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Gary Schnitkey and Dale Lattz
Farm Management Specialists
Department of Agricultural and
Cost And Efficiencies if Different Sized Combines
We calculated the costs of different sized combines harvesting from 600 acres up to 3,000 acres with acres evenly split between corn and soybeans. Costs were calculated assuming that combines were purchased new in 2005 and held for seven years. Costs included depreciation, interest, housing, repairs, fuel, and labor. More detail on methods used in calculating costs is provided in Machinery Cost Estimates: Harvesting available in the management section of farmdoc (http://www.farmdoc.illinois.edu/manage/index.html).
The three sizes of combines evaluated were 1) small - 265 horsepower (hp) engine, 6-row corn head, 20-foot grain platform, 2) medium - 305 hp, 6-row grain head, and 30-foot grain platform, and 3) large - 340 hp, 12-row corn head and 30-foot grain platform. Figure 1 shows cost estimates for the three combines at 1,000, 1,600, and 2,200 acres harvested.
At 1,000 acres, the small combine has cost of $35.15 per acre, the lowest of the three combines. The medium combine has a cost of $37.80 per acre, $2.65 per acre higher than the small combine. The large combine has a cost of $40.65 per acre, $5.50 higher than the small combine.
At 1,600 acres, the small combine still has the lowest cost; however, the costs between the different combines are not large. The small combine has costs of $26.90 per acre, the medium combine has costs of $27.10 per acre, and the large combine has costs of $28.20. The difference between the large combine and the small combine is $1.30 per acre.
At 2,200 acres, the medium combine has the lowest cost. The medium combine has cost of $22.65 per acre compared to $22.80 for the large combine, a difference in per acre costs of $.15. Cost for the small combine was not calculated at 1,600 acres because the small combine could not complete the 1,600 acres in a timely manner.
Costs decrease dramatically as acres harvested increase. Figure 2 shows costs for using the large combine from 600 acres up to 3,000 acres. Cost for harvesting 1,400 acres equals $31.15 per acre. Per acre cost is $24.15 per acre when 2,000 acres are harvested, a decrease of $7 from costs at 1,400 acres. Costs decrease a further $4.90 as acres increase to 3,000 acres. At 3,000 acres, combine cost is $19.25 per acre.
The relationship between acres harvested and cost decreases have become more pronounced over time. Similar estimates to the ones presented above for 2005 where made in 2003. Compared to 2003, the 2005 cost estimates increased by over 33% when acres harvested were 1,000 acres or less. Cost increases for acres harvested above 2,000 acres were about 25% higher in 2005 as compared to 2003.
Cost increases in 2005 compared to 2003 are largely attributable to increases in the costs of purchasing a combine. Higher combine purchase costs lead to higher depreciation and interest costs. Spreading depreciation and interest costs over more acres is a key in keeping harvesting costs under control. Hence, higher combine costs lead to an incentive to increase acres harvested.