Farm Machinery Cost Calculator — Tractor Cost per Hour and per Hectare
Estimate the full cost of running a tractor or farm machine per hour and per hectare or acre: depreciation, interest, insurance and housing plus fuel, lubrication, repairs and labor (ASABE / Iowa State method).
How it works
Depreciation = (price − salvage) ÷ years · Interest = (price + salvage) ÷ 2 × rate · TIH = (price + salvage) ÷ 2 × TIH% · Ownership per hour = sum ÷ hours per year · Operating per hour = fuel + lubrication (15% of fuel) + repairs + wage × 1.1 · Cost per ha = cost per hour ÷ field capacity · Diesel ≈ 0.044 gal/h per PTO hp (0.223 L/h per kW)
Machinery costs have two parts. Ownership (fixed) costs — depreciation, interest on the money tied up, taxes, insurance and housing — are paid whether the machine works or not, so they fall per hour as annual use rises. Operating (variable) costs — fuel, lubrication, repairs and labor — rise with every hour. Iowa State’s Ag Decision Maker method, based on ASABE standards, prices lubrication at 15% of fuel, labor at 1.1× field hours to cover servicing, and estimates average diesel use at 0.044 gal per maximum PTO horsepower per hour. Dividing the hourly cost by field capacity gives the cost per hectare to compare with custom-hire rates.
Worked example
An $80,000 tractor kept 10 years with a 30% salvage value, used 500 h/year: depreciation $11.20/h, interest at 6% $6.24/h and TIH $1.04/h, so ownership is $18.48/h. Operating: fuel 15 L/h × $1.20 = $18.00, lubrication $2.70, repairs $6.00 and labor $13.20 = $39.90/h. The total is $58.38 per hour; covering 2 ha/h, that is $29.19 per hectare. A 75 kW tractor burns about 16.7 L/h on average.
Sources: Iowa State University Ag Decision Maker — Estimating farm machinery costs (A3-29) · Mississippi State University Extension — Farm machinery cost calculations (P3543)
Frequently asked questions
How do I calculate tractor cost per hour?
Add the ownership costs (depreciation, interest, taxes, insurance, housing) divided by annual hours to the operating costs per hour (fuel, lubrication, repairs and labor). This calculator does both and also divides by field capacity to get cost per hectare or acre.
How much diesel does a tractor use per hour?
On average about 0.044 US gallons per maximum PTO horsepower per hour (Iowa State / ASABE), or roughly 0.22 L per kW. Heavy tillage uses more and light work such as raking much less.
Is it cheaper to own a machine or hire a contractor?
Compare the cost per hectare here with local custom rates. Low annual use makes ownership expensive because fixed costs are spread over few hectares; above a break-even area, owning becomes cheaper.
What repair cost should I use?
Repair costs grow with age and hours. ASABE repair factors put lifetime repairs for tractors at roughly 25–100% of the purchase price depending on hours; for planning, $3–10 per hour for a mid-size tractor is a reasonable starting point.
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Cost estimates depend on your local prices, use and maintenance; check them against your own records before buying or setting custom rates.