A custom hired machine operations provide an opportunity to outsource farm equipment operations if the land base or expected crop yield is not sufficient to justify machine ownership. There are...

A custom hired machine operations provide an opportunity to outsource farm equipment operations if the land base or expected crop yield is not sufficient to justify machine ownership. There are several sources that estimate custom hire rates on the internet. The $235,000 grain combine equipped with a 7.5-m cutting platform from Problem 1 could be purchased to harvest corn for an ethanol plant or the ethanol plant could hire a local farmer to complete the task for $60/ha. Using the information in Tables 4.1 through 4.3, make a case for the correct machinery use decision. What are potential advantages and disadvantages of hiring out machinery operations?