Prices on grain are being contracted higher than any ever recorded in history for 2008, and I was wondering if anybody is going to go up in harvesting price with it? In my opinion, now might be a good time to increase rates rather than try to squeak them up with bogus fuel surcharges. Anybody have anything to add?
we dont do any custom work, but we hire one a smaller guy so he can afford his maximizer payments. For the past 3 years we've been paying him the same $25/acre harvested and delivered to the elevator.
Prices were up this year and we're still paying the same rate...and that $25 includes labor, machinery, and fuel, we just double check his acres on his monitor to our fields in the books and give him a paycheck for however many acres he cut.
Now would be a good time to adjust some, but if your paying for a harvest crew to come in, i bet they'll give ya an idea, but they'll wait till its closer and can adjust their prices accordingly. Why say your gonna do it for $35/acre delivered, when ag fuel could go up to $4/gallon or prices could plummit and they'd look like crooks.
You might not want to get to greedy with harvest rates. The inputs are skyrocketing too. University of Ill has inputs without land cost at nearly $400 per acre in central Il for the 2008 crop. Even the generic Roundup prices are going to be about double last year due to supply and demand issues.
Quote:we dont do any custom work, but we hire one a smaller guy so he can afford his maximizer payments. For the past 3 years we've been paying him the same $25/acre harvested and delivered to the elevator.
Prices were up this year and we're still paying the same rate...and that $25 includes labor, machinery, and fuel, we just double check his acres on his monitor to our fields in the books and give him a paycheck for however many acres he cut.
Now would be a good time to adjust some, but if your paying for a harvest crew to come in, i bet they'll give ya an idea, but they'll wait till its closer and can adjust their prices accordingly. Why say your gonna do it for $35/acre delivered, when ag fuel could go up to $4/gallon or prices could plummit and they'd look like crooks.
If he raised is rates to $27.5/ac (10%) you would not pay it? Reason(s)? The seller (the custom harvester) must be able to profit from opportunity just like the buyer. If you would not pay his higher rate you are admitting that his services are not (1) good enough, or (2) he adds little to no additional value (i.e., grain or quality savings, convenience, etc.) and that you can do just as good a job if not better on your own, in which you probably should and not try to just help him make his "Maximizer" payment. Business is business no matter whether intended as a good gesture or not, especially if it continues as an annual gesture and especially more with the increasing price of farm machinery and its operating costs. You can't just be running it to be running it. Every time that separator is engaged it had better be making money.
Commodity prices, fuel prices, insurance costs are all proper business reasons (good business practices) why every last custom farming/harvesting operator should have annual rate increases of some sort, especially if new machinery is being used each year and fuel prices keep rising. Custom farming/harvesting rates should not be left solely in the hands of the buyer (the producer).
im not sure what would happen if he increased his rates, im not on that end of the business. Guessing from what my dad would say, we'd probably hard bargain with him to try and get $26/acre.
We harvest it better since we have a new cornhead and he has an old 643 cornhead with worn knife rolls, and we do it faster since we have a 9600 and he has a 9500. But his employees are told to help whoever, we get in our 3/4 section fields and its nice to have two combines, two carts, 4 wagons, and a graintruck running all at once since we can knock down the fields fast since their high yield corn fields, and it usually takes us 3 days and we knocked them down in one day (5am-10pm) even though we had the graincarts loaded as high as they could go and everything else was loaded as well, we still finished.
he's also valuable because he/his brother is a john deere tech, and when we breakdown they can get the parts cheaper and on sundays when the store is closed, and also know how to fix it right and fast.
an example would be in 2005 i knocked the auger against a telephone pole on accident, and it was on sunday, but he ran to the store picked up the new cylinders for us and we we're running again about an hour later....otherwise we would've been shutdown the rest of the day and waiting until the next day.
When we do any custom harvesting we use iowa states average rate. We don't typically get paid for using our semis or the cart. I would say that when the 08 figures come out for iowa state they will be a little higher but we'll just wait and see. I should also say we don't rely on any custom harvesting or anybody to help us. Someone who hires a lot combined would know more, or who is in the business. Umm, ebert, do you only have like 3 fields. 1300 acres and you have almost whole sections. That would be awesome.
we have more matt, it used to be a complete 3/4section, but then the interstate cut it in half, so its 2 fields now. I'm kinda glad it did cut it in half....goin a mile each direction with the 730 would get pretty old, lol....
I guess reality is that Im in the business to make a profit, and make a living. Im not exempt from inflation either and my growers shouldnt be when it comes to my harvest rates. The growers just the same, pay the higher fuel, insurance, and parts bills and the combine guy on the bottom end shouldnt have to take it inthe shorts. All you custom cutters should look at your bottom line sometime at the end of the season, when all the bills are paid, all the payments are current, dont forget the fuel bill for those last few loads, and maybe those tires from the late billing tire shop, add up all that profit,,, how many hours did you put in to make that net profit, how much per hour are you payin yourself?
You also must remember that if the cheaper cc'er doesn't make enough money to make it, all it does is make him go out of business quicker, and you end up having to pay the extra money anyways. Dad and I have talked/argued about it from the trucking aspect of it, in regards to fuel increases. It is hard to ask the farmer for more money for the services you provide, especially with crop margins as razor thin as they have been, but if we go out of business, what does the farmer end up having to do? He has to get the one who was more expensive than you in the first place. It's a tough place to be, but what do you do??
ebert, please don't short-change the poor guy. You may not be willing to pay $27/ac, but if he's not wiling to do it, what do you do? Go for the guy that's at $30/ac, or risk losing your crop by adding more days to your harvest?
he hasnt complained with the $25/acre, we'd just end up having a longer harvest if we lost him, but only by a week. It was actually his idea for $25 because we used to pay a neighbor $30 to help us out when we had 1800acres bout 7 years ago.
We penciled it out and for what we're paying him, is only .13cents more an acre than what it costs my dad for fuel, labor, and maintenence. Count it in that our CH runs a 4430 with two wagons and an old graintruck/dmi wagon that he has to refuel 2 times a day, the combine fuel, gaincart tractors fuel, pay for 4 workers, etc. It's not too shabby to have him around. Im sure we'd have no problem paying more for hsi services since he doesn't combine alot of acres for us, but i know we won't be paying $30/acre for it because we realized we lost to much money when we did it that way.
if your machines arent making you money they need to be parked. that really pisses me off when someone does it for nothing like that. then then word gets out and everyone else expects you to do the same. some people just dont get it
i guess i've lost interest in this thread and would like to talk more about foodfibers comments there. 6% return in a month, so I will be sending you a check, and expect my 72% interest in 12 months.
Some custom guys dont make anything on hauling, trucking companies other that the harvester owned take care of all the freight so there isnt any give and take with the cutting rate in hopes of making it back with trucking,,, which Ive heard other guys here try to do. All my growers made good money on wheat and corn last year and this year will be even better, I know because Ive seen what they have contracted out already.
Also in my area they all sell the straw which counts for double and sometimes tripple what I charge per acre, so tell me again why Im out of line wanting a raise?????
Most growers cleared $60.00 per acre on straw. Three years ago they tilled it in.
Wheat here is near $8.75/bu. Anyone see this as a huge break for growers?
Rates for one fella in Iowa may work if you live there, or Texas, Kansas etc, if you live there, I know what it takes to make it where Im at and its more than most states. Anybody out there paying $8.00 an hour for minimum wage like we are?
Quote:Rates for one fella in Iowa may work if you live there, or Texas, Kansas etc, if you live there, I know what it takes to make it where Im at and its more than most states. Anybody out there paying $8.00 an hour for minimum wage like we are?
$8 / hr for farm labor?
I have two and they are salaried, but they also truck for me in the off season.
Quote:we charged triple 18's last year from Texas thru parts of South Dakota..with the price of wheat and beans we are going to try and get 21's this year.
Which means?
Well again my area is different than most, growing expenses are higher here BUT many of my growers made close to 70$ per acre on the straw bales behind the combine,,,, THIS IS INSANE that I cant even get half what the grower gets on the straw, which they used to disc under but now the harvesting isnt really an expense anymore.
Ive hear lots of rates like 14s 16s here but in my opinion anyone who is a custom cutter is worth 22s and not a penny less. None of us are exempt from the fuel increase, and let me tell ya we havent seen high priced diesel yet but its comin. I put in so much time into my harvesting business that I make less money per hour than the kid sellin me the parts to build them.
I still feel doing all the repairs myself and not having the high price tag of a new machine each year increases my bottom line, however my time is worth something too.
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