By Michael Langemeier
Purdue University Ag Economist
A recent article discussed machinery cost and investment benchmarks. As the article illustrated, machinery ownership costs are a major proportion of machinery cost per acre (approximately 41 percent).
Because of this fact, it is imperative that a farm carefully consider how machinery ownership costs are computed for benchmark purposes and when comparing ownership costs to custom rates. This article discusses a couple of different methods that can be used to compute machinery ownership costs.