Classifying the state's farms by size indicates the relationship between machinery costs and acreage. This can be seen when dividing farms into profit categories. Much of this difference, Schnitkey added, is due to machinery management practices on farms. Differences im machinery costs consistently separate more profitable from less profitable farms. This suggests that average' custom rates do not cover the full costs of machinery operation and ownership.
Some farmers undertake custom farming to spread machinery costs over more acres.
This may be an appropriate strategy if excess machine capacity exists on a farm. However, per acre machinery costs over different farm sizes do not support this strategy. Per acre machinery costs for larger farm sizes do not decrease enough to cause this strategy to be profitable.