These custom rates are based on reported surveys in Ohio, Indiana, Missouri, Iowa, Wisconsin, and Kansas. The rates calculated here are averages for these states and are adjusted to account for changes in fuel price, machinery costs1, and wages2 from the time of the reported surveys. The adjusted rates are based on an expected $3.50 per gallon on-farm diesel fuel price for 2024. The "Average Final Rates" presented in this report represent these adjusted averages.
 
To account for differences in efficiency and market conditions, two additional rates are presented: 1) A rate of 15% below the "Average Final Rate", and 2) A rate of 30% above the "Average Final Rate". These two rates provide a range of rates that are likely to occur, based on the assumption that the more efficient operators were likely to have responded to the surveys. There is a practical limit on how much these rates can move below the average but less so moving in the other direction. Extending the range further above the average should capture more of the custom operators working with less-efficient equipment/conditions or working near urban areas with higher cost structures.
 
There are cases where adjusted rates could not be computed because estimates did not exist for fuel use or labor hours. Consequently, unadjusted rates are provided in these cases. These unadjusted rates should be used with caution because operating costs, particularly fuel-related, may have changed considerably since the time of these surveys. Average fuel prices are reported in these cases so that the user has some idea of how accurate the unadjusted rates may be.
 
Not all states reported rates for each activity listed, so an additional category lists the number of states used in each calculation. The larger the number of states used in each category, the more robust the final estimates presented here should be. The user should exercise caution in using rates where only 1-2 states were included in the calculation.
 
As a final note, these rates are published to provide a baseline for estimating reasonable custom machinery rates in Kentucky (as well as estimating production costs). Actual custom rates will be determined through the supply and demand for services within localized markets and can vary substantially. This is the main reason that a range of rates are presented here rather than a single dollar estimate. Users of this publication should be careful that these estimates, particularly the averages, are not used to set rates in an area.

Author(s) Contact Information: 

Greg Halich | greg.halich@uky.edu