How Much Money Can You Make Custom Harvesting

Farm Guy

Posted 12/7/2011 13:46 (#2089733)
Subject: anyone make money custom farming?

What is the best way to determine if your making money at custom farming. I know the direct costs of the the custom farming like labor, fuel and insurance. How do you split up the machinery costs for the custom work and my own farm? Is it just the % custom acres = % machinery costs applied to custom acres. It seems like I would have some expences if I did the custom work or not but I know other things like repairs and maintenance are higher. I have also bought some equipment that I probibly wouldn't need if I wasn't custom farming. So any ideas on how to divide up costs. I have been custom farming about 40% of my total acres for 3 years. I have been figuring it as 40% of equipment expenses applies to the custom farming. With what equipment is costing to replace and repairs getting so expensive custom farming is not looking so good unless rates go up. ahay68979

Posted 12/7/2011 14:07 (#2089778 - in reply to #2089733)
Subject: RE: anyone make money custom farming?

Saronville NE

I know exactly where you are coming from in the same boat myself. I try to break down tractor hours and or acres and charge that percentage of repairs, payments and fuel to the custom side. Were going up on rates again next year, you got too, really slim margins in the custom work right now IMO. Its not the payments that hurt me, its the repairs, those are harder to recover. I spent $30k just on 2 pieces last year, thats not counting all my other equipment or repair bills. brokedown

Posted 12/7/2011 14:30 (#2089813 - in reply to #2089778)
Subject: RE: anyone make money custom farming?

West Central Missouri

If you also farm your own ground in addition to custom work it is probably the hidden cost that eats up your profit. That cost being the need to work on your land doing something, even paperwork as oppose to running over somebody elses ground to pay last years expenses. We always go do the jobs very few farmers want to do when most others are doing custom work on the side. Provides cash flow for them not PROFIT. Just my thoughts though. lawfarms

Posted 12/7/2011 14:57 (#2089842 - in reply to #2089813)
Subject: RE: anyone make money custom farming?

King City, Mo

Always herd about custom combining, the guy doing it is losing money and the farmer paying him thinks he's paying him too much......it seems when people don't have their own equipment out in the field things get left out there that could harm tires, or the combine or baler........or tree's don't get trimmed back like they should...people hurry through their own stuff and then do a better quality job running on someone else and their crop suffers.

tntfarms

Posted 12/7/2011 16:08 (#2089932 - in reply to #2089842)
Subject: Re: anyone make money custom farming?

Valparaiso, NE

I did some calculations based on equipment rental rates (which I think are similar to my maintenance and depreciation) and my actual fuel and labor costs. For my "crew" to harvest my operating cost per hour comes out to 37.50 per acre. This is for 2 combines minus the operators, 3 semi drivers and not counting any truck expenses other than fuel, grain cart and operator, and fuel for tractor and combines. We ran 2 9670STS with 8 row heads operating at an average of 4.5mph and using 80% efficiency, 8400 tractor and brent 880 cart. Two trucks pulling tandems and one with a triple. I went to $50 per acre for a rate and when it is all said and done I probably only profited $7 per acre. Road time, lubricants, wear on trucks, repairs etc ate up quite a bit of profit. We covered about 1000 acres of corn and beans custom. Profit may have been a bit better on the beans, but not much due to the increased wear on the combines. If I am to do more custom rates are to to $65 or higher.

I know for sure that custom work led to some of the work for my own operation being neglected.

Edited by tntfarms 12/7/2011 16:10

deereman

Posted 12/7/2011 16:20 (#2089942 - in reply to #2089733)
Subject: RE: anyone make money custom farming?

NE SD

Most of the guys I do work for do not know the costs of todays equipment or anything close to it. They see old 1660 or 9500 combines selling for 35k and wonder how I charge so much with combines that cheap that look to have lots of life in them yet. Custom rates have not kept up with today's equipment prices at all. I charge more each year and they always gripe a little but I tell them I have to make money doing this or I can't do it. I do it when mine is all done and honestly do not know if I am truly making money as it all gets absorbed into the whole operation but it is nice to get the check at the end. Trouble is there is always some dumb%-- that they hear of willing to do it cheaper because he want to make use of his 200k combine on 500acres and thinks its his foot in the door to rent it someday.
Another thing is these guys never pick a rock or do anything extra. They just want the check without any sweat whatsoever.

Edited by deereman 12/7/2011 16:23

Cattle Feeder

Posted 12/7/2011 18:57 (#2090184 - in reply to #2089733)
Subject: Re: anyone make money custom farming?

Charge your self the same as you would your customers. Then if you have any money left over after all bills are paid you made money. Fawazhay

Posted 12/7/2011 19:08 (#2090210 - in reply to #2089733)
Subject: Re: anyone make money custom farming?

Northern CA

This discussion has been discussed a time or two here and over at the combineforum as well. I always think it is interesting that everyone says there is no money in custom work, yet someone is always trying to get into doing custom work, and there are large operators that all they do is custom work. I started out years ago doing only custom hay and tillage work. Then I got into leasing land. Now, I question myself from time to time if there is any money in custom work. I keep thinking there must be because I built up enough hay equipment, without big payments, to farm a little over a thousand acres from 2000 to 2004. Then, I had the equipment to take on some leased land and still continued with the custom work cash flow. Now, about 25% of my acres are custom, and those are the "good" custom jobs, too. I don't think I helped answer the question, but I don't think the answer is simple.
As pointed out above, there are many hidden costs. Also, one cannot simply treat all acres farmed as costing the same. One might have a really nice custom job, on good ground with good conditions, and his own ground could be a rock pile. I think the answer is different for everyone. nefarmer

Posted 12/7/2011 19:11 (#2090220 - in reply to #2089942)
Subject: RE: anyone make money custom farming?

NC Nebraska

+ 1 Big Ben

Posted 12/7/2011 19:54 (#2090324 - in reply to #2089733)
Subject: RE: anyone make money custom farming?

Columbia Basin, Ephrata, WA

There are plenty of days that I wonder if it's worth it, but I'm pretty sure we have made money doing custom silage work for the last eight years. It can be pretty intense and requires seven figures worth of equipment, so that helps keep every Tom, Dick, and Harry from doing a little work on the side. IMO that is the major reason that there is no money in custom combining in a lot of places; everyone thinks it's easy money.
gilb2you

Posted 12/7/2011 22:24 (#2090731 - in reply to #2090324)
Subject: RE: anyone make money custom farming?

There must be, i started in the custom haying business as i had no land to rent or own. Paid for alot of machinery and now farm quite a bit of ground myself, and hire some custom work done. Boy they seem expensive now! Just kiddin. But what i did notice when i rented a few places and tried to do alot of custom work, my own ground started to suffer, i realized if i took better care of what i had i would be way more money ahead. It was nice to have checks coming in all the time though. But all in all i would say there is money there. Remember, that hydraulic pump or engine or tire or enter whatever would also go bad doing your own stuff too, so dont let those big items scare you. jalopy

Posted 12/7/2011 23:32 (#2090861 - in reply to #2089942)
Subject: RE: anyone make money custom farming?

NC IA

Couldn't have said it better myself, very good points. Funny you mentioned the guy wanting to do custom work to get his foot in the door to rent it. Those kind of guys need to get a life. Actually a big reason I have certain custom jobs in my home area is exactly because I am NOT actively seeking to rent ground. I am no threat to my customers, like trying to rent it away from their landlords or something.

My personal opinion is either you are a custom or a farmer. It is a conflict to be both, even though a lot of people try.