by: David Marrison, Assistant Professor & Extension Educator

2010 was a fabulous year for many Ohio crop producers due to the high commodity prices which prevailed for much of the year.  But higher seed and fertilizer prices in 2011 may trigger some farmers to re-examine how they can decrease their cost of production for their commodities. Cooperative approaches can provide an alternative for farmers to reduce risks and more effectively manage farm resources.

One way which has helped save medium and small farm operations money is joint ownership of farm machinery.  Joint ownership of farm machinery offers medium and small operators a chance to reduce costs per acre and increase labor efficiency. Potential savings exist in several areas such as 1) greater annual use of large ticket machines; 2) more efficient use of labor during peak fieldwork times; 3) opportunities to do custom work for other operators or landowners; 4) greater use of individual operator skills and specialized labor and 5) more efficient use of repair and maintenance tools and facilities.  Some members of machinery joint ventures also cite the ability to own larger and more modern machinery as an advantage, although if this is carried too far, some of the cost savings may be negated. A study in Saskatchewan estimated that three medium sized grain farms (1,500 acres each) could combine their equipment and reduce their total machinery costs per acre from $44.66 to $28.75 under conventional seeding technology, and from $37.93 per acre to $25.36 per acre using direct seeding technology (Harris and Fulton). 

As with any shared ownership arrangements, there are potential pitfalls.  The key to successful joint ownership is for the partners to be able to agree on when and how to use each piece of equipment.  Shared arrangements also has the potential to reduce the flexibility and independence of the individual producer.

To help farm operators who are exploring sharing farm machinery, the North Central Farm Management Extension Committee has put together an 87 page manual to help farmers. The Farm Machinery & Labor Sharing Manual (ISBN #0-89373-106-4 Artz, Edwards, & Olson) discusses both operational and organizational issues. It includes sample sharing agreements and worksheets for allocating costs fairly. This manual includes cases studies that highlight the various types of arrangements, identify potential problems associated with sharing resources, and explains the strategies these groups used to resolve them.

This publication can be order on-line for $25 at:  http://www.mwps.org/index.cfm?fuseaction=c_Products.viewProduct&catID=778&productID=17841&skunumber=NCFMEC-21&crow=1

Additional resources on the joint machinery ownership have been authored by Iowa State University and can be found at:

Joint Machinery Ventures http://www.extension.iastate.edu/agdm/crops/html/a3-34.html

Farm Machinery Joint Ventures http://www.extension.iastate.edu/agdm/crops/html/a3-37.html

Farm Machinery Joint Venture Worksheet http://www.extension.iastate.edu/agdm/crops/html/a3-38.html

By: Gene McCluer, Extension Educator

Diesel fuel costs have risen over the last year and based on current predictions will continue to rise during the coming months.  The estimated cost of fuel for tractors, combines, and various tillage and planting operations are shown in the fuel cost estimator.  If you do custom work, you will want to reflect some or all of the increased fuel costs in the rate. Using a price for number two diesel fuel at $4.00 per gallon, the table displays fuel costs for the various horsepower machines as well as different field operations.  This form is an excel spreadsheet where you can change the price change per gallon or the fuel use per acre or hour to more precisely estimate the fuel cost portion of field operations.  This will be helpful in determining the fuel costs for custom work operations or other farm work.  

You can see that the current fuel prices may raise fuel cost for a mid-size combine from $24 to over $38 per hour.  For row crop planters, the increase in fuel cost alone is 54 cents per acre.  For haymaking, just the fuel for the mower/conditioner and twine baler will increase costs $1.26 per acre.