IDEAS home Printed from https://ideas.repec.org/a/ags/joaaec/43720.html
   My bibliography  Save this article

Per Unit Costs to Own and Operate Farm Machinery

Author

Listed:
  • Beaton, Aaron J.
  • Dhuyvetter, Kevin C.
  • Kastens, Terry L.
  • Williams, Jeffery R.

Abstract

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.

Suggested Citation

  • Beaton, Aaron J. & Dhuyvetter, Kevin C. & Kastens, Terry L. & Williams, Jeffery R., 2005. "Per Unit Costs to Own and Operate Farm Machinery," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-14, April.
    • Handle: RePEc:ags:joaaec:43720
    DOI: 10.22004/ag.econ.43720
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/43720/files/131-144.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.43720?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Timothy L. Cross & Gregory M. Perry, 1995. "Depreciation Patterns for Agricultural Machinery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 194-204.
    2. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    3. Donald W. Reid & Garnett L. Bradford, 1983. "On Optimal Replacement of Farm Tractors," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(2), pages 326-331.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibendahl, Gregg, 2015. "The Effects of Machinery Costs on Net Farm Income," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2015, pages 1-11.
    2. Shockley, Jordan M. & Osborne, William A. & Dillon, Carl R. & Pierce, Jerry S., 2016. "A Two-Tiered Benchmarking Analysis for Cost Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2015, pages 1-14.
    3. Shockley, Jordan M. & Osborne, William A. & Dillon, Carl R. & Pierce, Jerry S., 2016. "A Two-Tiered Benchmarking Analysis for Cost Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2016.
    4. Watkins, K. Bradley & Hill, Jason L. & Anders, Merle M. & Windham, Tony E., 2006. "Whole-Farm Evaluation of No-Till Profitability in Rice Production using Mixed Integer Programming," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(3), pages 1-17, December.
    5. Peterson, Jeffrey M. & Smith, Craig M. & Valentin, Luc, 2005. "A Water Quality Trading Simulation for Northeast Kansas," 2005 Annual meeting, July 24-27, Providence, RI 19167, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Williams, Jeffery R. & Pendell, Dustin L. & Sweeney, Daniel & Rice, Charles W. & Nelson, Richard G., 2006. "A Risk Analysis of Carbon Sequestration in Claypan Soil with Conservation Tillage Systems and Nitrogen Fertilizers for Grain Sorghum and Soybean," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35327, Southern Agricultural Economics Association.
    7. Pendell, Dustin & Williams, Jeffery & Sweeney, Daniel & Nelson, Richard & Rice, Charles, 2006. "Economic Feasibility of Carbon Sequestration with Alternative Tillage Systems," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2006, pages 1-10.
    8. Ward, Barry, 2017. "Pr - Economic Depreciation: Evidence Of Change From High Margin To Low Margin Periods," 21st Congress, Edinburgh, Scotland, July 2-7, 2017 345785, International Farm Management Association.
    9. Alexandr Gulyarenko & Michał Bembenek, 2022. "The Method of Calculating Ploughshares Durability in Agricultural Machines Verified on Plasma-Hardened Parts," Agriculture, MDPI, vol. 12(6), pages 1-15, June.
    10. T. Sathiya Priya & N. Vivek, 2016. "Restructuring the agricultural supply chain," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 10(1), pages 135-148.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2023. "Agricultural Tractor Retail and Wholesale Residual Value Forecasting Model in Western Europe," Agriculture, MDPI, vol. 13(10), pages 1-21, October.
    2. Dumler, Troy J. & Burton, Robert O., Jr. & Kastens, Terry L., 2000. "Use Of Alternative Depreciation Methods To Estimate Farm Tractor Values," 2000 Annual meeting, July 30-August 2, Tampa, FL 21800, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2024. "Enhancing Predictive Accuracy in European Agricultural Tractor Residual Value Estimation: A Double Square Root Regression Reappraisal," Agriculture, MDPI, vol. 14(5), pages 1-19, April.
    4. Unknown, 1998. "References/Literature Cited," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    5. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2024. "New Agricultural Tractor Manufacturer’s Suggested Retail Price (MSRP) Model in Europe," Agriculture, MDPI, vol. 14(3), pages 1-21, February.
    6. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2023. "A New Method and Model for the Estimation of Residual Value of Agricultural Tractors," Agriculture, MDPI, vol. 13(2), pages 1-20, February.
    7. repec:lrk:lrkwkp:fiirs016 is not listed on IDEAS
    8. Marsh, Thomas L. & Mittelhammer, Ronald C., 2001. "Adaptive Truncated Estimaton Applied To Maximum Entropy," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36169, Western Agricultural Economics Association.
    9. Müller, Marc & Sanfo, Safietou & Laube, Wolfram, 2013. "Impact of Changing Seasonal Rainfall Patterns on Rainy-Season Crop Production in the Guinea Savannah of West Africa," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151208, Agricultural and Applied Economics Association.
    10. Severini, Simone & Valle, Stefano, 2008. "The Abrogation Of Set Aside And The Increase Of Cereal Prices: Can They Revert The Decline Of Cereal Production Generated By Decoupling?," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44782, European Association of Agricultural Economists.
    11. Axel Tonini & Roel Jongeneel, 2009. "The distribution of dairy farm size in Poland: a markov approach based on information theory," Applied Economics, Taylor & Francis Journals, vol. 41(1), pages 55-69.
    12. Giacomini, Raffaella & Ragusa, Giuseppe, 2011. "Incorporating theoretical restrictions into forecasting by projection methods," CEPR Discussion Papers 8604, C.E.P.R. Discussion Papers.
    13. Zografos, K. & Nadarajah, S., 2005. "Expressions for Rényi and Shannon entropies for multivariate distributions," Statistics & Probability Letters, Elsevier, vol. 71(1), pages 71-84, January.
    14. Greg Seymour & Maria S. Floro, 2016. "Identity, Household Work, and Subjective Well-Being among Rural Women in Bangladesh," Working Papers id:11520, eSocialSciences.
    15. Frank Fuller & John Beghin & Scott Rozelle, 2007. "Consumption of dairy products in urban China: results from Beijing, Shangai and Guangzhou," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), pages 459-474, December.
    16. Barkhordar, Zahra A., 2019. "Evaluating the economy-wide effects of energy efficient lighting in the household sector of Iran," Energy Policy, Elsevier, vol. 127(C), pages 125-133.
    17. Miguel Henry & George Judge, 2019. "Permutation Entropy and Information Recovery in Nonlinear Dynamic Economic Time Series," Econometrics, MDPI, vol. 7(1), pages 1-16, March.
    18. Hyeok Lee & Yong Kyun Kim, 2018. "The effects of external shocks on the Korean economy: CGE model-based analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-14, December.
    19. Alberto Díaz Dapena & Esteban Fernández Vázquez & Fernando Rubiera Morollón & Ana Viñuela, 2021. "Mapping poverty at the local level in Europe: A consistent spatial disaggregation of the AROPE indicator for France, Spain, Portugal and the United Kingdom," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 63-81, February.
    20. Wang, Yafeng & Graham, Brett, 2009. "Generalized Maximum Entropy estimation of discrete sequential move games of perfect information," MPRA Paper 21331, University Library of Munich, Germany.
    21. Lecca, Patrizio & Swales, Kim & Turner, Karen, 2011. "Rebound Effects from Increased Efficiency in the Use of Energy by UK Households," SIRE Discussion Papers 2011-34, Scottish Institute for Research in Economics (SIRE).

    More about this item

    Keywords

    Production Economics; Productivity Analysis;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:joaaec:43720. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.