Estimated Costs for Wheat Harvesting

by Scott Stiles, Instructor of Agricultural Economics and Agribusiness - June 8, 2022

Wheat harvest is underway in Arkansas.  According to the National Agricultural Statistics Service (NASS), 15 percent of the state’s wheat had been harvested as of June 5, 2022. The previous five-year average harvested by this date is 20 percent.

The following tables include estimated harvesting costs for wheat. These estimates could be useful in determining custom rates and for analyzing machinery costs on farms. Costs include overhead or fixed costs such as depreciation, interest, insurance, and housing, as well as variable costs such as fuel, repairs and labor. Allowances for profit are not included. Charging custom rates at estimated costs should cover costs but will not generate profits. Adding 10 to 15 percent to estimated costs is appropriate when determining custom rates.

Background Information

Machinery prices used in these calculations reflect the prices paid by farmers in 2021. Formulas, published by the American Society of Agricultural Engineers, are used in calculating fixed costs for combines (header included) and grain carts.

Variable costs include an estimate of repairs and fuel costs. Repairs as a percentage of new costs are estimated for the life of the equipment and include oil and lubricants. Fuel costs are based on a diesel price of $4.72 per gallon.

The labor wage rate per hour includes social security, accident and unemployment insurance, and some perquisites. Labor costs are calculated solely on the time required to perform the in-field tasks. Labor costs are based on a wage rate of $15.27 per hour.

Table 1 provides per acre harvesting cost estimates for three header widths. Generally, per acre harvesting costs decrease as header width increases, given that acres harvested also increase. Table 2 provides per acre cost estimates for three grain cart capacities.

Table 1.  Estimated Per Acre Harvesting Cost for Wheat.

Table 2.  Estimated Per Acre Grain Cart Cost for Wheat Harvesting.

Summary

Harvesting costs will vary depending on factors such as header width, combine size, and the number of acres harvested annually per machine.  When looking solely at combine costs, a simple average of the three header widths in Table 1 reveals an average harvesting cost of $31 per acre. The addition of a grain cart (Table 2) will add about $3 per acre, bringing the harvesting cost to a total of $34 per acre. Adding 10 to 15 percent to these cost estimates is appropriate when determining a custom rate. An additional 10% to 15% would equate to a total harvesting cost of $37 to $39 per acre respectively.