Spiralling input costs are putting increasing pressure across the farming industry, but nowhere more so than agricultural contractors. In a sector that has no farm payment safety net, plus cut-throat local competition, the pressure is on to find the right balance to retain a loyal customer base, whilst keeping pace with rising inflation.
Fuel prices alone have increased over 50% to around 75ppl and fertiliser is estimated to have leapt up over 100% (depending on the baseline). Farmers also face these hikes, but it is machinery replacement and labour that are causing a massive headache for contractors. Put all this together and the industry must brace itself for increases in contracting prices. Only the foolish will try and cling to static prices this spring, as any contractor that understands their own costs will recognise that price increases are vital to keep pace, earn a living and retain some stability and longevity in their business.
The expectations on contractors continue to escalate. Environmental protection, specialist training, record keeping and having the latest technology on board, all require a new level of expertise and equipment. Farmers are increasingly reliant on their contractor to take on roles that they may no longer have the labour, skills or machinery to complete. At the same time, the industry needs to invest and look ahead at more complex technology to ensure that inputs are minimised, and land can be farmed productively, whilst protecting the environment (and customers environmental payments!). As machinery comes up for renewal our sector will be faced with tough decisions.
It will become increasingly apparent that ‘you get what you pay for’ and the industry must work in partnership to ensure all businesses can remain viable, today and in the future. Professionalism will be key when employing a contractor, both to complete paperwork and to drive forward sustainable agricultural productivity. To be a successful contractor, that means costing individual operations carefully and accurately. The NAAC has recently launched a new on-line pricing tool for its membership to allow contractors to cost out each operation accurately, taking into account all costs, so that they can see the cold, hard facts for each job. If customers want a contractor that has professional staff, working safely, with well-maintained reliable kit then this will come at a cost. It will be critical that farmers and contractors work together to support each other’s business.
