing machinery values and input costs such as fuel and labor. Accurately accounting for the related ownership and operating costs is crucial when hiring and/or offering these services.

Colorado State University's Ag and Business management team has developed a computer software program which is designed to streamline the process of determining the cost of operating farm equipment. Ownership and operating costs are used to account for all machinery costs. Ownership costs are incurred whether or not a piece of machinery is in use. Storage, Depreciation, Interest, Insurance, and Taxes are examples of ownership costs. Operating costs however, are realized only when machinery is in use. Repair, Fuel & Lube, and Labor are examples of operating costs. Together, these values represent the costs of a given operation.

This tool can be useful to compare the costs of purchasing different farm equipment and switching to alternative farming strategies such as no-till or reduced-till.

The energy costs of using farm equipment are also included.. Energy use rates for farming operations frequently are measured in horsepower hours. A tractor disk combination with an average 100 hp at the drawbar for five hours delivers 500 hp-hrs of energy for the disking operation. Since it is not practical for farmers to measure drawbar horsepower, energy requirements normally are based on rated maximum power takeoff horsepower. Diesel tractors deliver an average of 13.0 PTO-hp-hrs/gal; gasoline, 9.0 hp-hrs/gal; and LP gas, 7.5 hp-hrs/gal. Example: a diesel tractor rated at 100 maximum PTO-hp operating at full load uses 7.69 gal/hr: 100 hp/13.0 hp-hrs/gal = 7.69 gal/hr. On the same basis, a 100 hp gasoline tractor uses 100/9.0 or 11.1 gal/hr, and an LP gas tractor, 100/7.5 or 13.3 gal/hr.

The calculations in this spreadsheet are based on the calculations used by the Profit and Loss (PAL) budgeting program developed by the Department of Agricultural and Resource Economics at Colorado State University in cooperation with USDA-ARS. CSU'S Agriculture and Business Management website for this and other useful farm management information is: www.coopext.colostate.edu/ABM/abmndx.html.

Please contact me with your cropping systems questions or natural resources questions: 970-522-3200, extension 285. Thank you!

Date:1/25/06