The combines are rolling, the corn is coming off at 22 percent moisture, and every load sitting in the wet bin is losing you money twice: once in shrink and once in the propane bill you will burn to fix it. If you run a drying service — your own tower dryer, a continuous-flow setup, or a row of bin dryers you hire out to neighbors — the difference between a profitable fall and an expensive one comes down to a single number you can compute before harvest starts: your true cost per point of moisture removed, per bushel.
Most custom drying rates in farm country are set by glancing at the elevator's posted charge and shaving a little off. That is backwards. The elevator's charge bundles its drying cost, its shrink policy, and its margin into one number that has nothing to do with your fuel price, your dryer efficiency, or your volume. This guide shows you how to build your drying cost from the ground up, set a rate that survives a wet October, and keep books that make tax season boring.
Why Drying Is a Costing Problem First and a Bookkeeping Problem Second
A drying service sells exactly one product: points of moisture removed from bushels. Everything — your rate sheet, your fuel budget, your repair reserve, your depreciation schedule — hangs off that unit. Get the unit cost right and the bookkeeping is straightforward. Get it wrong and no amount of tidy ledgers will save the season, because you will have sold thousands of bushels of drying below cost before you notice.
The good news is that agricultural economists have already done the hard part. Iowa State's Ag Decision Maker worksheet for estimating corn drying cost breaks the job into five buckets: depreciation and interest on the system, repairs and maintenance, fuel, electricity, and labor plus handling. Work through each one with your own numbers and you have a defensible cost per point per bushel — the anchor for every price you quote.
The Five Cost Buckets Behind Every Point
1. Depreciation and interest on the dryer system
Your dryer is the most expensive thing you own that only works six weeks a year. The honest way to cost it is to convert the whole investment — dryer, augers, wiring, concrete pad, moisture sensors — into an annual payment spread over its useful life, the way you would amortize a loan. A 20- to 25-year useful life is the standard planning assumption for a grain drying system, and the interest rate can be your long-term equipment loan rate or a blend of your borrowing rate and what your equity could earn elsewhere.
Divide that annual payment by the bushels you expect to dry in a year and you have your fixed cost per bushel. Notice what this implies: volume is everything. A dryer that runs 200,000 bushels a fall carries a fraction of the per-bushel fixed cost of the same dryer running 40,000. If you are thinking about taking on custom drying for neighbors, this is the math that tells you whether the extra volume pays for the extra wear.
2. Repairs and maintenance
Dryer maintenance is cheap in a normal year and brutal in a bad one — a burned-out burner, a seized discharge auger, or a leg belt that lets go mid-harvest. For budgeting, North Dakota State extension researchers suggest reserving 3 percent of the system's initial investment cost per year for repairs and maintenance, adjusted up in heavy-use years.
Book it as its own expense line, not buried in a general farm repair account. When you can see three Octobers of dryer repair costs in one ledger account, you can predict the fourth — and you can prove to yourself whether that aging dryer is still cheaper than the payment on a new one.
3. Fuel: the 800-pound line item
Fuel dwarfs every other drying cost, so this bucket deserves the most attention. For high-temperature dryers, Iowa State researchers peg average propane consumption at about 0.018 gallons per point of moisture removed per bushel, with efficient systems near 0.010 and older or poorly managed ones up to 0.025.
Run the arithmetic on your own operation. Take a 1,000-bushel batch dried from 20 percent down to 15 percent — 5 points removed:
- 1,000 bushels × 5 points × 0.018 gallons = 90 gallons of propane
- At a farm-delivered propane price near $2.00 per gallon (USDA market reporters found delivered farm propane averaging just under that in mid-2026), that batch costs about $180 in fuel — 18 cents per bushel, or 3.6 cents per point per bushel.
Now change one variable: an older dryer burning 0.025 gallons per point pushes the same batch to $250. A neighbor with natural gas access may dry it for half your fuel cost. Your rate has to reflect your burner, not anyone else's. Track gallons per point per bushel every season; if the number creeps up, you have a maintenance problem (dirty burners, air leaks, over-drying) masquerading as a fuel-price problem.
4. Electricity for fans and handling
Fans, stirrers, and grain legs all draw power. The same Iowa State research estimates roughly 0.01 kilowatt-hours per point per bushel for high-temperature systems — small next to fuel, but not zero. At 12 cents per kWh, our 1,000-bushel example adds about $6 in electricity. Natural-air bin drying flips the ratio entirely (around 0.33 kWh per point with no fuel), which is why bin-drying operators must cost electricity as carefully as tower operators cost propane.
If your dryer shares a meter with the shop or the house, put it on its own submeter or at least log fan hours. Unallocated electricity is the most common reason drying cost estimates come in low.
5. Labor and handling
Moving grain in and out of the dryer costs roughly a penny a bushel in power and wear. Labor varies widely: a continuous-flow dryer with moisture sensing mostly babysits itself, while a batch dryer needs someone checking it around the clock during a wet harvest. Estimate it honestly — hourly wage divided by bushels dried per hour, times the share of drying time that actually needs a person — and resist the temptation to value your own midnight dryer checks at zero. If you would pay a hired hand $22 an hour to do it, that is the cost.
The Shrink Math Your Customers Will Argue About
Here is where drying services lose money they never see: moisture shrink. When you dry corn from 20 percent to 15 percent, about 1.4 percent of the weight disappears per point removed — water that was weighed and paid for at the scale no longer exists. Elevators handle this with published shrink factors (commonly 1.35 to 1.4 percent per point of moisture removed above the target), and they apply it ruthlessly: dry 1,000 wet bushels down 5 points at 1.4 percent shrink and the customer is credited for 930 bushels, not 1,000.
If you dry for others, your ticket must show three numbers separately: wet bushels in, points removed, and dry bushels out computed with your stated shrink factor. Disputes almost always trace back to someone assuming a different shrink factor or a different target moisture (15 percent for grain going straight to market versus 14 percent for grain going into storage is a full point of disagreement). Print your shrink factor and target moisture on every ticket and every rate sheet. It is the cheapest insurance in the business.
For your own books, shrink is not a loss to mourn — it is a quantity adjustment. Record drying revenue against the service performed (points removed across wet bushels handled) and let inventory quantities absorb the shrink. Mixing the two up makes your per-bushel drying revenue look lower than it is and hides whether the dryer or the shrink is eating your margin.
Setting a Custom Drying Rate That Survives a Wet October
With your unit cost in hand, pricing becomes a comparison exercise rather than a guessing game. Current market benchmarks give you the ceiling; your cost gives you the floor:
- Elevator drying charges for the 2025–26 harvest broadly run 2.5 to 4.5 cents per point per bushel, often with a minimum charge around 12 cents per bushel regardless of points removed.
- Custom-operator surveys land in a similar band, roughly 3 to 5 cents per point per bushel when the operator supplies fuel, electricity, and labor.
- All-in cost studies put actual drying cost near 16 cents per bushel to remove 5 points under typical conditions — about 3.2 cents per point — before any margin.
A rate structure that works for most operations has three parts: a per-point-per-bushel charge set 20 to 30 percent above your computed unit cost, a minimum per-bushel charge that covers setup and handling on nearly-dry grain, and a stated shrink factor with target moisture. Quote the rate as "X cents per point of moisture removed, Y cents per bushel minimum, shrink at 1.4 percent per point to 15 percent (14 percent for storage)." Every variable is visible, every ticket reconciles, and a customer who brings you 26 percent corn in a cold rain pays for exactly the extra work it causes.
Revisit the rate when propane moves. A 50-cent swing in LP price changes your fuel cost by nearly a penny per point per bushel at typical efficiency — enough to erase a thin margin across a 100,000-bushel season. Some operators index their rate to a published propane price with a floor; even a simple mid-season fuel surcharge clause beats absorbing the spike silently.
Booking It the Tax-Friendly Way
How you record drying activity depends on whose grain you are drying, and the distinction matters at tax time.
Your own grain dried on your own farm is part of the cost of producing the crop. Fuel, electricity, repairs, and depreciation flow through the farm books on Schedule F like any other production expense. Keep them in dedicated dryer accounts anyway — the management value of knowing your true drying cost far exceeds the minor extra bookkeeping.
Custom drying for neighbors is service income, reported separately from crop sales. A standalone drying business files on Schedule C; a farmer doing custom work reports custom-hire income on the farm return. Either way, segregate it: drying revenue in, dryer fuel, repairs, and labor out, all in accounts that never touch crop production. When a lender or a buyer asks what the drying enterprise earns on its own, you want a clean answer, not an estimate reconstructed from a commingled fuel account.
Fuel timing trips up cash-basis filers every year. Pre-buying 10,000 gallons of propane in August for October drying is a prepaid expense, not October fuel cost — and prepaid farm supply rules limit how much you can deduct before use. Log deliveries against metered consumption (or batch tickets) so your per-bushel cost reflects fuel actually burned, and your tax return reflects the right year.
The dryer itself is depreciable equipment, not a building. New farm machinery and equipment is five-year MACRS property under current law (used equipment stays seven-year), and a dryer generally qualifies for Section 179 expensing as tangible equipment — meaning many operations can write off a new dryer in the year it goes into service rather than spreading deductions across five years. That is a powerful incentive to time a replacement purchase, but run the numbers both ways: expensing everything in a low-income year can waste deductions you would rather have in a high-income one. Grain bins, by contrast, sit in the seven-year class with no five-year shortcut, so do not lump a dryer-bin package into one asset line — break out the components and depreciate each correctly.
Four KPIs That Tell You Whether the Dryer Earned Its Keep
Once the season ends, four numbers summarize everything:
- True cost per point per bushel — all five buckets divided by total points removed. Compare it to your rate and to the elevator's charge. If your cost exceeds the elevator's price, you are subsidizing every custom bushel.
- Fuel gallons per point per bushel — your efficiency fingerprint. Benchmark against the 0.018-gallon average; drift upward means maintenance, and drift downward after a burner tune-up proves the service call paid for itself.
- Bushels per dryer-hour — throughput. Falling throughput with steady fuel burn is the signature of a dryer begging for overhaul.
- Shrink variance — actual dry bushels out versus ticketed shrink. Persistent shortfalls mean your shrink factor is generous (you are giving away bushels) or your moisture testing is off. Calibrate the tester before you accuse the math.
Mistakes That Quietly Erase the Margin
- Overdrying past the target. Every point below 15 percent (or 14 for storage) is shrink you paid to create: fuel burned plus weight destroyed. Drying corn to 13 "to be safe" gives away roughly 2.8 percent of the bushels for nothing.
- Flat-rate pricing regardless of points removed. Charging one price per bushel whether the corn came in at 18 or 26 percent means the wettest loads — the most expensive ones — subsidize nobody and bankrupt you.
- Commingled fuel accounts. Dryer propane mixed with home heat and shop fuel makes unit costing impossible. Separate tank, separate meter, separate ledger account.
- Ignoring handling and labor. A penny a bushel here and a midnight check there look trivial until you multiply by 150,000 bushels.
- No moisture paper trail. Every inbound load needs a tested moisture reading on the ticket. Without it, every shrink dispute becomes your word against the customer's memory.
Simplify Your Financial Management
A drying season generates hundreds of tickets, fuel deliveries, and repair bills in about six weeks — exactly the kind of volume where spreadsheet bookkeeping starts leaking. Keeping each load's moisture, shrink, and charges in transparent, version-controlled records means your per-point cost practically computes itself, and next year's rate sheet writes itself from this year's data. Beancount.io offers plain-text accounting that gives you complete control over your financial data — every bushel and every gallon traceable in text you own. If you want to see your dryer enterprise as its own profit center, the dashboards and reports make per-enterprise margins easy to track, and the documentation walks through setting up multi-enterprise books. Get started for free and bring harvest-season clarity to the rest of your year.
