What does your Tractor cost you per hour of operation.

[MMfrompa]

Hi all, I'm putting a video together for my you tube channel and the title is "Can you make money selling firewood" only reason I'm wasting my time doing so is because someone told me you can't make money selling firewood, and I'm going to prove a point lol. Anyway I have been videoing my process and putting numbers to hours for an honest evaluation. I'm factoring in fuel, chainsaw, chains, log splitter, tractor, side x side and labor (everything I use) My tractor is a Kubota L3901 and here is how I figured my hourly cost. Please chime in with your thoughts.
L3901 with Loader Purchase Price $23,500.00
Value if I trade it with 1200 hrs $12,500.00???
Ownership Cost Per hour would be 23,500 - 12,500 = 11,000 and divide that by the the 1200 hours at Trade and you get $9.16 per hour ownership cost
Then I added 4 dollars per hour for maintenance so every 100 hours thats $400.00 dollars for servicing and other things that may arise
I also added $4.00 per hour for fuel and I'm not even sure what my Tractor burns an hour but I think a gallon per hour is close.

So in review.
Ownership Cost Per Hour $9.16
Maintenance Cost Per Hour $4.00
Fuel Cost Per Hour $4.00

Total Cost Per Hour $17.16 Per Hour

What are your thoughts?

 

[PJSprog]

I think you're already making too many unsubstantiated guesstimates to get an accurate number.
"Then I added 4 dollars per hour for maintenance" - whence came this number?
"I'm not even sure what my Tractor burns an hour" - this should be easy enough to quantify.

You also mentioned labor and other equipment, yet those appear to be excluded from your final tally.

 

[MMfrompa]

I think you're already making too many unsubstantiated guesstimates to get an accurate number.
"Then I added 4 dollars per hour for maintenance" - whence came this number?
"I'm not even sure what my Tractor burns an hour" - this should be easy enough to quantify.

You also mentioned labor and other equipment, yet those appear to be excluded from your final tally.

The labor and other equipment is not included in this thread. This is a tractor forum so I asked about the Tractor. The 4 bucks per hour maintenance is based on buying oil, filters, grease and general maintenance items. I really don't know the fuel consumption and was hoping someone had an idea but apparently you don't know either lol

 

[TheMan419]

Not sure that the $4.00 per hour of operation for maintenance is accurate. However you are on the right thought process to get the number.

Fuel burn you should know by what you use in a day. If I am out running the bush hog my tractor burns just under a gallon per hour..... with waist high weeds on flat ground, the way I drive it etc.

 

[PJSprog]

I really don't know the fuel consumption and was hoping someone had an idea but apparently you don't know either lol

Nope. I've never owned an L3901. Sorry.

Another potential issue is your determination to "prove a point." Makes it tough to be objective when you go in with a strongly set idea. Maybe just collect the data and see what it tells you. Whoever told you that may end up being right.

 

[ning]

I worked up a similar spreadsheet to be able to accurately describe the cost of driving our cars & trucks, for a variety of reasons.
While most of the values are guesses, I've tried to be close by checking records or figuring out how much things cost today. Specific things on the list are similar to your list:

• Fuel costs (mpg)
• Oil change cost (varies some by vehicle; my truck takes 14 quarts)
• Tires (cost for new set vs miles)
• Estimated repairs over the next 10,000mi (based on guesses as to what it may need for the age of the vehicle, etc)
• Estimated depreciation for 10,000mi (not time - I'll have the car during that time regardless so the only issue is how much does putting mileage on the vehicle cost)
• Other required gear cost (motorcycle gloves wear out pretty predictably, and helmets need to be replaced more due to use than time, though time has some effect as well)

It's definitely a useful exercise, even if it's only ballpark. I first did this when a beancounter at an old job balked at giving me the IRS rate for mileage reimbursement, instead trying to arbitrarily choose a value based on what he thought operating a car cost. The depreciation really drives up the cost in many cases.

For what it's worth, when diesel was substantially cheaper out here (California has high fuel costs, and quite often diesel is more expensive than super), my truck with ~14mpg was cheaper to drive by my estimates than our 30mpg compact (its low mpg being partially offset by cheaper fuel, but primarily the lower cost was because the truck is 20 years old and has higher miles already and isn't going to depreciate much!).

Having this sort of information is useful when it's time to do things like rent a truck to move someone (showing that a rental may actually be cheaper than driving), decide if it's cheaper to fly or drive (around here, it's typically a wash for me to fly vs drive for one person - and if you're only flying 400 miles, it's probably not much different time-wise either factoring in parking (costs $ too) time and sitting around waiting for a plane and pickup).

I can see doing this for a tractor being good in that it's good to know that "every hour I'm using isn't free, make it worth it".
Don't forget the cost of tires - figure new cost, divided by life span; it's probably a decent chunk of a dollar per hour.

 

[jeff9366]

I have a Kubota L3560. Purchase price $27,500.

I grease the tractor. I fuel the tractor. My Kubota dealer collects/returns the tractor and performs all other maintenance and repairs. I am charged $50 transportation as part of each service.

I have bent several bits. Brush has ripped loose the HST electrical connections twice~~that area is now shielded.

My Kubota service/repair bills were $1,300 last year. (Mechanic = $70/hour.)

Fuel is $2.00 per hour, + $1.00 per hour when PTO is powering an implement.

I have KTAC insurance @ $1.25 per hour. One insured repair = $250 deductible.

I calculate tractor depreciation at $10 per operating hour, based on low tractor hours (750 hours) previous tractor ownership and subsequent sales. My tractor is a hobby. Cannot claim depreciation deduction when doing my taxes.

I have an umbrella policy for $2,000,000 on my homeowners to at least partially cover me in case burn pile escapes me, within my residential development. $1.50 per hour.

I have about $20,000 in implements.

I believe my tractor operating cost is $30 per hour plus $5 an hour for implements. Undoubtedly higher than most due to dealer transporting tractor and performing all but most basic maintenance.

Cheaper than operating the progression of small boats I used to own.

 

[smstonypoint]

Various ag. economics departments have publications that describe the process for estimating machinery costs. Here's one from Iowa State:Estimating Farm Machinery Costs | Ag Decision Maker. Note that economists, unlike accountants, include opportunity costs.

Steve

 

[StuartDK45SE]

Missing is your cost to hire someone out to do what you are doing. That is why most of us have tractors in the first place because we have tasks that need to get did . These tasks are either by choice, ie the lifestyle we choose to live or a business or a mix of the two.

 

[adventure bob]

Your estimate for cost of ownership per hour should not be based on trade in value... It should be based on tax depreciated value. Theres a couple of ways to do it and each has its advantages and impacts on the value.

 

[dodge man]

I've kind of guesstimated my BX2350 at about $15 per hour. That includes fuel and maintance. I'd say just as a wild estimate, your $17 per hour isn't to bad.

 

[smstonypoint]

Your estimate for cost of ownership per hour should not be based on trade in value... It should be based on tax depreciated value. Theres a couple of ways to do it and each has its advantages and impacts on the value.

????

Tax-based depreciation is relevant in the calculation of the after-tax cash flows required to compute the net present value of the acquisition of a durable asset (e.g., a tractor), but is irrelevant for computing ownership costs.

Steve

 

[ovrszd]

I don't think you'll truly know what it costs per hour until you sell/trade the machine.

But for the sake of discussion it's interesting to hear opinions. Most are too low.

I paid $41,500 for my Kubota. It's now 4 1/2 years old with 1200ish hours on the clock. If I was to trade it on a new one I'd probably get around $33,000 for it. Might be able to sell it outright for $35,000 if I was very, very patient. So, it's cost me $8,500 in depreciation alone, or, $7 per hour. That number gets smaller as I go along assuming I keep the machine in good working condition.

There are some members here on TBN that can give you a real world answer.

 

[MMfrompa]

I don't think you'll truly know what it costs per hour until you sell/trade the machine.

But for the sake of discussion it's interesting to hear opinions. Most are too low.

I paid $41,500 for my Kubota. It's now 4 1/2 years old with 1200ish hours on the clock. If I was to trade it on a new one I'd probably get around $33,000 for it. Might be able to sell it outright for $35,000 if I was very, very patient. So, it's cost me $8,500 in depreciation alone, or, $7 per hour. That number gets smaller as I go along assuming I keep the machine in good working condition.

There are some members here on TBN that can give you a real world answer.

I think you nailed it, there is no exact answer only estimates. Also, a lot depends on how well you take care of machine. You will get more for it if it's well taken care of therefore you will get more when you sell or trade lowering your overall ownership cost per hour.

 

[mike69440]

I have put at least 6500 Hours on my various equipment over the last 12 years.
I do 85% of the repairs myself, otherwise I could never afford these toys.
The B7200 was the least expensive to run. Sold it for what I paid for it, and over its life a few thousand in repairs, then Oil and fuel.

The L39 has over 2000 hours and repair cost I'm guessing have be $10K. A lot of the mods were done as favors or I did them myself.

The Excavator I've put on a bit less than 1500 Hours and it has cost me a bit over $12K for repairs and add ons like new bucket, hydraulic thumb, Cylinder repairs. Valve repairs, etc.

The RTV900 has 1500 hours. I figure $3000 for repairs All and all very dependable. I'm shocked how much we use it!

The Max28 is new, sort of. (Bought just before New Years 2014) Not much for repairs and maintenance in 200 hours, but I've done Mods and attachments so figure $2500

Rough guess maybe $115,000 to buy all the toys and attachments.

Figure at least a Gallon per hour for fuel.
So anyone want to figure what all this cost. I don't have the stomach to come up up a number.

$25/hr would not surprise me.
Replacement cost would be crazy, as everything runs decent, if fact the Max28 & L39 are stronger than brand new replacements.

 

[MossRoad]

That's hard to put an exact cost on.

Purchase price + shipping + fuel + oil + filters + batteries (3 over 16 years) + repairs + lubricants + tires (I've replaced 1) (+ insurance for some folks), and + anything I missed all added up. Then subtract what you could get for the tractor if you sold it at the time of the calculation and divide that total by the number of hours put on the machine and that's how much it cost you per hour to operate it.....

EXCEPT FOR YOUR LABOR! That's the most expensive part. What do you value your time at?

Several years ago after we started heating with wood instead of natural gas, I determined that I spend:
1 day dropping trees.
1 day dragging them out of the woods.
5 days cutting them up and hauling them home.
5 days splitting and stacking.
1 day over the course of the winter hauling them from the stack into the house.
13 days total spent on firewood handling.

13 days X 8 hours per workday = 104 hours.
104 hours X the value of my labor = ???

104 X $7.50 (minimum wagish) = $780.

Our winter natural gas bills are about $800 for six months (includes hot water, stove and furnace).
By heating with wood, I was able to cut it down to about $35 per month for six months, so $210.

$800 - $210 = $590.

I save $590 per year by heating with wood when I could work a minimum wage job and earn $780 in the same amount of days.... $190 MORE!!!

And that includes NONE of my tractor, chainsaw, gas, oil, trailer, truck, insurance, plates, taxes, wear, tear, etc... NONE!

And my splitter was given to me FREE!

I put a new motor on it this year (it was 30 years old) and that was another $100 (Harbor Freight... works great!).

Plus the cost of the woodburner, chimney and installation!

But, most of that isn't related to your question.

You'd have to sell a heck of a lot of wood and have a very efficient operation (way more efficient than the average home owner) just to cover the costs of the equipment needed and labor.

Most places that sell firewood around here are tree services. They already have the equipment and on days when there's no trees to drop, their labor guy makes firewood. And none of them have a tractor! :laughing: Pretty much all have tracked skidsteers.

 

[TheeKb]

????

Tax-based depreciation is relevant in the calculation of the after-tax cash flows required to compute the net present value of the acquisition of a durable asset (e.g., a tractor), but is irrelevant for computing ownership costs.

Steve

First Reggie Watts style response I've read on a forum... I LIKE IT!

 

[smstonypoint]

First Reggie Watts style response I've read on a forum... I LIKE IT!

I had never heard of Reggie Watts, so I had to resort to Google: Reggie Watts - Wikipedia. Having done so, I am confused: I don't whether to interpret your comment as a compliment or as an insult.

Steve

 

[CajunRider]

Between my naivete, crooked sellers, crooked repair dealers, hurricanes and salty flood water, my cost of ownership is $42.15/hr based on my hours and actual cost receipts (except for the fuel that I didn't tally up the receipts and estimated instead). That astoundingly high number sometime depresses me. Operating my tractor is always an adventure that involve breakdowns lurking at every corner. Yeah, yeah, I know I know about maintenance etc but there is only so much a man can do with all other things going on.

Yet with all that, I enjoy every seat hour. I figure that from now on every hour of operation is a bonus that will drive that cost number down. When the tractor finally breaks for good, I will lovingly give it a welcome rest at my friend's scrap metal yard. Any tractor that has moved pieces 3 broken houses and 33 thousand cubic yards of hurricane debris has earned its keep.

 

[Texasmark]

I think you nailed it, there is no exact answer only estimates. Also, a lot depends on how well you take care of machine. You will get more for it if it's well taken care of therefore you will get more when you sell or trade lowering your overall ownership cost per hour.

+1............. no way of knowing. It's like you need it or you don't. Get what you need and use it whatever it costs.