Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Break-even acres to own
2,611
Annual fixed ownership cost
$47,000
Annual depreciation
$24,000
Annual interest/opportunity cost
$14,000
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How to use this
- 1Enter equipment purchase price ($).
- 2Enter useful life (years).
- 3Enter salvage value (% of purchase).
- 4Enter financing/opportunity rate (%).
- 5Enter annual insurance + repairs ($).
- 6Enter owner's fuel/labor cost ($/acre).
- 7Enter custom hire rate ($/acre).
- 8Read your break-even acres to own on the right — it updates as you type.
- 9Hit Share to keep the scenario or send it to someone.
About this calculator
Owning a combine, planter, or sprayer only makes financial sense above a certain acreage where the fixed ownership cost gets spread thin enough to beat what a custom operator charges per acre. This calculator compares annual ownership cost (depreciation, interest, insurance, and repairs) plus your own operating cost per acre, against a flat custom hire rate, and solves for the breakeven acres where the two lines cross. Below that acreage, custom hire is cheaper even though it feels like you're not building equity in iron; above it, ownership wins even after accounting for the fact that owned equipment sits idle part of the year. This is the same math custom operators use in reverse to price their services.
Worked example
Using the values the calculator loads with:
Inputs
- Equipment purchase price: 320000 $
- Useful life: 10 years
- Salvage value: 25 % of purchase
- Financing/opportunity rate: 7 %
- Annual insurance + repairs: 9000 $
- Owner's fuel/labor cost: 14 $/acre
- Custom hire rate: 32 $/acre
Results
- Break-even acres to own: 2,611
- Annual fixed ownership cost: $47,000
- Annual depreciation: $24,000
- Annual interest/opportunity cost: $14,000
What each field means
Inputs
- Equipment purchase price ($)
- The equipment purchase price used in the calculation, measured in $. Starts at 320000 $ so you have a working example on load.
- Useful life (years)
- The useful life used in the calculation, measured in years. Starts at 10 years so you have a working example on load. Accepted range: 3–25 years.
- Salvage value (% of purchase)
- The salvage value used in the calculation, measured in % of purchase. Starts at 25 % of purchase so you have a working example on load. Accepted range: 0–60 % of purchase.
- Financing/opportunity rate (%)
- The financing/opportunity rate used in the calculation, measured in %. Starts at 7 % so you have a working example on load. Accepted range: 0–15 %.
- Annual insurance + repairs ($)
- The annual insurance + repairs used in the calculation, measured in $. Starts at 9000 $ so you have a working example on load.
- Owner's fuel/labor cost ($/acre)
- The owner's fuel/labor cost used in the calculation, measured in $/acre. Starts at 14 $/acre so you have a working example on load.
- Custom hire rate ($/acre)
- The custom hire rate used in the calculation, measured in $/acre. Starts at 32 $/acre so you have a working example on load.
Results
- Break-even acres to own
- Returned as a whole number and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual fixed ownership cost
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual depreciation
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual interest/opportunity cost
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Should I include my own labor cost in owner operating cost?
Yes, put a real wage on your time even if you're not paying yourself a check. Custom hire rates already have the operator's labor baked in, so leaving your own labor out understates ownership cost and makes owning look artificially cheaper than it is.
Does this model account for timeliness value?
No, it's pure cost comparison. Owning equipment gives you control over planting and harvest timing, which has real yield value in years when custom operators are backed up during a tight weather window — that benefit isn't captured here and should be weighed separately.
What if my acreage is close to the breakeven number?
Consider a middle path: partnering with a neighbor to share ownership and split fixed costs, or leasing equipment for the season instead of buying outright. Both can push the effective breakeven acreage down without full ownership commitment.
How much does financing rate change the answer?
A lot on expensive equipment. Moving from a 5% to 9% interest/opportunity rate on a $300,000 combine adds roughly $6,000+ a year in cost, which on a typical custom rate spread can shift breakeven acreage by several hundred acres.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Farm Equipment Own vs Custom Hire Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/farm-equipment-own-vs-custom-hire
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/farm-equipment-own-vs-custom-hire" target="_blank" rel="noopener">Farm Equipment Own vs Custom Hire Calculator — RevenueLab</a> (2026).</p>
Source: [Farm Equipment Own vs Custom Hire Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/farm-equipment-own-vs-custom-hire) (2026).