Capital Investment Calculator

Repairs & Maintenance Rates

ASABE EP496 — the American Society of Agricultural and Biological Engineers' machinery cost standard — estimates lifetime repair and maintenance costs as a percent of purchase price per year:

• Tractors: 3–5% (2WD runs higher, MFWD lower)
• Combines & SP forage harvesters: 4–6%
• Planters & drills: 5–7%
• Sprayers: 6–8%
• Tillage & hay equipment: 5–10%
• Grain bins, dryers, buildings: 1–2%
• Drainage tile, fence, permanent improvements: 0–1%

Early years run lower than these averages; late-life years run higher. The number also scales with use — a tractor at 800 hrs/yr costs less annually than one at 1,500 hrs/yr.

Insurance Cost

Covers physical damage to the asset plus liability exposure while it's in use or storage. Typical annual cost as a percent of purchase price:

• Self-propelled equipment (tractors, combines, sprayers): 0.6–1.0%
• Towed equipment (planters, tillage, drills): 0.4–0.7%
• Grain bins & buildings: 0.5–0.8%
• Drainage tile, buried improvements: typically uninsured (0%)

Rates vary with deductible, stated value vs. actual cash value, and whether the asset is financed (lenders typically require coverage). Check your farm policy declarations page for the actual current cost. Most Iowa State and Purdue extension budgets use 0.7% as a working default.

Taxes & Housing

This line captures three things that are easy to overlook:

• Property & personal property tax — Varies widely by state. Kentucky assesses farm machinery at a reduced rate (roughly 0.1–0.3% of value in Christian County). Iowa exempts farm equipment entirely; other states run higher.
• Registration & license fees — Minimal for most equipment, but real for over-the-road trucks, trailers, and service vehicles.
• Housing — The opportunity cost of storing the asset under cover. ASABE EP496 estimates housing at roughly 0.75–1.0% of purchase price per year, reflecting the building space, insurance, and maintenance allocated to that piece of equipment.

Combined, 1.0–1.5% is the standard extension budget assumption. Drop it to 0.2–0.3% for assets that live outside or are buildings themselves (can't house a building in a building).

Fuel & Energy

Set to $0 for non-powered investments like drainage tile, fence, grain bins (if you're not counting aeration/drying energy separately), or buildings.

For powered equipment, ASABE EP496 estimates fuel consumption using load-adjusted PTO horsepower:

• Diesel tractor: ~0.044 gal per PTO hp-hour at full load. A 250 hp tractor running 600 hrs/yr at 70% load burns roughly 4,600 gal/yr.
• Combine: Typically 6–10 gal/hr during harvest.
• Grain dryer: LP or natural gas — roughly 0.02 gal LP per bushel per point of moisture removed.
• Irrigation pump: Electric or diesel — depends heavily on lift and run hours.

Lubricants are conventionally estimated at 15% of fuel cost and should be folded into this number. At $3.50/gal diesel, the $8,000 default represents roughly 2,000 gallons of total fuel + lube equivalent — a typical annual figure for a mid-size tractor or combine.