per unit cost for that farm to perform the desired operation. However, this method does not take
into account cost information from the farm.
The second option can be used if the producer wants to predict a more accurate field
operation estimate for their operation. It takes into account farm specific information about the
number of units on which each operation was performed during a time period (e.g., one year),
and the crop machinery costs for that same time period to prorate whole farm machinery costs to
a specific operation. The following seven step process will allow a producer to estimate per unit
costs of performing field operations based on his or her actual farm costs.
1. Estimate expected per unit machinery costs
2. Estimate expected crop machinery costs for each field operation
3. Estimate expected aggregate crop machinery costs
4. Estimate the field operation percentages
5. Find actual aggregate crop machinery costs
6. Find prorated actual field operation costs
7. Find actual per unit machinery costs
Step one, estimating expected per unit machinery costs, is the same process that is
described as the first option of estimating per unit machinery costs. This provides the producer
with the expected cost per unit to perform that operation.
Step two, estimating expected crop machinery costs for each field operation, is the
product of the estimated expected per unit machinery costs, step one, and the number of units
(acres, tons, bales, etc.) on which that operation was performed. This represents the expected
cost for the farm to perform the operation of interest during the time period over the number of
units that operation was performed.
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