NAAC contracting charges 2013-14

Red diesel has doubled over the past 10 years or so but contracting charges have failed to move at the same rate.

This means that many contractors are actually subsidising the cost of services for the benefit of the customer. And while this is a good thing for farmers, it might not always be economical for the contracting business.

As machinery becomes more sophisticated and the costs continue to drift out of reach of many farming businesses, using a contractor who is able to invest in such machinery could be a good alternative.

These sophisticated pieces of kit need specialist operators who are trained to get the best out of each machine. The difference in yield and performance between employing those who offer best-practice spraying, drilling and harvest operations could amount to a fraction of what you are paying in contracting charges, which means choosing a professional contractor is not only good for machinery costs, but it’s also better for your bottom line.

To offer services like this, the contracting industry needs to have a stable and sustainable pricing structure that allows individual businesses to invest in such kit and the insurance, salaries, training and maintenance schedules that it demands.

For those who work out the correct price and manage to eke out enough of an income to reinvest without making the business unstable through over-borrowing, it is sometimes difficult to compete with other contractors who may be offering the same service at a lower rate.

True, it may seem like those who are undercutting others offer deals too good to be true, which is always tempting when money is tight.

Think about what professional contractors offer to your business and cost this into your budget. Yes, it might seem attractive to take the lowest cost route at the time, but when you are opening your bales on a bleak winter morning only to find they are too mouldy to use, perhaps it will leave a sour taste in your mouth as well as the cows.