Client Corner: How can I find a rental rate for a piece of machinery?

How can I find a rental rate for a piece of machinery?

Rental rates for some machinery items are shown on the ISU Extension Custom Rate Survey. For items where just the custom rate is reported, a worksheet for estimating rental rates for those items is included at the end of the Custom Rate Survey. The calculations and an example using a Tandem Disk are included below.

Estimating a Machinery Rental Rate

Example:

Tandem Disk

1. Custom charge (includes labor, fuel, tractor)

$________/acre

$14.20

2. Percent of custom charge that is for interest, insurance, depreciation, and repairs (excluding fuel and labor) (use 60% for tillage, 65% for planting and harvesting)

x ________%

x 60%

3. Rental value, including tractor (1 x 2)

= $________/acre

= $8.52

4. Tractor rental value, if tractor is not provided:_______HP x $_______per hp-hour rental rate / _______acres/hour =

Ex: 150 HP x $.27 (per hp-hour rental rate) / 15 acres/hour = $2.70

– $________/acre

– $2.70

5. Implement rental value, without tractor (3 minus 4)

= $________/acre

= $5.82/acre

 

Ag Decision Maker (AgDM) 

An agricultural economics and business website.

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