When questions arise regarding what to charge or pay for custom work done on Iowa farms, many look to the ISU Custom Rate Survey for guidance. However, the range in age of equipment, size, and custom services being provided across the state is vast. The survey encompasses a range of custom operators, from producers who provide a small amount of custom work as it fits their labor and machinery capacity to full-time custom operators who do nothing but custom work for others. On the other side, there are farms that hire custom work for one or two tasks on the operation to those who hire all field work from custom operators.
The original news release for the 2026 ISU custom rate survey addresses fuel costs within the overall cost for operating machinery. As the 2026 harvest season approaches, fuel costs have increased significantly from when the survey was sent out in early February 2026. Custom operators and those who hire custom work done need to be cognizant of what machinery costs truly are. As fuel prices have continued to climb, it warrants taking another look at what harvest costs will be compared to previous years (Figure 1).
The Decision Tool Fuel, Fertilizer, and Grain Price Historical Comparisons tracks historical fuel prices using data from the USDA AMS Iowa Production Cost Report and other sources. Diesel fuel price was estimated at $2.89 per gallon when invitations to complete the custom rate survey were sent in early February 2026. The most recent AMS report for September lists $5.50 per gallon for the average farm diesel price, with a range of $5.44–$5.60. That is a 90% increase from February to September in fuel costs.
In recent weeks crop prices have risen. However, using the five-year average of USDA monthly marketing data, approximately 12% of the previous year’s corn crop remains unsold in July, and 7% of the soybean crop is all that remains to capture any increase in prices that occur in late July and August. To restate, crop prices may have increased, but Iowa farmers didn’t have much left in their bins to capture late season higher crop prices to combat the higher fuel inputs they are purchasing now.
How does this impact machinery costs and custom rates?
A $0.50-per-gallon increase in fuel prices will raise total machinery costs by approximately 5%. Depending on the operation, custom rates as compared to the spring 2026 custom rate survey may be 12-17% higher for higher fuel use operations or 7-12% higher for lower fuel use operations. The examples that follow are meant to demonstrate the impact fuel costs alone have on equipment. Custom operators should calculate their actual costs for owning and operating equipment.
Examples
Using the Ag Decision Maker Machinery Cost Calculator, a combine with ownership and operating costs of $46.36 per acre when fuel is $2.89 increases to $49.88 per acre when fuel costs $4.68 per gallon and $51.39 per acre with fuel at $5.45 per gallon, 8% and 11% increases, respectively.
Those figures reflect only the combine. Additional costs would include the tractor with a grain cart or wagons, as well as grain trucks or semi-trucks hauling grain to the farm or another delivery point. Higher fuel prices impact not only field operations, but also the cost to move grain, transport repair parts and equipment, and every other trip on the farm. The indirect fuel costs are causing increases in other needed purchases in the fall as well.
Using the Ag Decision Maker Grain Truck Transportation Cost Calculator, a semi with total ownership and operating costs of $0.13 per bushel at $2.89 per gallon would likely experience a 13% increase in total costs at $4.68 per gallon and 18% higher costs at $5.45 per gallon.
Another way to adjust custom rates is to use Fuel Required for Field Operations which contains estimated fuel consumption values per acre for many common operations (or actual fuel usage for the operations). Multiplying the fuel used per acre by the change in fuel price since the survey was conducted can provide an estimate of the additional cost per acre (i.e., for every gallon used per acre, increase the custom rate by $1.79 based on the projected price of $2.89 when the survey was done and the $4.68 average Iowa diesel price in August).
What can machinery operators do?
Custom operators should record their actual fuel consumption and purchase prices so they can calculate a fair charge to their customers. Going into harvest, some custom operators may have a base rate plus actual fuel costs or the person hiring the work done may provide the fuel from their own supplies. Discussions around harvest costs are already occurring. Custom operators should be open in communicating expenses and the impact fuel prices have on custom rates.
All producers should consider what machinery operations done in the fall are essential, and where they could reduce transportation or field practices to help manage the increased costs they will likely experience this harvest season.
Any custom rate needs to cover operating and ownership costs over the custom acres. Additional resources on machinery operations can be found on the Ag Decision Maker website. The Excel Decision Tools have web-based options for those who do not have or want to use Microsoft Excel. The web-based calculator does not capture or save any information entered in it.
A new information file on the Ag Decision Maker website Fuel-Saving Strategies for Iowa Corn and Soybean Producers offers guidance, and a Decision Tool to analyze fuel savings. With fuel reaching record levels, small changes can add up.
Links to this article are strongly encouraged, and this article may be republished without further permission if published as written and if credit is given to the author, Integrated Crop Management News, and Iowa State University Extension and Outreach. If this article is to be used in any other manner, permission from the author is required. This article was originally published on September 14, 2026. The information contained within may not be the most current and accurate depending on when it is accessed.