Machinery Cost Estimate for Machinery Cost Estimate for Cranberry Boom SprayerCranberry Boom Sprayer

Make assumptions for “Typical” GrowerMake assumptions for “Typical” Grower 90’ boom sprayer pulled by 100 HP 90’ boom sprayer pulled by 100 HP

tractortractor Machinery Cost CategoriesMachinery Cost Categories

Fixed: depreciation, capital (interest) costFixed: depreciation, capital (interest) cost(pay whether use sprayer or not)(pay whether use sprayer or not)

Variable: labor, repairs/maintenance, fuel/lubeVariable: labor, repairs/maintenance, fuel/lube(pay per hour or acre of use)(pay per hour or acre of use)

Fixed costs spread over average acres Fixed costs spread over average acres machinery used on each yearmachinery used on each year

DepreciationDepreciation Straight line depreciation over 15 yrsStraight line depreciation over 15 yrs

(Price new – Price after 15 yrs) / 15(Price new – Price after 15 yrs) / 15 Sprayer: (55,000 - 40,000)/15 = $1000/yrSprayer: (55,000 - 40,000)/15 = $1000/yr Tractor: (60,000 - 10,000)/15 = $3333/yrTractor: (60,000 - 10,000)/15 = $3333/yr Spread over annual useSpread 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/(30 x 14) = $2.38/ac$1000/(60 x 14) = $1.19/ac$1000/(60 x 14) = $1.19/ac$1000/(90 x 14) = $0.79/ac$1000/(90 x 14) = $0.79/ac

Tractor: 500 hr/yr: $3333/500 = $6.67/hr, at Tractor: 500 hr/yr: $3333/500 = $6.67/hr, at a spray rate of 7.5 ac/hr: $6.67/7.5 = a spray rate of 7.5 ac/hr: $6.67/7.5 = $0.89/ac$0.89/ac

Interest CostInterest Cost Average Machinery Value at 6% rateAverage Machinery Value at 6% rate Sprayer: ½(55,000-40,000) x 6% = $2850/yrSprayer: ½(55,000-40,000) x 6% = $2850/yr Tractor: ½(60,000-10,000) x 6% = $2100/yrTractor: ½(60,000-10,000) x 6% = $2100/yr Spread over annual use as beforeSpread 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/(30 x 14) = $6.79/ac$2850/(60 x 14) = $3.39/ac$2850/(60 x 14) = $3.39/ac$2850/(90 x 14) = $2.26/ac$2850/(90 x 14) = $2.26/ac

Tractor: 500 hr/yr: $2100/500 = $4.20/hr, at Tractor: 500 hr/yr: $2100/500 = $4.20/hr, at a spray rate of 7.5 ac/hr: $4.20/7.5 = a spray rate of 7.5 ac/hr: $4.20/7.5 = $0.56/ac$0.56/ac

LaborLabor

Part Time Hired Labor at $10.00/hr, Part Time Hired Labor at $10.00/hr, 7.7% benefits rate, and 7.5 ac/hr = 7.7% benefits rate, and 7.5 ac/hr = $1.44/ac$1.44/ac

Owner/Operator Management Time: Owner/Operator Management Time: $15.00/hr, 7.7% benefits rate, 7.5 $15.00/hr, 7.7% benefits rate, 7.5 ac/hr, with 10% overhead on time ac/hr, with 10% overhead on time (extra time to manage part time (extra time to manage part time help) = $2.61/achelp) = $2.61/ac

Repairs/MaintenanceRepairs/Maintenance

Purchase price x repair factor (%) per Purchase price x repair factor (%) per hour of use from Ag Engineeringhour of use from Ag Engineering

Sprayer: varies with acres since hours Sprayer: varies with acres since hours used increases (assume 14 trips/yr):used increases (assume 14 trips/yr):

30 ac: $0.13/ac30 ac: $0.13/ac60 ac: $0.06/ac60 ac: $0.06/ac90 ac: $0.04/ac90 ac: $0.04/ac

Tractor 500 hr/yr, $3.08/hr for $0.45/acTractor 500 hr/yr, $3.08/hr for $0.45/ac

Fuel/LubeFuel/Lube

Diesel: $1.80/galDiesel: $1.80/gal 100 HP tractor uses 4.38 gal/hr100 HP tractor uses 4.38 gal/hr Lubrication: 15% of fuel costLubrication: 15% of fuel cost Assume 10% overhead (time to Assume 10% overhead (time to

fuel/lube), plus 7.5 ac/hr spray ratefuel/lube), plus 7.5 ac/hr spray rate Final: $1.33/ac for tractor fuel/lubeFinal: $1.33/ac for tractor fuel/lube

Put it all togetherPut it all togetherCategory Sprayer Tractor TotalDepreciation 2.38 0.89 3.27Interest 6.79 0.56 7.35Labor 1.44 2.61 4.04Fuel/Lube 0.00 1.33 1.33Repairs/Maint 0.13 0.45 0.58Total 10.73 5.84 16.57

Category Sprayer Tractor TotalDepreciation 1.19 0.89 2.08Interest 3.39 0.56 3.95Labor 1.44 2.61 4.04Fuel/Lube 0.00 1.33 1.33Repairs/Maint 0.06 0.45 0.52Total 6.08 5.84 11.92

Category Sprayer Tractor TotalDepreciation 0.79 0.89 1.68Interest 2.26 0.56 2.82Labor 1.44 2.61 4.04Fuel/Lube 0.00 1.33 1.33Repairs/Maint 0.04 0.45 0.49Total 4.53 5.84 10.37

30 acres

60 acres

90 acres

Graphical VersionGraphical Version

0

5

10

15

20

25

30

35

40

0 20 40 60 80 100 120 140 160 180

Cranberry Acres

Ma

ch

ine

ry C

os

t ($

/ac

)

SummarySummary Machinery cost for applying fertilizer Machinery cost for applying fertilizer

ranges $10-$20/ac, with larger costs ranges $10-$20/ac, with larger costs for smaller farms since spread for smaller farms since spread depreciation and interest costs over depreciation and interest costs over fewer acresfewer acres

Analysis based on several assumptions, Analysis based on several assumptions, if want results for different if want results for different assumptions, contact assumptions, contact

Dr. Paul D. Mitchell, Ag and Applied Dr. Paul D. Mitchell, Ag and Applied Economics/UWEX pdmitchell@wisc.edu, Economics/UWEX pdmitchell@wisc.edu, (608) 265-6514(608) 265-6514