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010518stackhouse1540x800.jpg Kyle Stackhouse

Evaluating our truck enterprise

The numbers are in hand, so there is no better time to weigh the economics of this side business.

With the year end just behind us, I thought it was time to take a closer look at the numbers behind our trucking business. Let’s cut to the chase:

Fuel/oil/grease                         3.2 cents per bushel

Wages and associated taxes   5.9 cents per bushel

Plates/licenses                         0.4 cents per bushel

Insurance                                 0.4 cents per bushel

Repairs                                    5.8 cents per bushel

Total                                        15.7 cents per bushel each way, (in and out)

In the list above, there wasn’t even an allocation for machine updates (wear and tear)!

To be fair, when doing a quick comparison to three previous years, the repairs were way out of line. They were 2.5 times the average, as a matter of fact, so I guess we were just due.

There wasn’t any single big-ticket item that pushed us over the edge. So, for 2017, I’ll make the assumption that the updates category went toward the repairs. In the past, I’ve found the fuel, repair, and update categories all come in approximately the same.

Convenience factor

Semis also have a convenience factor to them. I didn’t include credit for any of that in the calculations above. I didn’t include a truck to tote the planter trailer to the field. I didn’t include any backhauls of lime or stone. I didn’t include tending the fertilizer spreader. I didn’t include the 80-120 loads of manure we hauled in. I figure these are simply the cost of doing business and would in the end get allocated to the farms and in turn could be broken down to a per acre or per bushel basis. After all, it takes all those things to make a bushel of grain. However, if I was being fair, I would guestimate (based on number of loads) the cost above would require a 15% reduction to account for the other trucking tasks. The reduction puts our cost in just over $3 a loaded mile.

Necessary evil

It’s been said before that trucks are a necessary evil. I will agree with that. If we could shut down our trucking enterprise, we would do it tomorrow! However, logistically that just isn’t possible. It would be nearly impossible to line up enough commercial trucks to get grain back to the farm during harvest.

As a side note, we’re not sure how the new commercial trucking regulations are going to impact us. However, our LP gas company (we take transport delivery) sent us a letter last week warning of delivery delays and possible demerge charges because of changes to the transportation laws.

My wife Rachael’s uncle is a truck driver. I’d tell you what he thinks about the laws, but none of it would be suitable to print!

Just an FYI- I would say by the time our grain leaves the field until it reaches the end destination, on average it has logged 45-55 miles one way.

The opinions of the author are not necessarily those of Farm Futures or Farm Progress.

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