| | Introduction | Objective | How to use the information | Other information sources | Custom rates
Introduction
Since 1975 Alberta Agriculture & Rural Development has annually surveyed custom rates and rental rates to provide information to farmers and custom operators.
This publication presents a summary of custom work and rental rates during 2016. These rates are only intended as a guide. They are not to be interpreted as the rates you must charge or pay. The custom rates surveys were conducted by the Statistics and Data Development Branch from February 2016 through December 2016.
The department gratefully acknowledges the contribution of the farmers and custom operators who willingly co-operated by providing information about their custom and rental rates.
Again for 2017, a listing of prices for some common farm inputs is included. These prices are collected throughout the year by Wild Rose Agricultural Producers (formerly Unifarm) and the Statistics and Data Development Unit of Alberta Agriculture & Rural Development.
Objective
The specific objective of this survey summary is to organize and report 2016 custom rates for certain custom operations on the farm. No effort is made to evaluate the fairness of reported rates. The goal is to report what is being charged, not what should be charged. Because many of the surveys were conducted in 2016, higher costs or other market factors may have resulted in higher custom rates by the time of publication.
Sample size
Sample size is often small, and thus, reported rates should only be used as a general indication of rates being charged for various custom operations in Alberta. Custom rates in this publication are not to be interpreted as recommended rates. Rates charged by individual custom operations should still be evaluated on their own merit.
Users of custom rates information
Farmers may find custom rates useful as a guide for machinery management, budgeting and financial planning for credit needs. Also, custom rates can be used as a guide in negotiating settlements for work performed for neighbors or others. Lenders, educators, government institutions and others doing budgeting or planning analysis may also find custom rates helpful in their work. Custom operators can use these guides to compare their own rate with the market rate in a certain area.
Understanding the tables
Within the tables are custom rates for various operations in Alberta which are itemized under:
- type of operation surveyed
- location where rates apply
- most common rates charged in 2015
- range of rates charged in 2016
- most common rates charged in 2016
Under the heading Location, four regions (south, central, north and Peace) are identified. When survey reports were insufficient for regional comparisons, the location is identified as Alberta.
Custom rates in 2017 for the various operations are shown as Range 2016 and Most Common 2016. The rates quoted most often by custom operators are under the heading Most Common 2016. Variations in rates from lowest to highest are under the heading Range 2016. Many factors contribute to these ranges, some of which are listed below.
Factors contributing to lower rates:
- neighborly work exchange
- location of job in relation to home base of custom operator
- custom operator’s desire to cover variable costs, but not necessarily all fixed costs
- use of older equipment that does not reflect current investment cost and/or has a lower capacity
- services such as labor, meals, fuel, supervision, transportation or other convenience services being provided to the custom operator by the farmer
- the size of the job (economies of scale)
Factors contributing to higher rates:
- full-time custom operators who are covering all costs
- charging what the market will bear
- tough jobs requiring extra power, repairs, fuel or time
- field conditions such as rocks, rough terrain, obstructions or high yield crops
- small size jobs
- higher capacity machines
How to Use Custom Rates Information
Rates quoted in this publication for the various custom operations are expressed in numerous ways (per hour, ton, tonne, bale, acres, etc.). Before comparing the various custom operations, always choose the appropriate basis on which to compare. For example, grain harvesting may require a per acre cost as compared to corral cleaning where a per hour rate is more appropriate. When custom rates are given in dollars per hour, it is advisable to convert to a physical unit cost (bushels, tonnes, acres) appropriate to that operation. A low cost per hour can be a very high cost per acre, tonne, etc.
Because custom rates quoted in this publication may not suit all custom operators and those hiring custom work, you can calculate your own custom costs by using the online Machinery Cost Calculator.
Other Information Sources
Average Alberta Farm Input Prices 2016
Custom Rates Survey Summary 2016
Saskatchewan Agriculture and Food - Navigate to: Farm Machinery Custom and Rental Rate Guide
Manitoba Agriculture Food & Rural Initiatives - Navigate to: Farm Machinery Custom and Rental Rate Guide
The online Machinery Cost Calculator
Nebraska Tractor Test Laboratory
IRON solutions
Custom Rates (see "Other Documents in the Series") |
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