The Agricultural Budget Calculator (ABC) Program is a resource to figure machinery field operation and ownership costs. Many producers and/or custom operators utilize these figures in making decisions on machinery and equipment upgrades and how a change might affect their cost of production. In the case of custom operations, figuring field operation costs is important in figuring their rates and what to charge for their services. This article provides a couple of examples of field operation cost calculations that can be generated from the ABC program. The examples include a look at field operation costs for newer equipment (power unit and implement) that is three years or less in age, versus slightly older equipment of similar size and power. The examples used are to determine costs for planting row crops.
Information necessary to be inputted into the ABC to run these calculations is illustrated in figures 2 and 4 for each example.
Examples provided are estimated costs for a newer model tractor (2019) and planter (2022) and then slightly older models of equipment, a 2014 tractor with a 2015 model planter. Information entered into the ABC program to figure operation and ownership costs for the power units include purchase and list prices, power unit size, fuel efficiency, and estimated hours of usage per year. Similar figures are needed to figure the implement costs except for fuel efficiency and hours of usage, instead, implement coverage rate (acres covered per hour of usage) is needed. The American Society of Agricultural and Biological Engineers standard formulas are programmed into ABC to assist with calculating salvage value, repairs, and estimating fuel usage.
For demonstration or example purposes, Figure 2 provides information for a 1 – 2-year-old tractor with 1,000 tach hours when purchased and a 3-year-old planter. Figure 4 provides calculations for an 8-year-old tractor with 3,000 tach hours when purchased, and a 7-year-old planter. In both cases, salvage value is figured (estimated) after just one year of ownership. Coverage rate of 15.5 acres per hour remains the same in both field operation examples. A labor rate of $25 per hour with a labor factor of 1.1 was used in the field operation cost calculations. Cost factors for individual farm operations will vary.
For more information on creating an account and for further instructions on using the free online Agricultural Budget Calculator, go to: cap.unl.edu/abc.
Figure 1. Planting Example Using Newer Model Tractor & Planter
Figure 2. Newer Model Tractor and Planter Example - Operating and Ownership Cost Summary from ABC Program
Figure 3. Planting Example Using Older Model Tractor & Planter
Figure 4. Older Model Tractor and Planter Example - Operating and Ownership Cost Summary from ABC Program
Figuring Field Operation Costs Using an Excel Worksheet
Field operation calculations can also be run using other programs or methods. Similar power unit and equipment prices /costs and factors for both the newer and older equipment examples were inputted into an Excel spreadsheet. While some may not have access to the Microsoft Excel program software, the ABC program is a cloud based, online program accessible by anyone. Therefore we provided the examples using the two different resources. The main difference in the field operation cost figures (bottom line) for both examples is that personal property taxes, housing, and insurance costs on the equipment are included in the Excel worksheet while in the ABC program, these costs are entered separately as overhead costs and don’t appear on the field operation summary reports.
Newer equipment model - field operation cost calculation example: Excel file
Older equipment model – field operation cost calculation example: Excel file