Machinery Cost Estimate for Cranberry Boom Sprayer Make assumptions for “Typical” Grower Make assumptions for “Typical” Grower 90’ boom sprayer pulled.

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Presentation transcript:

Machinery Cost Estimate for Cranberry Boom Sprayer Make assumptions for “Typical” Grower Make assumptions for “Typical” Grower 90’ boom sprayer pulled by 100 HP tractor 90’ boom sprayer pulled by 100 HP tractor Machinery Cost Categories Machinery Cost Categories Fixed: depreciation, capital (interest) cost Fixed: depreciation, capital (interest) cost (pay whether use sprayer or not) Variable: labor, repairs/maintenance, fuel/lube Variable: labor, repairs/maintenance, fuel/lube (pay per hour or acre of use) Fixed costs spread over average acres machinery used on each year Fixed costs spread over average acres machinery used on each year

Depreciation Straight line depreciation over 15 yrs Straight line depreciation over 15 yrs (Price new – Price after 15 yrs) / 15 Sprayer: (55, ,000)/15 = $1000/yr Sprayer: (55, ,000)/15 = $1000/yr Tractor: (60, ,000)/15 = $3333/yr Tractor: (60, ,000)/15 = $3333/yr Spread over annual use Spread over annual use Sprayer: 14 trips/yr for 30, 60, or 90 ac, so Sprayer: 14 trips/yr for 30, 60, or 90 ac, so $1000/(30 x 14) = $2.38/ac $1000/(60 x 14) = $1.19/ac $1000/(90 x 14) = $0.79/ac Tractor: 500 hr/yr: $3333/500 = $6.67/hr, at a spray rate of 7.5 ac/hr: $6.67/7.5 = $0.89/ac Tractor: 500 hr/yr: $3333/500 = $6.67/hr, at a spray rate of 7.5 ac/hr: $6.67/7.5 = $0.89/ac

Interest Cost Average Machinery Value at 6% rate Average Machinery Value at 6% rate Sprayer: ½(55,000-40,000) x 6% = $2850/yr Sprayer: ½(55,000-40,000) x 6% = $2850/yr Tractor: ½(60,000-10,000) x 6% = $2100/yr Tractor: ½(60,000-10,000) x 6% = $2100/yr Spread over annual use as before Spread over annual use as before Sprayer: 14 trips/yr for 30, 60, or 90 ac, so Sprayer: 14 trips/yr for 30, 60, or 90 ac, so $2850/(30 x 14) = $6.79/ac $2850/(60 x 14) = $3.39/ac $2850/(90 x 14) = $2.26/ac Tractor: 500 hr/yr: $2100/500 = $4.20/hr, at a spray rate of 7.5 ac/hr: $4.20/7.5 = $0.56/ac Tractor: 500 hr/yr: $2100/500 = $4.20/hr, at a spray rate of 7.5 ac/hr: $4.20/7.5 = $0.56/ac

Labor Part Time Hired Labor at $10.00/hr, 7.7% benefits rate, and 7.5 ac/hr = $1.44/ac Part Time Hired Labor at $10.00/hr, 7.7% benefits rate, and 7.5 ac/hr = $1.44/ac Owner/Operator Management Time: $15.00/hr, 7.7% benefits rate, 7.5 ac/hr, with 10% overhead on time (extra time to manage part time help) = $2.61/ac Owner/Operator Management Time: $15.00/hr, 7.7% benefits rate, 7.5 ac/hr, with 10% overhead on time (extra time to manage part time help) = $2.61/ac

Repairs/Maintenance Purchase price x repair factor (%) per hour of use from Ag Engineering Purchase price x repair factor (%) per hour of use from Ag Engineering Sprayer: varies with acres since hours used increases (assume 14 trips/yr): 30 ac: $0.13/ac Sprayer: varies with acres since hours used increases (assume 14 trips/yr): 30 ac: $0.13/ac 60 ac: $0.06/ac 90 ac: $0.04/ac Tractor 500 hr/yr, $3.08/hr for $0.45/ac Tractor 500 hr/yr, $3.08/hr for $0.45/ac

Fuel/Lube Diesel: $1.80/gal Diesel: $1.80/gal 100 HP tractor uses 4.38 gal/hr 100 HP tractor uses 4.38 gal/hr Lubrication: 15% of fuel cost Lubrication: 15% of fuel cost Assume 10% overhead (time to fuel/lube), plus 7.5 ac/hr spray rate Assume 10% overhead (time to fuel/lube), plus 7.5 ac/hr spray rate Final: $1.33/ac for tractor fuel/lube Final: $1.33/ac for tractor fuel/lube

Put it all together 30 acres 60 acres 90 acres

Graphical Version

Summary Machinery cost for applying fertilizer ranges $10-$20/ac, with larger costs for smaller farms since spread depreciation and interest costs over fewer acres Machinery cost for applying fertilizer ranges $10-$20/ac, with larger costs for smaller farms since spread depreciation and interest costs over fewer acres Analysis based on several assumptions, if want results for different assumptions, contact Analysis based on several assumptions, if want results for different assumptions, contact Dr. Paul D. Mitchell, Ag and Applied Economics/UWEX (608) Dr. Paul D. Mitchell, Ag and Applied Economics/UWEX (608)