7T:-il AGRICULTURAL ECONOMICS MAY 1964 SERIES 4 i' C CUSTOM RATES In Alabama AGRICULTURAL EXPERIMENT STATION OF AUBURN UNIVERSITY E. V. Smtih, Director Auburn, Alabama ~~i~p~Sp 8~ri FARM MACHINERY CUSTOM RATES IN ALABAMA - 1963 Page Introduction .. ,. . ... . .. . .... Typical Custom Rates Paid or Charged, Alabama ... ".e"" Custom Rates Paid or Charged for Major Farm Operations, by Geographic Areas, Alabama, 1 963: Breaking land (Bottom or Disk Plow) . Harrowing land (Disk Harrow) . .... Harrowing land (Spike Tooth Harrow). Application of liquid nitrogen . . . Spreading fertilizer. . . . . . . Spreading lime or basic slag . . . . Planting row crops (Two-row Equipment) Planting row crops (Four- row Equipment)' Rotary hoeing row crops . . . . a * * Cultivating or cultivating and ferti liz, " 0 9 0 9" 0 " f A " " " 0" 0b 0" 0 9 ing row f " crops r(0F" 5:s I" Planting small grain . " . . " . *.*"*.*e*.*.*.*" Mowing hay .. * . . . .* ** 0 0 Raking hay . .0 .0. e .00 Bating hay . . * . . . . * 0 0 *.*.*.*.*.9.*. Raking and baling hay . . . . * . * * . . . . . , Mowing, raking, and baling hay 0 "* . " ,*. . Corn picking . .* . ,0.0. " . .0.0 .0 0 .0 Corn picking and shelling 0.*.0. * * . . 0.9.* .* Combining small grains .*00 .** . . . Combining legume seed*. . " 000*000 Digging peanuts . . . . 0 . 0 0 .0.0.0.0.0.0.0.*. Shaking peanuts . .0 . 0 0 . 0 0 0 0.0.0.0.0.0.0 Digging and shakingpeanuts . 0 0* Combining or picking peanuts ** "00* . . . Cutting or shredding stalks . .*"0. Clipping or mowing pastures (Cycle or Rotary Mower) Dusting for insect and disease control .*. .0.*.0 Spraying for insect and disease control . . . 0 0 0 Spraying pecans for insect and disease control .* Spraying pastures for weed control . . 0 * 0 0 0 0 Digging post holes *. . 0.0.0.0.9. 0 0 0 * .*.0.0 Bulldozing .0.0.0.0f .*.0 . . 0. .. 0.*. .0.0f0.0.0 Anticipated Changes in Custom Rates from 1963 to 1964 Appendix: Custom hiring vs. machine ownership . . 00.0.0.0. Costs of machine ownership compared with custom rates 0 1 " S e " " 1 " 0 rr IS III 9 10 11 11 12 13 14 15 15 16 17 18 19 20 21 22 23 24 25 26 27 27 28 28 29 30 31 32 32 33 34 35 36" 0 0 0 " " 0 " 0 0 0 0 38 39 FARM MACHINERY CUSTOM RATES IN ALABAMA, 1963* Tom D. Nolen** Assistant in Agricultural Economics Custom work may be defined as the hiring of men with machines for performance of a specified machine task. The custom rate must cover the machinery cost, labor furnished, and materials that may be supplied by the custom operator. The cost of materials such as dusts or seed generally is not included. Custom work is normally provided by those who own and operate specialized machines or equipment as a business, or by farmers who have excess machine capacity and labor on their own farms. Custom operations are performed on Alabama farms for a variety of reasons. Machine ownership costs are eliminated by the one who hires the custom operator. Capital can be invested in other enterprises. Skilled labor can be hired along with the use of the machine. Individual operators who hire custom work may avoid the risks of obsolescence of equipment as a result of new engineering developments and market conditions. There are often certain advantages to the custom operator. Custom work may provide an additional source of income. It may help to lower *This study was supported by State Research funds. **The author acknowledges the cooperation and assistance of the Auburn University Cooperative Extension Service Personnel and the sample of Alabama farm operators from whom basic data were obtained. Special acknowledgment is due J. T. Gaillard, Extension Specialist in Farm Mechanization, for assistance in planning and expediting the survey phases of the study. -1 - per unit machinery costs for the custom operator by providing more acres or units of machine use. Hiring custom work may have some disadvantages. Service may not be available when the job should be performed. The quality and quantity of the custom work available may be low. In some cases, annual costs of hiring custom work may be higher than ownership costs for the machine. Noxious plants and diseases may be spread. Also, in some cases, the farmer hiring custom work may not have alternative uses or he may have limited uses for labor that may be released. During the fall of 1963, a survey was conducted to determine the custom rates being paid or charged for major farm operations in Alabama. Results of this survey provided information on rates that were paid or charged in 1963. Questionnaires were mailed to 10 farmers in each county in the State who hired or performed the largest volume and variety of custom work. Names of these farmers were supplied by county agents. A total of 374 usable questionnaires were returned. Within an area, size of equipment used in most cases did not appear to influence custom rates. However, between areas there were differ- ences in custom rates according to size of equipment used. These differ- ences can be explained by differences in soil types, type and size of machinery required to do the job, and size of fields. Typical custom rates paid or charged for major farm operations in Alabama in 1963 are given in Table 1. Also given are the ranges in rates charged for these operations. The most common rate was the one reported most often. The usual range was based on lowest and highest 3 rate reported provided more than one farmer or custom operator reported this rate. In some cases, custom rates are given in the State table but not in the area tables. In these cases, there were insufficient data to determine differences between geographic areas. Variations existed in custom rates between geographic areas of the State. The State was divided into seven areas in order to detect differ- ences. Figure 1 indicates area boundaries and names assigned to the seven areas. Custom rate data, as reported for these areas, are given by major farm operations for 1963 in Tables 2 through 33. The number of returned questionnaires used in this report is also shown by counties in Figure 1. Since 1951, custom rates have not shown substantial changes. There has been a tendency for the traditional charge to prevail. How- ever, certain rates have shown evidence of change since the first custom rate data were assembled for Alabama in 1951 as shown below: Custom operation : Unit : 1951 : 1958 : 1963 : Dol. Dol. Dol. Breaking land------------; Per acre : 4.00 3.00 4.00 Planting row crops--------: Per acre : 2.50 2.00 2.00 Cultivating row crops-----: Per acre : 2.00 1.50 2.00 Baling hay---------------: Per bale : .15 .20 .15 Combining small grains-..--: Per acre : 10.00 6.00 6.00 Combining legume seed-----: Per acre : 10.00 6.00 8.00 Corn picking-------------: Per acre : 5.00 6.00 6.00 4 Farm operators included in the 1963 survey were asked to indicate the expected change in custom rates paid or charged for 1964. Replies were in the following terms: "expected increase," "expected decrease," or "no change in rates." A summary of these replies by major geographic areas of the State is shown in Table 34. Tennessee Valley Upper Coastal Plains Black Belt - Southwestern Coastal Plains Sand Mountain Piedmont Wiregrass Figure 1. Number of Custom Rate Questionnaires Returned and Used, by Counties and Geographic Areas, 1963 6 for Major Farm Operations, Table 1. Typical Custom RatesPi rCagd Alabama, 1963 1/ Operation Unit Breaking land------- Per acre Breaking land--------------- Per hour Harrowing land: Disk harrow------------ *?Per acre Disk harrow ----------- - Per hour Spike-tooth harrow----------? Per acre Spreading lime or basic slag: Tractor spreader -------- Per acre Truck spreader --------- Per ton Spreading fertilizer: Tractor spreader"--------___ Per acre Truck spreader---------- Per ton Applying liquid nitrogen---- Per acre Applying anhydrous ammonia-- Per pound Applying anhydrous ammonia------w Per acre Planting row crops: Two-row equipment ---------- : Per acre Two-row equipment-----------~ Per hour Four-row equipment------ Per acre Rotary hoeing row crp----- Per acre Cultivating, or cultivating and: fertilizing row crps----- Per acre Cultivating. or cultivating and Most rate :Dollars * 4.00 * 4.00 * 2.00 " 4.00 * 100 * 2.00 . 3.00 o" * 1.00 :or 2.00 3.00 " 1.00 * .04 1.00 2.00 " 4.00 2.00 " 1.00 2.00 " 4.00 * 20 Rate Usual range in rates Dollars 2.00 - 6,00 2.00 - 6.00 1 .00 2.*00 1 *00 4.00 6.00 1 .50 .50 - 2.00 1 .50 -4.50 .50 - 1.50 .50 .03 1.00 1.50 3.00 1.50 .50 2.00 5.00 4.00 .04 3.00 3.50 6.00 3.00 2.00 1.00 3.00 3.00 1.00 6.00 3.00 2.00 1 .00 - 3.00 Co nnuedTonext page Table 1. (Continued) Typical Custom Rates Paid or Charged, for Major Farm Operations, Alabama, 1963 1/ Operation Unit Most Usual range common i :tA Mowi ng hay-mom do Per acre Mowing hayPerhour Raking hay-- Per acre Raking hay Per bae Baling hay__-_r___ 3 Per bale Baling hay-r Per ton Raking and baling hay--Perbale Mowing, raking, and baling hay_-- ? Per bale Silage cutting (without hauling).: Per acre Silage cutting (without hauling).. Per hour Corn pi cki ng_____I Per acre Corn picking---------------------Per bushel Corn picking and shelling....--....Per acre Corn picking and shelling.........- ?Per bushel Combining small grain------ m------- Per acre Combining small grain--............Share Combining legume seed............Per acre Combining legume seed.............Share Digging and shaking peanuts--......Per acre Digging peanut s................... ?Per acre rat :Dollars * 2.00 a? aw " 4.00 ai " 100 a" * .05 .15 6.00 ? .20 .25 a" ? 10.00 10.00 ai 6.00 a" "15 : 10.00 .20 aa 6.00 1/4 a? a? 8.00 1 /2 : 3.00 2 2.0 . (Continued on next page) I II f a t.CJ Im DollJars 1.00 - 4.00 2.50 - 6.00 1.00 - 2.00 .02 - .10 .10 - .25 5.00 - 8.00 .15 - .30 .20 - *140 5.00 - 12.00 5.00 -10.00 5.00 - 10.00 .10 - .25 6.00 -10.00 .15 - .25 2.00 -10.00 1/6 - 1/2 2.00 -10.00 1 /6 - 1/2 2.00 -5.00 1.e50 - 2.00 Table 1 . (Continued) Typical Custom Rates Paid or Charged, for Major Farm Operations, Alabama, 1963 Y/ ate Usual rang Operation* Unit Shaking peanuts--------------Per acre Combining or picking peanuts-------Per ton Combining or picking peanuts-----: Per acre Mechanical picking of cotton-----a Per lb., Cutting or shredding stalks----;-Per acre Cutting or shredding stalks----- Per hour Clipping or mowing pastures------ Per acre Clipping or mowing pastures----- Per hour Dusting for insect and disease control: Tractor duster-------------o Per acre Airplane--------------------.. Per pound Spraying for insect and disease : control-----------------Per acre Spraying pecans for insect and disease control (includes materials)-----------Per tree Spraying pastures for weed control..------.__-------------4 Per acre Digging post hls------- Per hole Bulldozing: D-6 or TD 14-----------. Per hour D-7 or TD18-------c Per hour common WAN to rate :Dol lars a 2.00 o" : 20.00 : 15.00 lint : .06 : 2.00 4.00 : 2.00 4.0 1.00 ? 1.00 1.00 10.10 or15.00 ---- ---- --- -- a ? 0 o" .1 rlrrrrrrrrla It~rr12.50 125 or150 2.50 .15 10.00 - 15.00 10.00 - 20.00 i/ Tables 2 through 33 present custom rates and explanations that pertain to custom operations for geographic areas of the State. m in rates Dol ars 1.00 - 2.00 20.00 - 25.00 10.00 - 15.00 .o6 - .07 1 .00 - 3.00 3.00 - 5.00 .50 - 4.00 2.50 -7.00 .50 - 2.00 .05 - .05 .50 - 2.00 1.00 -1.00 .50 - *05 .. 9 Table 2. Breaking Land (Bottom or Disk Plow): Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ " Custom rates paid or charged Geographic " area Per acre Per hour Most ; Usual range, Most ; Usual range ;common rate: in rates . common rate ; in rates : Dollars Dollars Dollars Dollars Tennessee Valley-----: 4.00 3.00 - 4.50 3/ 3/ Sand Mountain---------: 4.00 3.00 - 5.00 3.50 3.00-5.00 Piedmont-------------: 4.00 3.00 - 6.00 4.00 3.00 - 6.00 Upper Coastal Plains-: 4.00 3.00 - 4.00 4.00 2.00 4.00 Black Belt-----------: 4.00 2.00 - 6.00 3.00 3.00 - 4.00 Southwestern Coastal Pltai ns------------: 3.00 3.00 - 4.00 3.00 3.00 - 4.00 Wi regrass----------: 3.00 2.00 - 4.00 3/ 3/ STATE: 4.00 2.00 ,- 6. 00 4.00 2.00 - 6.00 1/ Items furnished by the custom operator included power, plow, and operator . 2/ Within areas, it did not appear that size of equipment influ- enced the custom rate per acre. 3/ No report or inadequate sample. 10 Table 3. Hi ri jn~ nd(Disk Harrow): Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1 Custom rates paid or charged 2/ Geographic area ic Per acre Per hour Most : Usual range; Most Usual range common rate in rates common rate: in rates : Dollars Dollars Dollars Dollars Tennessee Valley-----: 2.00 1.00 - 2.00 3/ Sand Mountain-------: 3.00 it 1.50 - 3.00 3.501/ 3.00-5.00 Piedmont---------------2.00 2.00 - 3.00 4.00 3.00 - 6,00 Upper Coastal Plains-: 2.00 1.50 - 3.00 3.00 3.00 - 5.00 Black Belt-----------: 3.00 1.50 - 4.00 3.50 2.00 - 4.50 Southwestern Coastal Pl1ains-------2.00 1.50 - 3.00 3.00 3.00 - 4.00 Wi regrass-----._ft----------150 1 .00 - 2.00 3/ 3/ STATE--------'--: 2.00 1.00 - 4.00 4.00 2.00 - 6.00 1/ Items furnished by the custom operator included power, harrow, and operator. 2/ Within areas, it did not appear that size of equipment influenced custom rate per acre. 3/ No report or inadequate sample. An equal number reported $2 per acre. 5/ An equal number reported $5 per hour. i1 Table 4. Harrowing Land (Spike Tooth Harrow): Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Geographic Custom rates paid or charged per acre 3/ area 2/: " Usual range in * Most ccnmon rate * Dollars Dollars Tennessee Valley-- --- : 1.50 1.50 - 1.50 Black B 1.00 100 1.00 Wiregrass-1 *50 1 .00 1010 1.50 T100 1900 1.50 1Items furnished by the custom operator included power, harrow, and operator. 2/ For geographic areas not shown, there were no reports or sample was inadequate. 3/ Within areas, it did not appear that size of equipment influenced the custom rate per acre. Table 5. Cusl of Liquid Ni troqen Charged, by Geographic Areas, Alabama, Custom Rates Paid or 1963 2 * Custom rates paid or charged per acre 3/ Geographic area 2/ sa ag :Mostcommon rate rates * Dollars Dollars Black Bet-a .a .e o__.1.00 1.00 - 100 Southwestern Coastal ? Plains - --------.-- 1.00 1.00 . 1.00 Wiregrass---------------.1.00 1.00 - 1.00 TAE--_._ _._.01.00 0.50 4.00 1/ Items furnished by the person doing the operation included power, applicator, and operator. Materials were furnished by the person hiring the operation performed. 2/ For geographic areas not shown, sample was inadequate. 3/ This range includes data for all areas of the State although responses in four areas were inadequate to report area figures. 12 Table 6. Spreading Fertilizer: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ * Custom rates paid or charged Geographic Per acre, Per ton, area tractor spreader/ : truck spreader Most . Usual range: Most Usual range common rate: in rates common rate in rates : Dollars Dollars Dollars Dollars Tennessee Valley-----: 2.00 1.00 - 2.00 2.50 1.50- 2.50 Sand Mountain-------- 3/ 3/ 4/ 1.50 - 4.00 Piedmont-------------: 3/ 3/ 4/ 2.00 - 4.00 Upper Coastal Plains-: 1.50 1.00 - 1.50 4.00 2.00 - 4.00 Black Belt------- 1.50 1.50 - 1.50 3.50 3.00 - 5.00 Southwestern Coastal : Plains------------: 1.00 1.00 - 2.00 4.00 4.00 - 4.00 Wiregrass------------: 1.00 .50 - 2.00 3.00 3.00 - 5.00 STATE-----------: 5/ 0.50 - 2.00 3.00 1.50 - 5.00 1/ Items furnished by the custom operator included power, spreader, and operator. Materials were furnished by the person hiring the opera- tion performed. 2/ For tractor spreaders, the most common rate per hour was as follows: $4 in the Sand Mountain Area; $4 in the Piedmont; $3 in the Upper Coastal Plains; $3 in the Southwestern Coastal Plains. For truck spreaders, the most common rate per acre was $2 in the Southwestern Coastal Plains. 3/ No report or inadequate sample. 4/ No rate most common. 5/ An equal number reported $1 and $2 per acre. 13 Table 7. Spreading Lime or Basic Slag: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged Geographic Per acre, Per ton, area tractor spreader truck spreader Most : Usual range. Most . Usual range .common rate . in rates : common rate. in rates : Dollars Dollars Dollars Dollars Tennessee Valley-----: 2.00 2.00 - 2.00 2.00 1.50 - 2.50 Sand Mountain--------: 3/ 3/ 3.00 4/ 2.00 - 4.00 Piedmont------------: 3/ 3/ 3/ 3/ Upper Coastal Plains-: 3/ 3/ 4.00 2.00 - 4.00 Black Belt----------: 5/ .50- 2.00 3.00 2.00- 3.50 Southwestern Coastal : Plains------------: 1.00 1.00 - 2.00 5/ 2.00 - 4.50 Wiregrass------------: 1.00 1.00 - 2.00 3.00 1.50 - 4.50 STATE-----------: 2.00 0.50 - 2.00 3.00 1.50 - 4.50 1/ Items furnished by the custom operator included power, spreader, and operator. Material was furnished by the person hiring the opera- tion performed. 2/ For truck spreaders, the most common rate per acre was $2 in the Southwestern Coastal Plains. For tractor spreaders, the most common rate was $2 per ton in the Tennessee Valley; in the Piedmont Area it was $4 per hour. 3/ No report or inadequate sample. /An equal number reported $3.50 per ton. 5/No rate most common. 14 Table 8. Planting Row Crops (Two-Row Equipment: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 Custom rates paid or charged Per acre : Per hour Most Usual range: Most Usual range ;common rate, in rates common rate in rates " Dollars Dollars Dollars Dollars Tennessee Valley---__: 2.00 2.00 - 3.00 2/ 2/ Sand Mountain--------: 2.00 2.00 - 3.00 3.50 3.50 - 5.00 Pieont-------------00 3.50 - 6.00 Upper Coastal Plains-: 2.00 2.00 - 2.00 3.50 3.00 - 3.50 Black 3.00 1.o50 - 3.00 4.00 4.00 - 4.00 Southwestern Coastal Plains------ -----_: 2.00 2.00 - 2.00 3.00 3.00 - 3.00 Wi regrass-----------:_t 2.00 1.50 - 3.50 2/ 2/ STATE--------------2.00 1.50 - 3.50 4.00 3.00 - 6.00 1/ Items furnished by the custom operator included power, planters, and operator . 2/ No report or inadequate sample. 15 Table 9. Planting Row Crops (Four-Row Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 / e Custom rates paid or charged per acre Geographic area 2i * Most common rate Usual range rates ?" D~folltarsDolr Tennessee Valley-..-_..__. 2.00 1.50-2.00 Black Belt--------------- 3.00 3.00 - 3.00 ? Southwestern Coastal Plains - ----. ' 2.00 1.50 2.00 ? STATE_"* m 2.00 1.*50 3.00 1/ Items furnished by custom operator included power, planters, and operator. 2/ For geographic areas not shown there was no report or sample was inadequate for four-row equipment. Table 10. Rotary Hoeing Row Crops: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Geographic Custom rates paid or charged per acre 3/ area 2 Most common rate : Usual range in 0~rates Dollars Dollars Tennessee Valley--------t--:1.50 1.00 - 2.00 Sand Mountain...__.._.--. 2.00 1.50- 2.00 hoe, and operator. 2/ For geographic areas not shown, there was no report or sample was inadequate. 3/ Within areas, it did not appear that size of equipment influenced the custom rate per acre. 16 Table 11. Cultivating or Cultivating and Fertilizing RowrCrops: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged Geographic area . Per acre Per hour area Most : Usual range. Most Usual range ,common rate. in rates common rate " in rates " Dollars Dollars Dollars Dollars Tennessee Valley----: 2.00 1.00 - 2.00 3/ 3/ Sand Mountain---_w---: 2.00 2.00 - 2.50 4.00 3.50 5.00 Piedmont---, .---: 3/ 3/ 4.00 3.00 6.00 Upper Coastal Plains-: 2.00 4/ 1.00 - 2.00 4.00 3.00 4.00 Black Belt ---------- : 2.00 1.00 - 3.00 3/3/ Southwestern Coastal la -----. _--_ 2.00 5/ 1.00 - 2.00 3/ 3/ Wiregrass----------- ... : 1.50 1.00 2.00 3/ 3/ STATE -_-__--.____ : 2.00 1.00 3.00 4.00 3.00 6.00 1/ Items furnished by the custom operator included power, cult"- vator s, fertilizer attachment, and operator. 2/ Within areas, it did not appear that size of equipment influ- enced the custom rate per acre. 3/ No report or inadequate sample.. 7~/ An equal number reported $1 . 5/ An equal number reported $1 .50. Planting Sm~all Grain: Custom Rates Paid Geographic Areas,Aa1l bama, 1963 1 or Charged, by Custom rates paid or charged per acre 2/ Geographic' area Usual range in Most common rater Dollars Dollars Tennessee Valley---------.-. 2.00 1.50 - 3.00 Sand Mountain--s 2.00 1.50 - 2.50 Piedmont 3/ 3/ Upper Coastal P ains-----.-_-. 1.50 1.50 - 1.50 Black Bel1t-..MM .501.50 2.00 Southwestern Coastal Pains- - - - - 2.00 1.*00 - 2.50 Wi regrass---"--_-_-. - 2.004/1.*00- 3.00 STATE----...--d_..-.--.-.". 2.00 1.00 - 3.00 1/ Items furnished by the custom operator included power, grain drill, and operator. 2/ Within areas, it did not appear that size of equipment influenced the custom rate per acre. The most common rate per hour was as follows: $5 in the Piedmont, and $3 in the Upper Coastal Plains. 3/ No report or inadequate sample. 4/ An equal number reported $1. Table 12. 17 18 Table 13. Mowing Hay: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged 2/ Geographic area a Per acre Per hour Most Usual range Most Usual range :common rate in rates common rate; in rates Dollars Dollars Dollars Dollars Tennessee Valley-----: 2.00 1.00 - 3.00 3/ Sand Mount ai ... _,.. 2.00 1.50 - 3.00 4.00 3.00-6.00 Piedmont -_-..--------: 2.00 2.00 - 3.00 4.00 3.00-6.00 Upper Coastal Plains .: 2.00 2.00 - 4.00 3/ 3/ Black Belt-- ------. : 1.50 1.00 1.50 3/ 3/ Southwestern Coastal - 2.00 2.00- 3.00 4.00 2.50 - 5.00 Wi regrass..------- : 2.00 1.*50 - 2.00 3/ 3/ STATE-.------: 2.00 1.00 - 4.00 4.00 2.50 6.00 l/ Items furnished by the custom operator included power, cycle mower, and operator. 2/ Within areas, it did not appear that size of equipment influenced the custom rate per acre. In some areas, custom rates were reported on a per bale basis. On this basis, the most common rate for the State was 5 cents per bale. 3/ No report or inadequate sample. 19 Table 14. Raking Hay: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 l/ Custom rates paid or charged 2/ Geographic area , Per acre Prbl area ? Most Usual range: Most Usual range :common rate : in rates common rate in rates Dollars Dollars Dollars Dollars Tennessee Valley- --4 1.50 1.00 - 2.00 0.05 0.02-0.05 Sand Mountain-------" 1.00 1.00 - 1.00 .05 .02 - .05 Piediont ---------- : 3/ .05 .05-.10 Upper Coastal Plainsf: 1.00 1.00 - 1.00 .05 .05 - .05 Black Belt-N--------_-: 4/ 1.00 - 1.50 .05 .02 .05 Southwestern Coastal Plains----..------: 1.00 1.00 1.50 .05 .05 - .10 Wi regrass----~-: 1.50 1.00 2.00 3/ 3/ STATE----M----: 1.00 1.00- 2.00 0.05 0.02 0.10 1/ Items furnished by the custom operator included power, equip- ment, and labor. 2/ Within areas, it did not appear that size of equipment influ- enced custom rate. In some areas, custom rates were reported on a per- hour basis. On this basis the most common rate for the State was $3 per hour. 3/ No report or inadequate sample. 2/ No rate most common. 20 Table 15. Baling Hay: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged Geographic per bale Per ton area * 9 Most :Usual range. Most Usual range ,common rate: in rates common rate: in rates : Dollars Dollars Dollars Dollars Tennessee Valley- -- 0 0.15 0.15 " 0.20 2/ Sand Mountin--------= .20 .15 - .25 2/ 2/ Pi edmont .20 .15 - .25 2/ 2/ Upper Coastal Plains-* .15 .15- .25 -6.00 6.00 - 6.00 Black Bel t .----. w.--.-: ..b 15 . .16 6.00 5.00 - 8.00 Southwestern Coastal Plisf._.o.__ .15 .15 .25 2/ 2/ Wi regrass--".---.__-..: .15 .10 .20 2/ 2/ S T A T E --- 0.15 0.10 0.25 6. 00 5.00 8."00 1/ Items furnished by the custom operator twine or wire, and labor. Hauling was done by operation performed. 2/ No report or inadequate sample. included power, equipment, the person hiring the 21 Table 16. Raki ng and Bal inq Hay: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged per bale / Geographic area Most common rate Usual range in rates SDollarsDolr Tennessee Valey _...____,._ 0.20 0.15-0.25 Sand Mountain-------------- .25 .20 - .30 Pie2dmont--------------5 .20 -- .30 Upper Coastal Plains-------o .25 .20 - .25 Black Belt-_ __--------------. .20 .15 - .20 Southwestern Coastal .lis-_.s _. 25 .18 _.25 Wi regrass ------- __- -- .20 .15 - .25 STATE __.. ------ :0.20 0.15 - 0.30 1/ Items furnished by the custom operator included power, equipment, wire or twine, and labor. Hauling was done by the person hiring the operation performed. 2/ In some areas, rates were reported on a per-ton basis. On this basis, the usual range i n rates for the State was $6 to $10 per ton. 22 Table 17. Mowing, R akinn dBal 1nc pia Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Geographic : Custom rates paid or charged per bale 2/ area Most common rate Usual range in rates Dollars Dollars Tennessee Valley- - 0.25 0.25-0.35 Sand 3.untain-25- .35Ng .... _ .30 Piedmont-------------- C--- .30 .25 " *40 Upper Coastal Plains W----. .30 .25 .35 Black Bel .25 .20 .30 Southwestern Coastal Plains------------- - .25.25- 30 Wi regrass--------------.25 3/.20 -. 30 STATE-----------------._ 0.25 0.20 - 0.40 1/ Items furnished by the custom operator included power, equipment, wire or twine, and labor. Hauling was done by the person hiring the operation performed. 2/ In some areas, rates were reported on a per-ton basis. The most common rate per ton was as follows: $10 in the Upper Coastal Plains, $10 in the Black Belt, and $8 in the Wiregrass. 3/ An equal number reported 20 cents. 23 Table 18. :.Corn.Pickin: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged 2/ Geographic ? Per acre Per bushel areaa Most :Usual range: Most Usual range ,common rate: in rates common rate in rates Dollars Dollars Dollars Dollars Tennessee Va 6ey--O-: 6.00 5.00 - 8.00 0.15 0.10 - 0.15 Sand Mountin-----AW 6.00 6.00 - 7.00 .15 .15 - .20 Piedmont _-.___- -- : 6.00 6.00 -7.00 .15 .10 -. 25 Upper Coastal Plains- : 5.00 5.00 -10.00 .15 .15 - .25 Black Belt-----------: 8.00 5.00 - 9.00 3/ 3/ Southwestern Coastal Plains------- -:_ 6.00 M 5.00 8.00 3/ Wiregrass.---------: .... w ; 5.00 5.00- 7.00 3/ 3/ STATE........ : _0 6.00 5.00 - 10.00 0.15 0.10 - 0.25 l/ Items furnished by the custom operator included power, picking equipment, and operator. Hauling was done by the person hiring the operation performed. 2/ Within areas, it did not appear that size of equipment influenced the custom rate per acre. 3/ No report or inadequate sample. l/An equal niumrber reported $7. 24 Table 19. Corn Pickin ad Shellinq: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged 2/ Geographic Per aPer area acre Most a Usual range. Most ange :common rate: in rates common rate?in rates Dollars Dollars Dollars Dollars Tennessee alley---M-: 8.00 6.00 -10.00 0.20 0.15w0.25 Sand MountainW-- ----: 3/ 3/ .25 .15 - .25 Upper Coastal Plains-:o 3/ 3/ .20 .20 - .25 Southwestern Coastal PlisW.,.e.__*. 10.00 7.00 -10.00 3// Wi regrass -a..__-..M..: 10.00 7.00 -10.00 3/ 3/ 2W00STATE--..-: 10.00 6.00 -10.00 0.20 0.15 - 0.25 1/ Items furnished by the custom operator included power, picker- she l ler, or combine, and labor. Hauling in some instances was done 1 the custom operator. 2/ In the Wiregrass area, custom rates paid or charged for corn picking and shelling were also reported on a per-ton basis. On this basis, the most common rate was $10 per ton. 3/ No report or inadequate sample. by 25 Table 20. Combining Small1 Grains: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ Custom rates paid or charged Geographic? Per acre Share basis area - a o Most Usual range; Most Usual range .common rate in rates common rate in rates Dollars Dollars Dollars Dollars Tennessee Valley-----: 6.00 2.00 - 8.00 1/4 1/6 - 1/3 Sand Mountain-------- --3/ 5.00 -10.00 1/4 1/4 - 1/4 Piedmont-----------------6.00 Li 3.50 -10.00 1/4 1/L - 1/L Upper Coastal Plains-: 6.00 6.00 0.00 1/2 1/4 - 1/2 Black Belt----------- 8.00 6.00 -10.00 1/2 1/ 1/2 Southwestern Coastal Plains-_----------: 6.00 6.00 - 7.00 5/ 5/ Wiregrass---- --------- 6.00 6/ 5.00 -10.00 5 STATE--------6.00 2.00 -10.00 1/Li 1/6- 1/2 l/ Items furnished by the custom operator included power, combin- ing equipment, and combining labor. Hauling was furnished by the person hiring the operation performed. 2/ Within areas, i t did not appear that size of equipment inofluenced the custom rate per acre or per hour. j No rate most common. 4/An equal number reported $5. 5/ No report or inadequate sample. ~An equal number reported $10. 26 Table 21. Combi ni nq Lequme Seed: Custom R~ates Paid or Charged, by Geographic Areas, Alabama, 1963 1 / Custom rates paid or charged 2/ Geographic Per acre Share basis area Most Usual range. Most Usual range ,common rate : in rates . common rate in rates Dollars Dollars Dollars Dollars Tennessee Valley--- a: 8.00 3/ 2.00 -10.00 1/4 1/6 - 1/2 Sand Mountain--------: 8.00 3/ 8.00 -10.00 1/2 1/4 - 1/2 Piedmont--------: 4/ 4/"1/2 1/2-1/2 Upper Coastal Plains-: 4/ 4/ 1/2 1/4 - 1/2 Black Belt ------ ,-., 8.00 8.00 -10.00 1/2 1/2 - 1/2 Southwestern Coastal Plains------------: 7.00 6.00 - 8.00 1/2 1/2 - 1/2 Wi regras -----------: 6.00 5/ 5.00 -10.00 1/2 1/2 - 1/2 STATE ---------- : 8.00 2.00 -10.00 1/2 1/6 - 1/2 1Items furnished by the custom operator included power, combining equipment, and combining labor. Hauling was done by the person hiring the combining performed. 2/ Within areas, it did not appear that size of equipment influenced the custom rate per acre or per hour. 3/ An equal number reported $10. I/No report or inadequate sample. 5/ An equal number reported $5. 27 Table 22. Djgging Peanuts: Custom Rates Paid or Charged, Wiregrass Area, Alabama, 1963 I/ Geographic Custom rates paid or charged per acre area 2/ : Most common rate Usual range in rates " Dollars Dollars Wiregrass--..-----.-: 2.00 1.50 - 2.00 1/ Items furnished by the person doing the operation included power, equipment, and operator. 2/ For geographic areas not shown, there was no report or sample was inadequate. Table 23. Shaking Peanuts: Custom Rates Paid or Charged, Wiregrass Area, Alabama, 1963 1/ Custom rates paid or charged per acre Geographic area 2/ : : SMost common rate Usual range in rates : Dollars Dollars Wiregrass---..-------: 2.00 1.00 - 2.00 1i/ Items furnished by the person doing the operation included powers equipment, and operator. 2/ For geographic areas not shown, there was no report or sample was inadequate. 28 Table 24. Digging and Shaking Peanuts- Custom Rates Paid or Charged, Wiregrass Area, Alabama, 1963 j Custom rates paid or charged per acre Geographic area Most common rate Usual range in rates o Dollars Wiregrass-- ----. =e3.00 2.00 -5.00 1/ Items furnished by the person doing the operation included power, digger-shaker, and operator. 3, For geographic areas not shown, there was no report or sample was inadequate. Combining or Picking Peanuts: Wiregrass Area, Alabama, 1963 2 Custom Rates Paid or Charged, Custom rates paid or charged 3/ Geographic PrtnPrar area 2/ Per__ton____Per__acre Most : Usual range C Most Usual range ,common rate:o in rateso common rate:0 in rates 00 0 ?Dollars Dollars Dollars Dollars Wi regrass-----__.--------20.00 .20,00_25.00 15.00 10.00-)15.00 I/ Items furnished by the custom operator included power, equi p- ment, l abor and in most cases, hauling peanuts to market. 2/ For geographic areas not shown, there was no report or sample was inadequate. 3/ In most cases rates were based on use of peanut combines; how- ever , in some cases they included rates for pull-type pickers. Table 25. 29 Table 26, Cutting or Shredding Stalks: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963j/ Custom rates paid or charged 2/ Geographic area . Per acre Per hour Most :Usu range Most Usual range ,common rate: in rates common rate: in rates Dollars Dollars Dollars Dollars Tennessee Valley---.-: 2.00 1.00 - 2.00 4.00 4.00 - 4.00 Sand Mountain2.00 2.00 3.00 4.00 3.00 - 5.00 Piedmont-------_ .-- : 3/ 3/ 300 3.00 -3.00 Upper Coastal Plains-: 2.00 2.00 . 2.00 3.50 3.00 - 4.00 Black Belt-----------: 1.50 1.00 - 3.00 3/ 3/ ? Southwestern Coastal Plains----------: 2.00 2.00 - 2..50 3// Wi regrass-----------: 2.00 1.00 A 2.00 3/ STATE----------- 2.00 1.00 - 3.00 4.00 3.00 . 500 1/ Items furnished by the custom operator included power, equip- ment, and operator. 3/ Within areas, it did not appear that size of equipment had any influence on the custom rate. 3/ No report or inadequate sample. 30 Table 27. Clippngor Mowin Pstures (Ccle or Rotary Mower) : Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1/ SCustom rates pai d or charged / a o Geographic : Per acre area a :...a Most Usual range: Most Usual range :common rate: in rates common rate: in rates o"o ?Dollars Dollars Dollars Dollars Tennessee Valley-----: 2.00 2.00 - 3,00 4,00 4.00 - 5.00 Sand Mountain--..---: 3/ 5.00 3.00 - 5.00 Piedmont ------- ----- : 2.00 2.00 - 2,00 4.00 3.00 - 7.00 Upper Coastal Plains-: 2.00 1.00 - 4.00 4.00 3.00 - 4.00 Black Belt 1----------- 1.50 1.00 - 3.50 2.50 2.50 - 4.00 Southwestern Coastal P a 2.00 .50 - 2.50 3.00 2.50 - 5.00 Wi regrass-----------:_; 2.00 1.00 - 3.00 3/ STATE------------:e 2.00 0.50 ?- 4.00 4.00 2.50 - 7.00 j/Items furnished by the custom operator included power, mower, and operator. 2/ Within areas, it did not appear that size or type of equipment influenced the custom rate per acre. 3/ No report or inadequate sample. 1/ An equal number reported $3.50. 31 Table 28. Dustin For Insect and Disease Control: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 .w/ Custom rates paid or charged Geographic Per acre with Per pound with G ographi area tractor dustera n Most ' Usual range' Most Usual range :common rate: in rates : common rate: in rates Dollars Dollars Dollars Dollars Tennessee Valley----.: 0.75 0.50 - 1.50 00.05 0?05 - 0.05 Sand Mountainft__..-.._?75 .50 - 2.00 2/ Piedmont .to ------- : 1.00 / .50 1.00 2/ 2/ Upper Coastal Plains-: .75 .50 - 1.00 .05 .05 - .05 Black Belt -Q----.----:" 1.00 .50 - 1.50 Southwestern Coastal: Plisot.d,.,_.- 1.00 .50 - 1.00 2/ 2/ Wi regrass---_---- .50 .50 - 1.00 .05 .05 - .05 STATE--,W-----__e 1.00 0.50 - 2.00 0.05 0.05 - 0.05 1/ Items furnished by the and operator for tractor duster custom operator included operati on; operator for aerial application. Materials hiring the operation performed. 2/ No report or inadequate sample. 3/ An equal number reported 50 cents. power, duster, and airplane, duster, and were furnished by the person 32 Table 29. Spai n fr2 necLdDisease Control:n Custom Rates Pai d or Charged, by Geographic Areas, Al abama, 1963 j/ Custom rates paid or charged per acre Geographic area Most common rasual range in Motcomnrae :rates ? Dollars Dla Tennessee Val,,ley--7--------05 0.75 1.50 Sand Mountain--.- ---- ww-- ---- 1.00 .75 - 1.50 Pie1dmon. --- _w----L--- 00 .50 - 2.00 Upper Coastal Plains--------. .75 .50 - 1.00 "oBlack Bet.rrww ceswww.1.00 .75 - 1 .50 Southwestern Coastal Plains-----------------100 100 - 100 Wiregrass-------------------- 1.00 .50 - 1.00 STATE ---- 1,0--100 0.50 - .00 1/ Items furnished by the custom operator included power, sprayer, and operator. Materials were furnished by the person hiring the opera- tion performed. 2/ Within areas, it did not appear that size or type of sprayer influenced the custom rate per acre. Table 30. S5praying Pecans for Insects and Diseases Control. Custom Rates Paid or Charged, Wiregrass Area, Alabama, 1963 1/ Geograhic .Custom rates paid or charged per tree -- Q Most common rate Usal range in rates ~33 Table 31. Spraying Pastures for Weed Control:. Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 .1/ Geographic Custom rates paid or charged per acre ar ea Mostcommn rae : Usual range in Mos commonrates Dollars Dollars Tennessee Valley------- 2/ 1.50 2.50 Sand Mounain-------------- .00 100 - 1.00 Piedmonto"/1.00 1.0 Upper Coastal Plains------- 2/ .50 - 1.50 Black Beltt ___ _; 1.00 .50 - 1.50 Southwestern Coastal" P lai ns-------- -. 1.000 .50 - 2.00 Wiregrass---------------1.00 .50 - 1.00 STATE -----------._---------1.00 0.50 - 2.50 1/ Items furnished by the custom operator included power, applicator and operator. Materials were furnished by the person hiring the opera- tion performed. 2I No rate most common. 34+ Table 32. Digqing Post Holes: Custom Rates Paid or Charged, by Geographic Areas, Alabama, 1963 1 Geographic area Tennessee Valle----------rrr Sand Mountain--------- Piedmont-----.O .m------------m Black Be lt----------- Custom rates paid or Most common rate Dollars 0.10 .10 .10 .10 charged per hole Usual range in rates Dollars 0.05 - 0.15 .10 - .10 .10 - .10 .06 - .10 STATE 0.10 0.05 - 0.15 1/ Items furnished by the custom operator included power, digger and operator. 2/ For geographic areas not known, there was no report or sample was inadequate. 3/ In some areas the custom rate paid or charged for digging post holes was reported on a per-hour basis. On this basis, the most common rate was as follows: $5 in the Sand Mountain Area, and $3.50 in the Piedmont Area. L- .. .mmommadow 35 Table 33. Bulldozing: Custom Rat s Paid or Charged, by Geographic Areas, Alabama, 1963 21 Custom rates paid or charged Geographic Per hour with D-6 Per hour with D-7 area or TD-14 or TD-18A Most 'Usual range Most .Usual range common rate: in rates 'common rate ' in rates " Dollars Dollars Dollars Dollars Tennessee Valley------ 12.50 12.00-15.00 .12.50 12.50-15.00 Sand Mountain-__,.--- ; 12.50 12.00-12.50 12.50 10.00-20.00 Piedmont___________ : 3/ 10.00-15.00 15.00 12.00-15.00 Upper Coastal Plains-- : 12.50 12900-13.00 12.00 12.00-15.00 Black Belt------------: 12.50 10.00-12.50 12.00 10.00-15.00 Southwestern Coastal Plains-------------_: 12.50 ~/ 12.00-12.50 12.00 10.00-12.50 Wiregrass-------------: 12.00 10.00_12.00 12.50 12.00-14.00 STATE-------__----- 12.50 10.00-15.00 12.50 / 10.00-20.00 1/ Items furnished by the custom operator included power-dozer and operator. 2/ Bulldozing with a D-8 was reported in some areas. The most common rate for the State was $15 per hour. 3/ No one rate most common. '4/ An equal number reported $12. 5/ An equal number reported $15. 36 Table 34. Anticipated Changes in Custom Rates in 19614 Compared to 1963 as Reported by a Sample of Alabama Farmers Geographic areas Tennessee Valley- - Sand Mountain-------------- Upper Coastal Plains -------- Black Belt-------------w W m _amw --- Southwestern Coastal P l a i n s -- -- -- -- -- -- -- -- -- s- - - _ _ .. _ Anticipated change in custom rates in 1964 as compared to 1963 Increase No change Decrease Per cent Per cent Per cent 18 82 0 12 88 0 28 72 0 21 79 0 23 77 0 21 16 77 84 2 0 STATE---------------- 20780. /p\ II~~PT I~C~~~T~ I r /I 79.8 0.220 APPENDIX CUSTOM HIRING VS. MACHINE OWNERSHIP Possible Advantages Possible Disadvantages 1. Costs of ownership are elimi- nated. 2. Capital required to own equip- ment can be invested in other enterprises. 3. Some labor is furnished with hired equipment. 4. Less power and associated equipment must be obtained by the farm operator. 5. Farmers may benefit from newer machinery, techniques, and skilled operation. 6. Repairs and maintenance are the custom operator's responsi- bility. 7. The farm operator with smaller jobs can gain benefits of large machines. 8. Risk of premature equipment ob- solesence is eliminated. 1. Service may not be available when job is ready. 2. Irresponsible custom operators may do poor work and lose quanti- ty and quality of products. 3. Greater risk of crop loss and/or quality because of time delays. 4. Risk of carrying noxious weeds and diseases from farm to farm. 5. For large jobs total cost may be higher than owning equipment. 6. Custom operators prefer large jobs, may refuse or postpone small jobs. 7. Farmers may not be able to realize return on labor released by hiring custom work done. -38- COSTS OF MACHINE OWNERSHIP COMPARED WITH CUSTOM RATES Decisions about ownership and use of farm machines are an important part of management. Farmers who have limited use of an expensive machine may find it cheaper to hire custom work rather than own the machine. The following is a budget for comparing the cost of machine ownership with custom hire. Example: Assume the custom rate for picking cotton is $30 per acre (500 lbs. of lint @ $.06 per pound). The following procedure may be used to determine the annual operating and variable costs of owning a two-row, self-propelled high drum cotton picker with an initial cost of $17,000, and with a life of eight years (or 2,000 hours) and with a salvage value of $1,700. HOW TO CALCULATE COSTS (APPLICABLE FOR ANY MACHINE) Any A. Annual "Fixed Costs" Example machine cost less salvage 1. Depreciation = or life (years) $1700-1,700 ------------------------- $1,912.50 cost plus salvage 2. Interest = 2 X interest rate ($17,000 + $1,700) or 2 X 6% ----------- 561.00 3. Shelter = (new cost X 1%) or $17,000 X 1% ------------------------- 170,00 4. Insurance = (Av. value X .6%) or $9,350 X .6% -------------- 56.10 5. Taxes (estimate) ----------------------- 61.20 Total Annual Ownership Cost ----------- $2,760.80 -39- 40 B. "Variable or Operating Costs" per acre: Example 1. Fuel, lubricants, and repairs (estimate)-------------------------.._ 2. Labor (estimate) Total Variable Cost ---------------- $ Any machine 5.60 1 .25 6.85 To determine in acres the "break even point" between owning a machine and hiring the operation performed on a custom basis, the following for- mula may be used: Annual Ownership Costs Custom Rate Less Variable Costs Acres needed to break even $2 760.80 = 119 Acres needed to own the two-rowself- $30.00 - $85 propelled cotton picker compared with prevailing custom rates. 0 ~llu r L~..r.