The farm contractors’ association has released its latest survey of contracting rates and warned the industry that further price rises are likely.
More than 90% of farmers use a contractor, either for skilled labour or their high capital cost machinery and professional services, and the National Association of Agricultural Contractors (NAAC) say that with fuel prices at record highs and the costs of labour and equipment escalating, their prices must also rise.
The latest NAAC survey was based on £1 per litre for fuel, and contractors have now been advised to calculate their fees carefully to ensure they are covering costs and can make a margin.
The NAAC says a fuel surcharge may be necessary if prices continue to rise.
The average prices quoted by contractors include ploughing light land at £28.89/acre, disc harrowing £24.86/acre, combining cereals £44.80/acre plus an extra £9.29/acre for a straw chopper.
Potato harvesting costs an average £281.26/acre and if carting is included the cost rises to £426.95/acre.
The average cost of shearing a ewe is £1.65/head, a ram is £3.30/head and foot trimming is quoted at £14.75/head for sheep and £13.33/head for cattle.
The association’s chief executive, Jill Hewitt, said: “These are difficult times for everyone, and it is vital that contractors work closely with their customers to ensure all businesses can remain viable and productive.
“Profit must not be a dirty word if contractors are to keep pace with new technology, training and investment in their businesses, to supply the professionalism, machines and skills that are increasingly being demanded to meet farmers’ sustainability and environmental targets.”
The NAAC has recently launched a new online pricing tool for its membership, with Andersons Consulting, to allow contractors to evaluate each operation, considering all costs, so that they can see the cold, hard facts for each job.
The tool takes account of numerous variables such as depreciation, repair costs of individual machines, yard costs, insurance and office staff, before breaking each job down, taking into account fuel costs, area of work, work rate, labour, downtime and profit.
NAAC said the tool would allow quotes to be made, backed up by statistics, to reach a price that is realistic.