Per Unit Costs to Own and Operate Farm Machinery

With increasingly thin margins and new technologies, it is important that farm managers know their cost of field operations on a per unit basis (e.g., acre, ton, bale). Accurate per unit costs give confidence when constructing enterprise budgets and evaluating new technologies, such as no-till. Custom rates are often used as a proxy for per unit costs; however, this research, using entropy and jackknife estimation procedures, found that custom rates understate total ownership and operating costs by approximately 25% for an average Kansas farm. Estimates from these models are then used to benchmark actual costs against expected cost.


Issue Date:
2005-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/43720
Published in:
Journal of Agricultural and Applied Economics, Volume 37, Number 1
Page range:
131-144
Total Pages:
14
JEL Codes:
Q10; Q12; C51; C60




 Record created 2017-04-01, last modified 2017-08-25

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