Takeaways
- Every 50-cent boost in diesel prices likely leads to a 5% increase in custom rates.
- Based on a diesel price of $5.50 per gallon, look for an additional $1.50 for custom rates reported in the Iowa farm custom rate study for no-till and strip-till items.
- The 2026 Iowa farm custom rate survey was completed prior to the Iran conflict.
Earlier this year, 205 custom operators and farm managers in Iowa responded to the annual Iowa farm custom rate survey that is coordinated by Iowa State University ag economists. They submitted nearly 4,700 expected custom farm rates for various farm operations.
The survey provides “average” and “median” custom rates, as well as a range, or various tillage, planting, fertilizer and chemical application, grain harvesting and forage harvesting. These custom rates include fuel, labor, repairs, depreciation, insurance and interest.
Commonly used in custom rate negotiations, the “median” rate means half of the reported rates were higher and the other half were lower than the average rate.
Custom Work Charges Will Grow 8% in 2026
Based on the survey, data, average custom rates for harvest operations in 2026 were expected to increase by 6.5% from 2025. Average custom rates for tillage, planting and other pre-harvest operations are expected to increase by 8.5%.
This year’s survey was completed prior to the Iran conflict, which may result in custom operators adjusting rates to more fully reflect increases in fuel costs and other expenses.
Add an Extra $1.50 Per Acre
A fascinating aspect of this year’s data is the impact rising diesel prices are having on custom rates. For the 2026 Iowa survey, the average price for diesel fuel was set at only $2.89 per gallon.
The Iran conflict is dramatically boosting farm fuel costs...…
University of Minnesota farm management analyst Kent Thesse says each diesel fuel price increase of 50 cents per gallon will likely cause most custom rates to increase by around 5%. Based on a diesel price today of $5.50 per gallon, this would lead to an increase of $1.50 for the custom rates for these no-till and strip-till items:
- Strip tillage: $23.50 per acre ($15-$30 per acre) (add $6 per acre for anhydrous application.)
- No-till planter: $28.30 per acre ($15-$46 per acre).
- No-till drill: $25 per acre ($14-$28 per acre.)
- Cover crop drill: $19.25 per acre ($9-$25 per acre.)
- Self-propelled sprayer: $10.50 per acre ($6-$20 per acre.)
