Custom Hire vs Own Equipment Calculator

How the custom hire vs own equipment calculator works

Ownership cost equals the full annual fixed commitment plus acres times variable cost per acre. Custom cost equals acres times the entered comparable rate. The signed ownership saving is custom cost less ownership cost.

Continuous equal-cost acreage is fixed cost divided by the custom-minus-own variable rate when the resulting intersection is nonnegative. It uses unrounded cost lines, so it is not an exact cent-rounded winning threshold.

Fixed ownership cost remains at zero acres. Quotes must include equivalent fuel, labor, transport, operation and machine scope. Timeliness, availability, employment terms, financing cash flow and tax treatment are outside this comparison.

Worked example

For 500 acres, $15,000 fixed plus $30/acre is $30,000. Custom work at $75/acre is $37,500, making ownership $7,500 lower. At 1,000 acres, ownership is $45,000 versus $75,000, a $30,000 difference.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• Iowa State Extension: machinery economic ownership and operating cost