Wallaces Farmer

A way to compare custom rates for farmwork

Iowa Farm Custom Rate Survey shows what farmers are charging and paying in 2024.

Rod Swoboda

May 7, 2024

6 Min Read
combine in cornfield
CUSTOM WORK: Performing custom work can be an additional source of income for some farmers. With higher machinery prices, more farmers are hiring out custom work. Courtesy of Iowa State University

Many Iowa farmers hire out custom work in their farming operations. Others rent machinery or do custom work for neighbors. Whether you hire out custom work or provide such services, you can review and compare your rates with those paid across the state.

The annual Iowa Farm Custom Rate Survey, conducted by Iowa State University Extension, reports the average pricing for common services such as tillage, spraying, planting, fertilizer application, forage harvesting, grain bin rental, grain drying and more.

The report is based on 130 responses and 2,805 custom rates provided by Iowa farmers, custom operators, and farm managers. The survey was mailed to 394 people via U.S. mail and 407 people via email in mid-February.

Farm tasks listed in the report include everything from planting to harvesting, with custom rate cost data that reflect the average, median and range for each task.

Rates in the report are the amounts expected to be charged or paid in 2024, and they include fuel and labor (unless otherwise noted). The average price for diesel fuel (highway-retail, including taxes) was assumed to be $3.92 per gallon (as projected by the U.S. Energy Information Administration in early February).

Interested in renting machinery and want to compare your cost with rental charges elsewhere? Rental rates for some machines are shown in the last section of the report, along with a worksheet for estimating rental rates for other machinery.

Some rates declined slightly

Ann Johanns, program specialist with ISU Extension and editor of Ag Decision Maker, says this year’s custom rates reflect the current farm economy.

“Generally, 2024 custom rates are down slightly from 2023,” she notes. “We’ve seen increases in custom rates the past two years ranging from 3% to 10% in 2022 and 10% to 15% in 2023. The steady to slight decline in rates generally reported in the 2024 survey is closer to the changes observed prior to the last two years.”

While the projected fuel price increased in the 2024 report, production challenges and crop prices seem to have affected custom rates as well. Survey respondents also mentioned increased interest rates.

“Looking at our survey results over the years, sometimes the responses make a correction to balance what we’ve seen the previous year,” Johanns says. “So even with higher fuel prices, custom rates in 2024 in general went down a little and a few custom rates went up compared to 2023.”

A closer look

Here's a look at some of the Iowa statewide averages for custom rates, comparing 2023 to 2024.

  • Average spraying rates. The average rates for field spraying with ground application equipment in 2024 vary between $7 per acre for broadcast (not incorporated) with a tractor, and $8.35 per acre for broadcast, with a self-propelled sprayer on a tall crop. These numbers are relatively the same as the 2023 survey. Aerial spraying averages $10.70 per acre, down slightly from $10.95 in 2023. The survey didn’t distinguish between drone and airplane applications. These prices don’t include the cost of materials.

  • Average fertilizer rates. The average for applying dry bulk fertilizer in 2024 is $7.25 per acre applied. This is up from 2023’s average rate of $7.20. Liquid application ranges from $7.65 per acre for spraying and $12 per acre for sidedressing — both down from 2023.

Injecting anhydrous without a toolbar has an average rate of $13.25 per acre and increases to $15.10 per acre with a toolbar. These rates have increased from 2023, when they were $12.10 and $14.70, respectively. Lime spreading in 2024 is $7.25 per ton; up 25 cents from $7.50 in 2023.

As with spraying, these prices don’t include the cost of materials.

Looking at harvest custom rates, the corn combining cost is averaging $44.05 per acre, up $2.35 from 2023. Soybean combining for 2024 is averaging $42 per acre, $2.10 higher than last year. Grain cart hauling is up 65 cents an acre for both corn and soybeans — to $8 and $6.90 per acre, respectively.

Mowing hay is at the same rate as last year, $13.85 per acre, although the price for baling large round bales is up $2 and totals $15.60 per bale in 2024.

Know your costs

It’s important for custom operators to know the market for custom farming in their area and to know their costs.

“If a custom operator who is providing services isn’t covering their costs, they are operating at a loss,” Johanns says. “If they don’t have a good handle on their cost to operate, there are helpful resources on the Ag Decision Maker website.”

Also, if equipment or the service you provide is unique, that can help determine the custom rate you charge customers. “There are many factors for why custom rates can vary,” she adds. “But any custom rate needs to cover the cost of machinery, its operation and your labor.”

Reasons why the custom rate charged in a particular situation may be above or below the average for an area include:

  • timeliness with which operations are performed

  • quality and special features of the machine

  • operator skill

  • size and shape of fields

  • number of acres contracted

  • condition of the crop for harvesting

  • Availability of custom operators in an area also affects rates. Keep in mind the cost of operating farm machinery includes fuel, repairs, depreciation and interest, as well as operator labor.

Providers and users surveyed

New for the 2024 Iowa Custom Rate report is additional insight into who responded to each operation shown. Of the 2,468 who responded with usable rates: 48% are service providers, 32% are service users, 8% are both service providers and users, and 12% are unknown.

Sources of the 69 rates reported for machinery rentals are: 38% machinery owners, 35% machinery renters, 11% machinery owners and renters, and 12% unknown. Sources of the 108 rates reported for wages are: 81% employers, 7% employees, 2% employer and employee, and 9% unknown.

The custom rate survey is intended to be used only as a guide. Actual custom rates may vary according to availability of machinery in a given area, timeliness, operator skill, field size and shape, crop conditions and the performance characteristics of the machine being used.

“Ultimately, the Iowa Custom Rate Survey is a starting point in discussions, but any custom rate charged or paid should cover the operator’s cost of owning and operating the machinery being used,” Johanns says. “Just using the results of the survey alone might not be the right answer for your individual operation.”

Survey participants needed

Information available in the Iowa Farm Custom Rate Survey is only possible due to the responses provided each year. If you are interested in joining the 2025 survey, send your mail or email address to Ann Johanns, Iowa State University, Borlaug Learning Center, 3327 290th St., Nashua, IA 50658. Or contact her at 515-337-2766 or [email protected].

“We saw more responses to our survey this year than in previous years,” Johanns says. “We encourage farmers who do custom work — and farmers who hire custom work for their farming operation — to please participate in our survey. We appreciate your help.”

Swoboda is editor emeritus of Wallaces Farmer.

About the Author(s)

Rod Swoboda

Rod Swoboda is a former editor of Wallaces Farmer and is now retired.

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