AMES, Iowa -- With prices for diesel fuel up 50 percent or more from over a year ago, farm custom rates have begun to creep upwards as well.

"Our recently completed survey of custom rates paid or charged by Iowa farmers showed small but consistent increases in nearly every operation," said William Edwards, Iowa State University (ISU) Extension economist. He said that most operations showed increases of two to eight percent over the 2004 average rate, with five percent being about the average change. Tillage operations showed higher percentage increases than harvesting, since fuel is a larger portion of the total cost for tillage.

Edwards says that while the price of diesel fuel has the most immediate impact on a custom operator's costs, prices for both new and used machinery have jumped significantly, as well. This is due in part to higher prices for steel, but also to a strong demand for machinery purchases. Farm income has been relatively good the past two years, and the limits for first-year deductions of machinery purchases have been raised by the IRS.

The Iowa Farm Custom Rate Survey sampled 185 farmers, custom operators, farm managers and lenders. Respondents were asked what they expected to pay or charge for various operations in 2005. Rates may vary from the average based on timeliness, size and shape of the fields, condition of the crop, quality of the machine and skill of the operator. The 2005 Iowa Farm Custom Rate Survey (FM 1698) includes average values and ranges reported.

It is available on the Web at http://www.extension.iastate.edu/publications/FM1698.pdf, through any ISU Extension county office, by calling the ISU Extension Distribution Center at (515) 294-5247 or visiting the online store at https://www.extension.iastate.edu/store/.