Understanding Crop Machinery Costs: Insights and Trends

By Michael Langemeier

In recent discussions about agricultural economics, crop machinery costs have taken center stage. The calculation of these costs includes diverse factors such as economic depreciation, interest, property taxes, insurance, repairs, fuel, lubricants, and custom hire and rental expenses. This article delves into machinery costs across small and large farms, along with trends observed in corn and soybean crop machinery expenses.

Crop Machinery Costs Explained

Table 1 provides a breakdown of machinery costs per acre for farms managing less than 250 acres versus those handling over 1000 acres of corn or soybeans in 2024. Interestingly, the average machinery cost per acre for corn was reported at $185 for smaller farms and $178 for larger counterparts. For soybeans, these figures were $122 for small farms, and $108 for the large ones. Notably, these discrepancies highlight the importance of using benchmarks tailored to farm size.

For farms managing 250 to 500 acres, average machinery costs stood at $189 ($119 for corn and soybeans, respectively). Similarly, those with 500 to 1000 acres averaged $178 ($110 for soybeans).

Comparative Machinery Costs

Another significant comparison can be made when analyzing machinery costs per acre between farms in the lower and upper 20% of net returns. In 2024, the discrepancy for corn between these groups was $95 per acre, while the difference for soybeans was $55 per acre. These variations indicate that machinery costs are not uniform across the board. Caution is advised when using low-return figures as benchmarks, as older machinery may exhibit lower economic depreciation and interest costs, potentially skewing the data.

Trends in Machinery Costs

Examining machinery cost trends from 2007 to 2024 reveals substantial changes. Recent data show that since 2021, machinery costs per acre for farms exceeding 1000 planted acres have increased by 25% for corn and 22% for soybeans. Moreover, a consistent average difference of $14 per acre exists between small and large corn or soybean enterprises over this time, underscoring the economies of scale in machinery costs.

Summary

This exploration of crop machinery costs, utilizing data from 2007 to 2024, highlights that larger operations tend to incur lower costs per acre on average. For 2024, these costs were $178 for corn and $108 for soybeans on large farms. A forthcoming article will further investigate crop machinery investments and net investments categorized by farm size.

Crop Machinery Costs was originally published by Farmdoc.

This code creates a structured and unique article optimized for a WordPress blog while maintaining proper readability and formatting.