MSU Extension Farm Management

The MSU Custom Rate Calculator Tool spreadsheet can guide the calculation of the total economic cost of owning and operating the machinery for custom hire services. Ownership costs for both the tractor and equipment include depreciation, interest, repairs, taxes, and insurance. Operating costs include fuel and labor.

The custom rate total cost is calculated from parameters on the 'Input' worksheet. The itemized total cost can be found on the 'Output' worksheet. This total cost value should be evaluated and adjusted for market factors and risk in order to determine the appropriate custom rate for your operation. There are also manual options that allow direct entry of all the values. Please note that the Input page is linked to the Output page, but there are no links between those pages and the Manual version of the tool.                                              

The result can be adjusted for local economic conditions, such as the availability of machinery services and demand for machinery services in your local area or usual rates set in the community. Other factors can include field size and shape; ease of access; amount of non-farm traffic to get to the field; machine size and road or bridge widths; trash in the field; weed history; trees or brush hindering work; depth and amount of field drainage tile; and payment arrangements.