16 February 1996

Busy winter means

year-round service

Contractors hibernate in winter? Just popular myth -as Andrew Faulkner found when he visited our south-east contractor, Graeme Elliott

WHEN the maize is clamped and the last beet lifted, contractors put their equipment to bed and then migrate to the warmer climes of their space-heated workshops.

True in the past, perhaps, but not today, according to our southern contractor, Graeme Elliott. He says his Sussex-based firms winter workload has increased to the extent that he now employs little seasonal labour; the firms nine full-time machine operators literally provide a year-round service.

"February is probably our quietest month, a time when we encourage staff to get in some holiday. But that doesnt mean the work disappears. We usually end up just as stretched as at any other time of the year," Mr Elliott explains. "At the moment there are two men hedgecutting, four muckspreading, two hauling straw and one in the workshop. In fact we are behind on our winter maintenance because the outside work just has not stopped."

Straw hauling is the firms most consistent winter work, carrying on in all conditions. It is an operation which has expanded over the past two years, neatly coinciding with an upturn in the market for what is an often undervalued commodity. Mr Elliott reckons it is an upturn unlikely to be reversed.

"Supply is the problem. At one time cereal growers were prepared to give a contractor time to buy and bale up straw in the swath at harvest. Now, with the pressure even greater to turn crops around quickly, most growers just chop and plough in. It would take a very high straw price, much higher even than that of the past two years, to persuade them to do otherwise."

The Elliott straw business is based around five medium square New Holland D1010/D1000 balers, two of which are part-owned with neighbouring contractors Bill Hayward and Keith Strivens. The five machines bale about 50,000 bales a year including 11,500 for sale through the winter.

In 1995, Mr Elliott had to pay £25-£37/ha (£10-£15/acre) for the straw he sells on. In 1990 the range was only £10-£20/ha (£4-£8/acre). "Although the current, delivered-in wheat straw price is high at about £35-£40/t, those high in-the-swath prices mean our overall margins are still about the same. We are also having to travel further to get the straw."

Longer hauling distances persuaded Mr Elliott to invest in his own truck and trailers in 1995. In addition to two tractor/trailer outfits for close work, he also now runs a 1988 DAF 95.310 tractor unit and tri-axle trailer for carting straw from counties such as Berkshire and Essex.

"Even now we have got the truck we are still only really supplying straw to our regular customers in Sussex. It just gives us more flexibility on where we get the straw from."

Buying the big DAF was not Mr Elliotts only purchase in 1995 – and certainly not the most expensive. At the close of the year he made the decision to replace his three-year-old Reco Mengele Mammut self-propelled forager with a New Holland FX375, complete with 2.8m (9ft) wide grass head and 4.5m (15ft) Kemper maize header. Total list price was about £165,000, a mere £159,000 more than he paid ADT Auctions (Manchester) for the 38t DAF.

The forager deal was done on contract hire with local New Holland dealer, Sussex Tractors, which beat off competition from nearby Claas and John Deere agents. Mr Elliott admits he was tempted by the Claas machines simplicity of design and reputation for reliability. But, in the end, the German firm couldnt match New Hollands contract hire package. "Contract hire has to be the best way to finance these big, high capital cost machines. The secondhand value is underwritten, which reduces the risk, and I know exactly how much the machine is costing per acre to run."

The past two years have been a period of "big spend" for Mr Elliott. Besides the forager and artic unit, new fleet members include two combines, two tractors, two New Holland D1010 medium square balers, a New Holland 650 round baler, a Taarup 338 mower and three 11t Warwick silage trailers. Not surprisingly, 1996 will be a year of consolidation.

"It is time to get some money back in. That means resisting pressure to cut charge rates by emphasising the quality of service a well equipped outfit gives."

Mr Elliott is also planning to reassess how his resources are allocated in 1996 – to concentrate on the growth and income earning sectors while taking a long, hard look at some of the weaker operations. Round baling is top of his hit list. &#42


BUSINESSDATA


&#8226 Work undertaken: All arable operations, forage harvesting maize and grass, and round/medium square baling of silage and straw.

&#8226 Main machinery: Eight Case IH tractors (100-155hp), four combine harvesters, Reco Mengele 6800 Mammut self-propelled forage harvester, JCB 412 wheeled loader and Matbro Teleram telescopic handler.

&#8226 Labour: Nine machine operators and two stockmen. All self-employed.

Graeme Elliotts hedgetrimming double act comes in for a pit-stop.

Muckspreading, hedgecutting and straw hauling are just some of the February tasks occupying staff at Sussex-based contractors G BElliott. For muckspreading, three West 1300 Dual Spreaders are hired-in and operated by Elliott men and tractors. Inset: Graeme Elliott says 1996 will be a year of consolidation for the business.