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Sprayer Economics

Sprayer Economics. Gary Schnitkey schnitke@uiuc.edu University of Illinois. Outline . Estimate costs of per acre sprayer operations for inclusion on farmdoc Evaluate for four situations. Custom Rate Surveys. Type Avg. Range Iowa, 2005

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Sprayer Economics

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  1. Sprayer Economics Gary Schnitkey schnitke@uiuc.edu University of Illinois

  2. Outline • Estimate costs of per acre sprayer operations for inclusion on farmdoc • Evaluate for four situations

  3. Custom Rate Surveys Type Avg. Range Iowa, 2005 Tractor 4.95 (3.50 – 8.50) Self propelled 5.05 (3.50 – 8.00) Airplane 5.80 (5.00 – 6.75) Purdue, 2004 Tractor 4.81 (3.32 – 6.29) Highboy 5.44 (3.77 – 7.12) Airplane 6.22 (4.30 – 8.14)

  4. Situations Evaluated • Pull-type, well-equipped, 90 ft boom • Pull-type, economical, 40 ft boom • Self-propelled, High boy, 90 ft boom • Self-propelled, Coupe, 60 ft boom

  5. Tendering Costs $50 per hour for truck and labor Acre/hr Cost/acre • Pull-type, well equip 50 $1.00 • Pull-type, economical 23 2.17 • Self-prop, high crop 50 1.00 • Self-Prop, coupe 41 1.21

  6. Pull-Type SprayerWell Equipped • $25,000 purchase price • 90 ft boom • Hold 10 years (sell for $5,200) • $1.50 fuel price, 7% interest rate, $13.50 labor price • Covers about 50 acres per hour

  7. Acres per Hour Speed 8 miles per hr. x feet per mile 5,280 feet x boom width 90 feet ÷ area per acre 43,560 square feet The. capacity 87 acres x field efficiency 60% Acres covered 52

  8. Tractors Charges (155 HP)Based on Per Hour Costs Per Year Per Hour Depreciation $4,867 $16.22 Interest 3,714 12.38 Housing 531 1.77 Repair 627 2.09 Fuel and Lub 3,362 11.20 Labor 4,455 14.85 Total 17,555 $58.51 From Machinery Cost Estimates on farmdoc

  9. Per Hour Tractor Cost by HP

  10. Pull Type Sprayer (4,000 acres)Costs per Acre Sprayer Tractor Total Depreciation .50 .31 .81 Interest .21 .24 .45 Repairs .21 .04 .25 Ins + House .04 .03 .07 Fuel .21 .21 Labor .28 .28 Total .96 1.11 2.07

  11. Per Acre Costs for Different Acres Acres Cost 1,000 $4.23 2,000 2.77 3,000 2.30 4,000 2.07 5,000 1.94 Holds tractor hour costs constant **No tendering costs ($1.00 per acre)

  12. Pull Type SprayerEconomical • $14,000 purchase price • 40 foot boom • Hold 10 years ($0 salvage value) • 105 HP tractor • 23 acres per hour (60% field efficiency)

  13. Per Acre Costs for Different Acres Acre s Cost 1,000 $4.19 2,000 3.22 3,000 2.90 4,000 2.76 5,000 2.69 Holds tractor hour costs constant Do not include tendering costs ($2.17)

  14. Pull Type Sprayers, Per Acre Costs Acre s 90 ft. 40 ft. 1,000 $4.23 4.19 2,000 2.77 3.22 3,000 2.30 2.90 4,000 2.07 2.76 5,000 1.94 2.69

  15. Why not much difference? • Tractor cost spread over fewer acre • 90 foot boom (155 HP) • $58.51/ 50 acres = $1.17 per acre • 40 foot boom (105 HP) • $44.13 / 23 acres = $1.92 per acre

  16. Self Propelled SprayerHigh Crop • $192,000 purchase price • 90 foot boom • High boy • Hold for 10 years ($40,000 value) • 50 acres per hour (60% field efficiency)

  17. Salvage Value • Work from Kansas State • http://www.agmanager.info/ • Kastens and Dhuyvetter • Developed OwnSpray.xls to estimate costs of self-propelled machines • Salvage values: • Drop 15% for each year • Drop 1% for each 100 hours

  18. Self Propelled, High Boy (10,000 acres)Costs per Acre Total Per Acre Depreciation 15,213 1.52 Interest 6,511 .65 Repairs 4,000 .40 Ins + House 1,160 .12 Fuel 2,484 .23 Labor 2,224 .24 Total 31,920 3.16

  19. Per Acre Costs for Different AcresHigh Boy ** Acres Cost 5,000 $5.45 7,500 3.92 10,000 3.16 12,500 2.70 15,000 2.39 ** No tendering costs ($1.00)

  20. Self Propelled SprayerSpray Coupe • $91,000 purchase price • 60 foot boom • No tall crop ability • Hold for 10 years ($19,000 value) • 41 acres per hour (60% field efficiency)

  21. Self Propelled (10,000 acres)Costs per Acre Total Per Acre Depreciation 7,207 .72 Interest 3,084 .31 Repairs 4,000 .40 Ins + House 550 .06 Fuel 1,743 .17 Labor 3,582 .36 Total 20,166 2.02

  22. Per Acre Costs for Different AcresSpray Coupe Acres Cost 5,000 $3.10 7,500 2.37 10,000 2.02 12,500 1.80 15,000 1.66 ** No tendering costs ($1.21)

  23. Self Propelled Sprayers, Per Acre Costs Acre s High crop Coupe 5,000 $5.42 $3.10 7,500 3.92 2.37 10,000 3.16 2.02 12,500 2.70 1.80 15,000 2.39 1.66

  24. Why difference? • Difference due to initial costs of machine

  25. Summary • Must run over sufficient acres to get costs approaching custom rates. • Some instances of cost savings. • Additional reasons justifying ownership from other than cost savings perspective

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