Farm machinery cost per hour: own it or hire the job?

A Kansas wheat farmer who keeps a US$480,000 combine for 150 hours a year pays about US$12,600 more each year than if the farm hired the harvest, in the example worked out below. Hiring means paying a custom rate: the price a contractor charges to cut the crop with the contractor’s own machine and operator, which averaged US$34.37 an acre for wheat in Kansas in 2026. This combine costs less than hiring only above about 206 hours a year. Write one sheet per machine from the purchase invoice, the hour-meter readings and the dealer’s repair history, then set the machine’s hour beside the contractor’s rate.

The hour meter is the gauge that counts the hours the engine has run. The machine-hour sheet holds one machine on one page. It carries the price on the invoice, the years you plan to keep the machine and the hour-meter readings for the last year. Below them go the repairs year by year and, at the bottom, the contractor’s rate for the same work. Without it, whoever decides between keeping a machine and hiring the job works from the number at hand: the tax depreciation, a university cost table or the memory of the last big repair.

The combine in this article is hypothetical. Its price, its pace of 10 acres an hour and the US$70 an hour for fuel and operator are invented for the arithmetic, and each box says so. The interest rate, the repair percentages and the contractor’s rate come from the sources linked in the text.

How much of an hour is just owning the combine?

Owning a machine costs two things that run whether it works or sits: the value it loses each year and the interest on the money tied up in it. For a 175 hp tractor, the University of Illinois farmdoc estimates US$26,118 a year that does not change with annual use. Divided by the hours, that sum becomes US$174.12 an hour at 150 hours and US$58.04 at 450.

The example combine costs US$50,760 a year to own. The box shows how the figure is built, and the table divides it by the hours.

Going from 360 hours to 120 triples the cost of owning per hour, from US$141 to US$423, although nothing about the machine changed. The sheet therefore uses the hours the hour meter logged, never the hours you hoped for. Fuel and the operator come in later, beside the contractor’s rate, and the article on the fuel bill against the hour meter covers the fuel.

Why can’t the tax return give you this figure?

Tax rules let a farm deduct a machine much faster than it wears out. For 2025 returns, the IRS farmer’s tax guide says the 100% special depreciation allowance has been reinstated for certain property acquired and placed in service after January 19, 2025. If the farm claims it for the example combine, the whole US$480,000 comes off the return in the first year and nothing comes off afterward, while the combine keeps working. The accountant says whether a given machine qualifies.

That is the right figure for the return and the wrong one for the hour. Iowa State University Extension says tax depreciation is useful for calculating the tax savings that result from a machinery purchase but should not be used to estimate true economic costs. The FAO handbook on farm cost statistics adds that the economic and the tax method provide similar results only by coincidence.

With the tax figure on the sheet, a combine deducted in the first year costs nothing per hour from the second, and the hour looks cheaper than the contractor’s rate for the wrong reason. The same low figure, used to set the lowest price the farm can take, pulls that price too low. Which tax method the farm uses is a question for the accountant, and the article on which tax regime the farm uses shows how to find out. The sheet keeps the figure from the first section.

Which repair cost per hour should you use?

Repairs are the part of the hour that grows with age. Iowa State’s table of accumulated repair costs, taken from an ASABE standard, puts a self-propelled combine at 6% of its list price after 1,500 hours and 25% after 3,000. The box turns those percentages into dollars per hour for the example combine.

A combine in its last 300 hours costs more than four times as much per hour to repair as in its first 1,500. The repair figure that decides whether to replace the machine is therefore the one for next year, not the average of the years behind it.

Tables also disagree with each other. Calcante and co-authors, working from Italian dealers’ and authorized workshops’ databases, put the repairs and maintenance of a self-propelled combine at 23.1% of its price over 3,000 hours, against 40.2% in the American standard model. On the example combine that is US$36.96 an hour in one case and US$64.32 in the other. Iowa State adds that repair costs for a particular type of machine vary widely from one geographic region to another, and that the best data are the farm’s own past repair records.

Those records are usually at the dealer. Ask for the machine’s service history by serial number, add the farm’s own repair invoices, and write the repair cost per hour for each year, one under the other. The column shows whether the curve is rising and which figure to use for next year.

At how many hours a year does the combine beat the custom rate?

The custom rate is a price for the whole job, so the farm’s own combine has to be priced the same way: owning, repairs, fuel and operator. The Kansas survey says its prices include charges for machinery, power, fuel, and the operator. The example adds US$70 an hour for fuel and operator and a pace of 10 acres an hour, so the flat rate of US$34.37 an acre comes to US$343.70 an hour.

The two hours cross between 180 and 210 hours a year, near 206 hours, which is about 2,060 acres. Below that the farm pays more to own the combine than to hire the harvest, and above it the combine costs less. The crossing depends on the repairs: if the dealer’s history shows repairs twice the table’s, it moves to about 243 hours.

The Kansas report warns that its prices should not be regarded as official or established rates and that the state averages may not be typical of any particular locale. Ask the contractor you would really call for a quote, write it on the sheet with the date, and compare it with your own hour. The article on whether an investment pays for itself covers the next purchase.

Which paper do you pull out first?

The purchase invoice of the combine, because its price, year and serial number start the sheet. The sheet takes about three hours, most of it waiting for the dealer’s history. Start with the machine that works the fewest hours: as the first section shows, it carries the highest cost of owning per hour, so it is the likeliest to cost more than hiring.

• Take the purchase invoice for one machine and write its price, the year you bought it and the serial number at the top of the sheet
• Write how many years you plan to keep the machine and what share of the price you expect to sell it for, and beside each number, where it came from
• Find the hour-meter reading at the start and at the end of the last year, in your notes or the service records, and write the difference as the year’s hours
• Add the year’s depreciation to the interest on the money tied up in the machine, at a rate you choose, and divide by the year’s hours
• Ask the dealer for the machine’s service history by serial number, add the farm’s own repair invoices, and write the repair cost per hour for each year, one under the other
• Add the fuel and the operator to your hour, write beside it what a contractor in your area charges for the same work, then date and sign the sheet

One sheet per machine belongs to how a farm is run; see farm management, and the finance articles for the questions next to this one.