An increased number of farm operators are now providing some type of custom work to other farmers during the growing season. Many times, the farmers involved in custom work arrangements wonder what a fair custom rate is for the various faming practices that were performed. Iowa State University releases the annual Iowa Farm Custom Rate Survey each year in February, which is based on a survey of custom operators, farm managers, and ag lenders on what they expect custom farm rates to be for various farm operations to be for the coming year. This is probably the most widely used and updated custom rate information that is available in the Upper Midwest.

The 2011 Iowa Custom Rate Survey includes farm custom rates for typical tillage, planting, and harvesting practices, as well as custom farming rates. All listed custom rates in the Iowa Survey results include fuel and labor, unless listed as rental rates or otherwise specified. These average rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on increases in fuel costs, availability of custom operators, timeliness, field size, etc. The 2011 Iowa Farm Custom Rate Survey is available as a PDF.

An analysis of some of the more common custom rates in the 2011 Iowa Custom Rate Survey showed that the listed average custom rates for some farming practices may be a bit low, given the higher fuel costs that have existed in 2011 and the difficult field conditions this fall in many areas. The analysis also found that some of the harvesting costs for combining, as well as for the use of a grain cart and grain hauling were somewhat undervalued in the Iowa survey. Based on the higher fuel costs, difficult field conditions and harvest cost adjustments, most of the 2011 farm custom rates for harvesting, fall tillage and custom farming should probably be in the upper one-third of the range in custom rates listed in the Iowa survey to reflect true costs of operation that existed in 2011.

2012 DCP and ACRE Signup

USDA announced in earlier this fall that sign-up for the 2012 DCP and ACRE programs at county Farm Service Agency (FSA) offices will not start until Jan. 23, 2012, and will continue through June 1, 2012. There is no scheduled advance direct payment for 2012, so the entire 2012 direct payment will be paid to producers after Oct. 1, 2012. Producers who enrolled in ACRE in 2009, 2010 or 2011, or will opt for the ACRE program for 2012, will have their total direct payments reduced by 20% for 2012. Producers who have changes in owned and rented land for 2012 will need to have those adjustments made at the county FSA office prior to enrolling in the 2012 DCP program. Any changes in government farm programs resulting from a potential new farm bill most likely would not be implemented until the 2013 crop year.

Producers who enrolled farms in the ACRE program for 2009, 2010 or 2011 will automatically be eligible to enroll those farms enrolled in the ACRE for 2012. Additional farms may also be enrolled in ACRE for 2012. Rules and regulations for the ACRE program for 2012 will likely remain similar to previous years. The five-year average state and farm-level yields will be updated to include 2011 crop yields, and the benchmark prices for 2012 will be based on the 2010 and 2011 average crop prices. Producers can enroll in ACRE for 2012 at county FSA offices at any time until June 1, 2012, even if they had previously enrolled in the 2012 DCP program. For more information on sign-up for the 2012 DCP or ACRE program, producers should contact their county FSA office.

Check Grain Bins

Corn and soybean producers across the Midwest had very good fall harvest season, with many farm operators completing harvest by early November. Producers need to pay close attention to grain that is stored in on-farm grain bins for potential storage problems. Much of the corn and soybeans in 2011 were harvested and placed into grain bins at very warm temperatures; however, we have had a wide range of temperatures in the past several weeks, from fairly cold to quite warm.

These extreme changes in outside temperature can cause wide temperature variations in grain bins to occur, resulting in moisture migration in the bin, and potential for grain spoilage. Farm operators should run aeration fans periodically to equalize the grain bin temperatures in order to help prevent this situation from occurring. It is very important to check grain bins on a regular basis for any potential storage issues, and to address those issues promptly. Otherwise, there can be considerable damage to grain in storage, resulting in a significant financial loss to the farm operator.

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.