Custom rates for farm services show slow increase in Missouri

From digging postholes to plowing fields to processing grain, it is possible to outsource almost every on-farm task to professional farm service providers.

Before doing so, however, farmers should check out a recent publication, “2003 Custom Rates for Farm Services in Missouri,” compiled by University of Missouri agricultural economists.

“We do the survey every third year,” said Ron Plain, MU professor of agricultural economics who put together the guide sheet with Joyce White and John Travlos. “From year to year, the change in prices is really quite small, but we do tend to see farm services costs go up over time.”

Their latest survey of farmers, agribusiness firms, aerial applicators and land-improvement contractors was conducted in the fall of 2003. It includes not only crop production services but also jobs such as pond construction, brush cutting and livestock hauling. Each category notes the number of respondents, a range of rates and the average rate.

“There is no assurance that the rates reported in this guide will cover your costs for performing the service, or that you will be able to hire a custom operator for the rates shown,” Plain said. “Rates for small jobs will be higher – sometimes much higher – than those reported in this guide.”

Plain said much of the cost of custom services often reflects the kind of equipment necessary to do the job. “A big chunk of the cost for something like hay-baling, for example, is the equipment.” The average price to mow, rake, bale and net-wrap a 1,500-pound round bale is listed at slightly more than $14, with a range of prices from $10 to $18.50 per bale.

Typically, he said, energy costs increase every year, “and so does the need of the operator to increase income. So, there’s wage pressure as well.”

He noted that the average size of Missouri farms also has steadily increased. “I don’t know whether that increases the number of people doing custom-rate services or not.”

A factor that might be significant, Plain said, is the higher average age of Missouri farmers. “Because of the graying of farmers, we’re probably seeing an increase in demand for farm services. As we keep extending longevity, we have more and more farmers over 65.

“They’ve slowed down, but they still want to operate their farms,” he said. “They’re just not quite up to doing it all themselves.”

The six-page publication, MU Extension Guide Sheet G-302, is available online at http://muextension.missouri.edu/explorepdf/agguides/agecon/G00302.pdf.