Opinion: Prices aren’t going up so costs must go down

My granddad is the stereotypical tight farmer.

He thinks nothing of serving up fodder beet as a side dish alongside roadkill pheasant, and has given up his landline in favour of the cheapest pay-as-you-go mobile, which he switches on between precisely 5pm and 8pm.

His thrifty ways are one of the reasons his farm was successful.

I’ve been trying to take a leaf out of his book, in a bid to cut farm overheads.

See also: Opinion: My three pre-calving resolutions

The other day, instead of going straight to my usual supplier for red diesel, I found a cheaper quote. They agreed to match the price and knock off a bit more for goodwill.

Liz-HainesLiz Haines and her husband Nick milk 320 spring-calving cows in a contract-farming arrangement in north Shropshire.

I could easily have just gone along with the first price they charged me (as I’m sure many people do), and been none the wiser to the savings I was missing out on.

If you don’t ask, you don’t get.

Given the fact oil prices have fallen 75% since mid-2014, it’s no surprise that fuel is comparatively cheap at the moment.

But what about everything else? It’s been said the last time the oil price was this low, fertiliser was less than £100/t.

Today it is still more than double that.

Ask a sales rep why and they will give you some waffle about unrest in the Middle East, trouble in Ukraine, and strong demand as spring buying kicks in, but the fact is, retail prices simply haven’t fallen in line with commodity prices, and this is true of most products supplied to our industry.

Farmers are feeling the pain of a massive shift in the global economy, partly because the major oil producing countries no longer have as much money to spend on food imports.

The result is that farmers have to cut costs massively, or face going out of business.

This pain doesn’t seem to have fed through to the supporting industries yet – they are still trying to sell us more of the same or at a barely reduced price.

And the sales reps still turn up in pairs on your drive (one is a “specialist”) in their new Audi.

Last time I visited my local farm supplies shop, the assistant asked me: “Why did you buy two tonnes of mag chloride the other day? We always have bags in stock, so you can pick them up whenever you like.”

Well of course I bought them in bulk to get a discount.

It’s too easy to fall into the expensive trap of convenience buying – which is exactly what they want you to do.

Nowadays the high street is a shop window for the internet.

Companies such as Amazon have cashed in due to massively reduced overheads, and consumers have benefitted from lower prices.

Perhaps more farm suppliers need to consider this model. If they are going to retain our business in this tough climate, they need to find innovative ways to meet our needs as cost effectively as possible.

That could be anything from providing support over the phone or online instead of face to face, to giving a discount for direct debit payments.

From now on, I’m making it my mission to try to knock at least 10% from everything I buy on the farm. I’m looking into joining a buying group, or clubbing together with other farmers in my area to buy in bulk.

I’ve also put up a heading for everyone to write on the office whiteboard: “Ways we have saved money this week.”

I’m not quite ready to start eating fodder beet yet, but I think my granddad would be proud.

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