Machinecostcalculator

Welcome to the Machinery Cost Calculator Menu Page
The Machinery Cost Calculator contains a machinery cost calculator, cost charts, a factsheet on machinery
budgeting and a comparison worksheet that compares machinery replacement options including purchase,
repair, lease and custom hire. It also has a simple cash basis lease worksheet.
Developed by Rob Gamble

Finance and Business Structures Program Lead
OMAFRA, Guelph
email: rob.gamble@omaf.gov.on.ca
January 15, 2001
Revised August 27, 2002
Budgeting Farm Machinery Costs
by John Molenhuis
Agriculture and Rural Division,
Ontario Ministry of Agriculture and Food
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01-075.pdf
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Budgeting Farm
Machinery Costs
Leasing Farm Equipment

by Rob Gamble,
Finance and Business Structures Program Lead
Agriculture and Rural Division,
Ontario Ministry of Agriculture and Food
Double click to view file as a Word document
Document
Calculator
Type of Machine Operation: (eg combine)
Machine Cost Calculator

POWER UNIT (TRACTOR OR SELF-PROPELLED MACHINE)
Life (years) 5 Purchase Price $ 240,000
Interest rate 5.00% Trade in Value $ 105,000
Acres/year 1600 Hours per year 200
Acres/hr (see table 5) 8 Fuel Cost per litre 0.60
Fuel Used -litres/hr (see Table 5) 40
Annual Fixed Cost
Depreciation = purchase price – trade-in value 27,000
(see table 3) life of machine (years)
Interest* = (purchase price + trade-in) x annual interest rate 8,625
2
Insurance & housing = purchase price x 1½ % 3,600
Total Fixed Cost 39,225 (A)
Annual Operating Cost

Fuel & lubricants(Table 5) (litres/hour x hr/yr x fuel cost/L x 1.15) 5,520
Repairs = estimate using Table 4 2000
Total Operating Costs 7,520 (B)
Total Costs $ 46,745
MACHINE (TILLAGE IMPLEMENT, PTO MACHINE, OTHER)
Life (years) 5 Purchase Price $ -
Interest rate 5.00% Trade in Value $ -
Annual Fixed Cost
Depreciation = purchase price – trade-in value 0
life of machine (years)
Interest* = (purchase price + trade-in) x annual interest rate 0
2
Insurance & housing = purchase price x 1½% 0
Total Fixed Cost 0 (C)
Annual Operating Cost

Repairs = estimate using Table 4 0
Total Operating Costs 0 (D)
Total Costs $ -
ANNUAL MACHINERY COSTS (A+B+C+D) $ 46,745 (E)
Return to Management 15% Operator Labour (self or hired) per Hour $ 17.00
Labour Allowance for Machine travel, downtime 15%
Profit Margin (return to management, admin. costs) (suggest 15% of machinery costs ( E x 0.15 ) $ 7,012 (F)
Operator Labour (self or hired) --- (suggest 15% over machine hr for travel, downtime) # of machinery hr x 1.15 x wage/h
$ 3,910 (G)
All Costs Including Management (E+F+G) $ 57,667 (H)
* Interest — This interest calculation is the average annual interest cost of the investment (yours and/or the
lender's) that is tied up in the machine
Analysis
Fixed cost per acre $24.52
Operating cost per acre $4.70
Total cost per acre $36.04
Fixed cost/hr $196.13
Operating/hr $37.60
Cost per hour $288.33
Page 3
Cost Charts
Tables 4 and 5 scroll right
TABLE 3. Trade-In Values as a Percent of Purchase Cost
End of Year Tractors (hp) Group 1 Group 2 Group 3 Group 4 Group 5 Group 6 Group 7
<80 hp 80–149 150+ hp
1 60 68 67 74 49 56 65 47 61 69
2 54 61 59 62 44 50 60 44 54 62
3 50 57 54 54 40 46 56 42 49 56
4 46 53 49 48 37 42 53 40 45 52
5 43 49 45 43 35 39 50 39 42 48
6 41 46 42 38 32 37 48 38 39 45
7 38 44 39 34 30 34 46 36 36 42
8 36 41 36 31 28 32 44 35 34 40
9 34 39 34 28 27 30 42 34 31 37
10 33 37 32 25 25 28 40 33 30 35
11 31 35 30 23 24 27 39 32 28 33
12 29 33 28 20 23 25 38 32 26 31
13 28 32 26 18 21 24 36 31 24 29
14 27 30 24 17 20 22 35 30 23 28
15 25 29 23 15 19 21 34 29 22 26
16 24 28 21 13 18 20 33 29 20 25
17 23 26 20 12 17 19 32 28 19 24
18 22 25 19 10 16 18 30 27 18 22
19 21 24 18 9 16 17 29 27 17 21
20 20 23 17 8 15 16 29 26 16 20
Source: American Society of Agricultural Engineers Standards, American Society of Agricultural Engineers, 1999
Group 1: Combines, self-propelled forage harvesters.
Group 2: Swathers, mower-conditioners, rotary hay mowers, rotary mower-conditioners.
Group 3: Forage harvesters, balers, bale elevators, tub grinders, augers, grinder-mixers, forage boxes, roller mills.
Group 4: Planters, drills, sprayers.
Group 5: Moldboard plows, chisel plows, cultivators, v-rippers.
Group 6: Disks, harrows, hoes.
Group 7: Manure spreaders, miscellaneous equipment.
Page 4
Cost Charts
TABLE 4. Accumulated Repair Costs as a Percent of Purchase Price

¼% LIFE Accumulated ½% LIFE Accumulated ¾% LIFE Accumulated
Machine Hours – Costs Hours – Costs Hours – Costs
2 Wheel Tractors 3,000 – 6.2% 6,000 – 25.0% 9,000 – 56.2%
4 WD and MFWD Tractors 4,000 – 4.8% 8,000 – 19.2% 12,000 – 43.2%
Self Propelled Combines 750 – 2.2% 1,500 – 9.3% 2,250 – 21.9%
Planters, Drills 375 – 4.1% 750 – 17.5% 1,125 – 41.0%
Moldboard Plows 500 – 8.3% 1,000 – 28.7% 1,500 – 59.6%
Disk, Disk Harrows 500 – 5.5% 1,000 – 18.0% 1,500 – 35.9%
Chisel Plows 500 – 10.1% 1,000 – 26.5% 1,500 – 46.8%
Cultivators 500 – 10.2% 1,000 – 27.0% 1,500 – 47.6%
Mowers 500 – 14.2% 1,000 – 46.2% 1,500 – 92.0%
Square Balers, Small 500 – 6.6% 1,000 – 23.0% 1,500 – 47.7%
Square Balers, Large 750 – 6.0% 1,500 – 20.7% 2,250 – 43.0%
Large Round Balers 375 – 7.4% 750 – 25.9% 1,125 – 53.6%
SP Forage Harvesters 1,000 – 3.1% 2,000 – 12.5% 3,000 – 28.1%
Rakes 625 – 8.6% 1,250 – 22.7% 1,875 – 40.1%
EXAMPLE Accumulated Repair Cost Calculation

New Combine Cost $240,000
Projected use 8,000 acres or 200 hours per year over 5 years
Estimated accumulated 4.2 % of purchase cost
repair costs at 1,000 hours
from Table 4
Repair costs Approx. $10,000 ($240,000 X 4.2%) over 5 yr for an average of $2,000/yr
Used Machinery When calculating the depreciation on used machinery, use the actual price paid for the machine minus its expected trade-in or
salvage value, divided by the expected life of the machine on your farm. Increase repair rates to levels appropriate for the age
or number of hours on the machine. Expect to have higher than normal repair expenses in the first year of ownership of a used
machine as you bring it back into top operating shape
Page 5
Cost Charts
FULL LIFE Accumulated

Hours – Costs
12,000 – 100%
16,000 – 80%
3,000 – 40%
1,500 – 75%
2,000 – 100%
2,000 – 60%
2,000 – 75%
2,000 – 70%
2,000 – 150%
2,000 – 80%
3,000 – 75%
1,500 – 90%
4,000 – 50%
2,500 – 60%
d for the machine minus its expected trade-in or

ease repair rates to levels appropriate for the age
expenses in the first year of ownership of a used
Page 6
Cost Charts
TABLE 5. Performance, Horsepower and Fuel Requirements of Selected Farm Equipment
HP required Acres/hour Litres/ac Litres/hour

4–l8 in. Furrow Plow 75 2.8 4.5 12.5
6–18 in. Furrow Plow 130 MFWD 4.2 5.1 21.6
8–l8 in. Furrow Plow 160 5.6 4.7 26.5
12.5 ft Field Cultivator 75 9 1.4 12.5
18 ft Field Cultivator 105 MFWD 13 1.3 17.4
37 ft Field Cultivator 225 26.7 1.4 37.5
11 ft Chisel Plow 75 5.9 2.1 12.5
15 ft Chisel Plow 130 MFWD 8 2.7 21.6
11 ft Tandem Disk 60 6.4 1.5 9.9
15 ft Tandem Disk 105 MFWD 8.7 2 17.4
4R – 36 in. Row Crop Planter 40 5.6 1.2 6.8
6R – 30 in. Row Crop Planter 60 7 1.4 9.9
12R – 30 in. Row Crop Planter 105 MFWD 14 1.2 17.4
4R– 36 in. Minimum–Till Planter 60 5.1 1.9 9.9
6R–30 in. Minimum–Till Planter 75 6.4 2 12.5
8R–30 in. Minimum Till Planter 105 MFWD 8.5 2.1 17.4
25 ft Grain Drill 130 MFWD 4.7 4.6 21.6
35 ft Grain Drill 160 MFWD 14.9 1.8 26.5
12 ft Presswheel Drill 75 5.1 2.5 12.5
20 ft Presswheel Drill 130 MFWD 8.5 2.5 21.6
15 ft No-Till Drill 130 MFWD 6.4 3.4 21.6
20 ft No-Till Drill 160 MFWD 8.5 3.1 26.5
30 ft Sprayer 40 15.4 0.4 6.8
50 ft Sprayer 60 25.6 0.4 9.9
9 ft Mower Conditioner 40 4.4 1.6 6.8
9 ft Rotary Mower/Conditioner 75 6.6 1.9 12.5
Square Baler 40 4.4 1.6 6.8
Round Baler 1,000 lbs. 60 3 3.3 9.9
Round Baler 1,500 lbs. 60 4 2.5 9.9
Large Size Square Baler 130 MFWD 16.3 1.3 21.6
Round Baler 1,000 lb/Wrapper 60 3 3.3 9.9
2–Row Forage Harvester 105 MFWD 1.4 12.5 17.4
Large Forage Blower 60 9.9
Combine 4R–30 in. Corn Hd 190 2.8 11.4 31.8
Combine 12R–30 in. Corn Hd 275 7.6 6 45.9
Combine Grain Head 20 ft 220 6.8 5.4 36.8
Combine Grain Head 30 ft 275 10.2 4.5 45.9
Combine Soybean Head 15 ft 220 4.5 8.2 36.8
Combine Soybean Head 25 ft 275 7.4 6.2 45.9
Page 7
Comparison
Machinery Cost Comparison Calculator

Type of Machine
New Used Repair Lease Custom
New Price (or Value of your current) 175,000 100,000 35,000 175,000 -
Value of the machine on future sale (end of lease) 56,000 25,000 15,000 65,000
Trade in Value of your current machine (or sale in cust. work) 35,000 35,000 - 35,000 35,000
Life of the machine (years) 5 4 3 5 0
Hours on machine when purchased 0 2,000 2,000 0
Acres per Year 1,200 1,200 1,200 1,200 1,200
Hours per year / and Total Hours 286 286 286 286
Accumulated Total Hours over Life 1429 3,143 2,857 1,429
Rate of Work (acres per hour) Optional entry 4.2 4.2 4.2 4.2
New Used Repair Lease Custom
Fuel Cost per litre 0.50 0.50 0.50 0.50 Rate
Fuel Use per Hour (litres) 40 40 40 40 per acre
Annual Repair Costs 3,255 7,875 7,500 3,255 34.00
Total Repairs over machines life 16,275 31,500 22,500 16,275
Repairs as a % the purchase price 9.3 21.0 15.0 9.3
Down Payment 5,000 5,000 0 5,000
Loan Amount Required 135,000 60,000
Interest Expense (total) 28,618 12,719
Annual Loan Payments (or Lease) 40,904 18,179 0 29,325
Discount rate (if you put your money elsewhere) 6% 6% 6% 6% 6%
Annual Fixed Costs New Used Repair Lease Custom
Average Depreciation per year 23,800 18,750 6,667 22,000
Interest on Your Investment (income for custom) 6,300 4,050 1,050 6,300 2,100
Insurance and Housing 2,625 1,500 525 2,625
Total Fixed Costs 32,725 24,300 8,242 30,925
Annual Operating Costs
Fuel and Lubricants 6,571 6,571 6,571 6,571
Repairs 3,255 7,875 7,500 3,255
Labour 0 0 0 0
Total Operating Costs 9,826 14,446 14,071 9,826
Total Annual Costs 42,551 38,746 22,313 40,751 38,700
Total Annual Costs Per Acre $ 35.46 $ 32.29 $ 18.59 $ 33.96 $ 32.25
Annual Cash Costs New Used Repair Lease Custom

Annual Payments on Loan 40,904 18,179 - 29,325
Down Payment X Interest Rate 300 300 0 300
Total Operating Costs 9,826 14,446 14,071 9,826
Total Pre Tax Cash Costs 51,030 32,925 14,071 39,451 40,800
Cash Costs Per Acre $ 42.53 $ 27.44 $ 11.73 $ 32.88 $ 34.00
After Tax Calculations New Used Repair Lease Custom
Tax Rate 0.41 0.41 0.41 0.41 0.41
Capital Cost Allowance Rate 30% 30% 30%
Tax Deductable Expenses
Average Capital Cost Allowance per year $ 27,857 $ 17,711 $ 6,808
Interest Expense per Year (average) 5,724 3,180 - -
Fuel, lubricants and repair expenses 9,826 14,446 14,071 9,826 -
Lease Payments 29,325
Custom Work Expense 40,800
Total Tax deductable expenses $ 43,407 $ 35,337 $ 20,879 $ 39,151 $ 40,800
Tax Reduction 17,797 14,488 8,560 16,052 16,728
Per acre tax reduction 14.83 12.07 7.13 13.38 13.94
After Tax Cost Per Acre $ 27.69 $ 15.36 $ 4.59 $ 19.50 $ 20.06
Page 8
Comparison
CCA Calculations are below
CCA Calculations
Start 175,000 100,000 35,000
1 148,750 26,250 85,000 15,000 29,750 5,250
2 104,125 70,875 59,500 40,500 20,825 14,175
3 72,888 102,113 41,650 58,350 14,578 20,423
4 51,021 123,979 29,155 70,845 10,204 24,796
5 35,715 139,285 20,409 79,592 7,143 27,857
6 25,000 150,000 14,286 85,714 5,000 30,000
7 17,500 157,500 10,000 90,000 3,500 31,500
8 12,250 162,750 7,000 93,000 2,450 32,550
9 8,575 166,425 4,900 95,100 1,715 33,285
10 6,003 168,997 3,430 96,570 1,201 33,799
Deductions
Year 1 26,250 15,000 5,250
Year 2 44,625 25,500 8,925
Year 3 31,238 17,850 6,248
Year 4 21,866 12,495 4,373
Year 5 15,306 8,747 3,061
Year 6 10,714 6,123 2,143
Year 7 7,500 4,286 1,500
Year 8 5,250 3,000 1,050
Year 9 3,675 2,100 735
Year 10 2,573 1,470 515
Total for 5 Years 139,285 79,592 27,857

Average Deduction $ 27,857 $ 15,918 $ 5,571
Page 9
Loan
Payment Schedule Interim Totals for Principal, Interest and Total Payments
PAYMENT
LOAN AMOUNT ($) 60,000.00 Err:520 Starting with payment number: 1
ANNUAL INTEREST RATE % 8 Scheduled Interest and ending with payment number: 12
LENGTH OF LOAN (YEARS) 4 Err:520
NO. OF PAYMENTS PER YEAR 1 Actual Interest The total payments are: $ 18,113.52
COMPOUNDING PERIODS/YEAR 2 with optional payments The total interest is: $ 10,291.14
Err:520 The total principal is: $ 7,822.38
Beginning Scheduled Interest Principal Optional Closing Payments Interest Principal

Pmt Balance Payment Portion Portion Payments Balance Pmt to date to date to Date
1 60,000.00 Err:520 4,896.00 Err:520 0.00 Err:520 1 Err:520 4,896.00 Err:520

Err:520 Err:520 Err:520 Err:520 Err:520 0.00 Err:520 ### Err:520 Err:520 Err:520
Err:520 Err:520 Err:520 Err:520 Err:520 0.00 Err:520 Err:520 Err:520 Err:520 Err:520
Page 10
Loan
Page 11
Loan
Page 12
Loan
Page 13
Loan
Page 14
Lease Comparison
Leasing vs Buying
Lease Option
Cost of Equipment $ 100,000
Total Lease Payments per Year $ 11,548
Length of Lease 4
Total Payments on Lease $ 46,192 (A)
Down Payment or Trade $ 20,000
Total Cash Invested in Lease $ 66,192
Amount Tax Reduced @ 41% tax rate (.41 x line A) $ 18,939
Total After Tax Cost of Lease $ 47,253
Purchase Option
Cost of Equipment $ 100,000 (B)
Down Payment of Trade $ 20,000 (C)
Loan Amount $ 80,000
Total Loan Payments - 4 years @ 8% $ 96,956 (D)
Total Loan Payments per year $ 24,239
Depreciated Value of equipment at the end of 4 years (30%) $ 29,155 (E)
FMV of asset at the end of 4 years $ 50,000
Amount left to be paid on loan at year 4
Total Cash Investment in Purchase ( C+D-E ) $ 66,956
Amount of tax reduced @.41 tax rate
Interest ( $16,956 x .41 ) $ 6,952
Depreciation ( B - E x .41 ) $ 29,046
Recapture on equipment if sold at the end of 4th year $ 20,845
Tax on recapture @ 41% tax rate 8,546
Total After Tax Cost of Purchase $ 39,504
Average Increased Cash Flow per year by Leasing $ 12,691

Average Cost Saving per year on Purchasing $ 1,937
Page 15

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Welcome to the Machinery Cost Calculator Menu Page

Developed by Rob Gamble

Double click to view file as a pdf document

Double click to view file as a Word document

Leasing Farm Equipment

Double click to view file as a Word document

Type of Machine Operation: (eg combine)

Machine Cost Calculator

Annual Operating Cost

Annual Operating Cost

Tables 4 and 5 scroll right

TABLE 3. Trade-In Values as a Percent of Purchase Cost

TABLE 4. Accumulated Repair Costs as a Percent of Purchase Price

EXAMPLE Accumulated Repair Cost Calculation

FULL LIFE Accumulated

d for the machine minus its expected trade-in or

TABLE 5. Performance, Horsepower and Fuel Requirements of Selected Farm Equipment

HP required Acres/hour Litres/ac Litres/hour

Machinery Cost Comparison Calculator

Annual Cash Costs New Used Repair Lease Custom

CCA Calculations are below

Total for 5 Years 139,285 79,592 27,857

Beginning Scheduled Interest Principal Optional Closing Payments Interest Principal

1 60,000.00 Err:520 4,896.00 Err:520 0.00 Err:520 1 Err:520 4,896.00 Err:520

Average Increased Cash Flow per year by Leasing $ 12,691

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