As we publish the NAAC’s contracting charges for 2011/12, I am bracing myself for the usual onslaught of comments that they are “too low” or “too high”.
After several years of compiling the charges, we know we will never suit everyone, but I believe these new averaged prices are a reasonable guide for both contractors and farmers. However, it must be remembered that they are only a guide.
There is considerably more detail this year. For example, tractor-and-man prices have been broken down into horsepower brackets, highlighting the vast difference between 100-150hp at £29.35/hour and 300hp at £65.75/hr. This shows just how important it is to work out accurate prices based on the machinery involved.
Likewise, the price of fuel has meant that contractors must work out fuel consumption for each operation, wherever possible. This will vary significantly according to the horsepower of the tractor and the operations being carried out. Heavier land may more than double consumption and this should be reflected in the pricing structure. For this reason, farmers should not be surprised if they are quoted figures well above this guide.
The table below gives just a few examples (taken from a contractor’s costings) of the basic variations that can occur in fuel use based on machinery and operation.
The dry conditions that have affected much of the UK are obviously putting increasing pressure on farmers. But contractors are also concerned that the hard ground will increase wear and tear on their machinery, which may in turn put up their costs. This is difficult to cost out before the work takes place and ideally a contingency needs to be built into prices.
It will always be possible to find a contractor offering to carry out work way below these averaged prices. In fact, the quotes we hear about are sometimes difficult to believe, bearing in mind the escalating costs of fuel and the significant increases we continue to see in the purchase price of machinery.
We can only assume that, in some cases, the operator simply loves his tractor far too much and is, therefore, willing to lose money to simply have the pleasure of being out in the fields.
Sadly, this pleasure is usually short-lived. Once breakdowns occur, schedules of work rapidly slip as repairs take place with baler twine and fingers crossed.
Unless accurate machinery costs are built into costings (alongside forward planning for replacement machines) such businesses are not usually in the marketplace for very long.
As a result, a customer’s joy at rock-bottom prices will rapidly decline as it is replaced by poor service, inefficient operations and a general hassle.
A professional contractor will have a sensible pricing structure that takes into account machinery, fuel and labour costs and customers are well advised to take the time to review and discuss costings with their local contractor. This way they can be sure they will get the level of service they deserve for the duration of the contract.
Download a PDF of the table of NAAC contractor charges 2011/12