What Should You Charge The Neighbors?

Facing higher input costs, more farmers than ever are taking a closer look at no-till. While there may be numerous opportunities for you to no-till more acres in your area while adding dollars to your checkbook, there’s no easy answer as to what you should charge for no-tilling, spraying or other work done in a neighbor’s fields.

Besides farmers who want you to help them try no-till for the first time or to help them stretch labor and machinery resources over more acres, there’s also a growing opportunity for you to capitalize on the growing trend toward more custom no-till farming for landowners. Both active and absentee landowners today are exploring the possibility of hiring someone to custom farm their land rather than cash rent the ground or deal with tenants on traditional 50-50 crop share arrangements that often don’t work as well economically with no-till.

While a 1 to 2 percent annual increase in machinery rates is common, Iowa State university ag economist William Edwards says many farmers adjust prices every 3 to 5 years rather than making a change every year. Purdue University ag economist Craig Dobbins says custom rates in Indiana didn’t change much from 2000 to 2004, although there was some increase for planting and harvesting due to higher fuel prices and rising machinery costs.

The custom rate figures found in the accompanying boxes from Iowa and Indiana provide a good starting point for determining what is a reasonable rate to charge for doing no-till work…

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