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Impact of Fuel Prices on Per-Acre Costs
Jim Jacobs, Dallas Mount & Jim Freeburn
With the recent increase in fuel prices, operating costs for farm and ranch businesses and custom operators are on the rise. The cost of operating vehicles and tractors along with fertilizer prices are all impacted by fuel prices. When evaluating the cost of field operations, operators must consider the change in fuel prices. For example, the University of Wyoming publication, B-1142, "Custom Rates for Wyoming Farm and Ranch Operations 2000-2002" is based on data collected when the three-year average price was about $1.39 and $1.45/gallon for gasoline and diesel, respectively. The average price for gasoline in August 2005 was $2.50 per gallon which means the price of gasoline is now approximately $1.11 per gallon higher compared to the 2000-2002 period.
The impact of increased fuel prices on per-acre costs can be estimated for each individual field operation using the following information:
- Fuel use in gallons per hour (gals/hr)
- Accomplishment rate stated in hours per acre (hrs/ac)
- Increased price of fuel ($/gal)
Spreadsheets have been developed to assist these businesses in calculating the impact of the increase in fuel price on mileage and per-acre costs. Individuals will have to input the information requested. Please note operators will have to input a Load factor and the PTO-HP of the power unit to get an estimate of fuel use in gals/hr. The typical Load factors range from 0.6 to 0.7, with the lighter operations (planting, baling, etc.) having a Load factor of about 0.6 and tillage operations (plowing, disking, etc.) having a Load factor of about 0.7. To estimate the accomplishment rate (hours per acre), operators have to input speed in mph, implement width in Feet, and field efficiency for each operation (%/100). Most field efficiencies range from 65 percent to 80 percent, with tillage operations having the higher efficiencies and planting and spraying having the lower efficiencies.
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