The costs and returns shown in this report are averages and should only be used as a guide in decision making. Costs and returns vary from farm to farm because of geographical location, soil types, type and condition of machinery, weed and insect problems, management skills, and other factors. Actual farm records, if available, provide the best source of information for making decisions.
Ownership costs are based on specified amounts of annual use for each machine. Ownership costs tend to be inversely related to amount of use. Consequently, the ownership costs are applicable only to situations where the amount of annual use is the same as that assumed in this report.
Operating costs tend to be constant with respect to use. It costs a certain amount for repairs, fuel, etc., per hour or per acre regardless of the total amount of use. Since per unit operating costs do not vary with size of farm, they can be applied to any farm using similar equipment under similar conditions.
This cost-return report may be helpful:
In selecting enterprises and crop rotations which will yield the highest return to the farmer’s resources.
In determining rental shares each party is making to a farm business. Each party’s contributions may consist of a combination of production costs, capital investment, and labor.
In making up cash flow budgets.
IIn estimating income necessary to cover costs when one is considering future investments.