A contractor’s lot has never been a particularly easy one. But now, with price increases occurring almost by the day, it has become even more of a challenge to remain successful.
That’s the opinion of Phil Benson, whose contracting business near Farringdon, Berkshire offers round and big square baling, muck-spreading, mowing and tedding, hedge cutting and miscanthus planting.
The muck spreading team in action. Pricing individual jobs has become increasingly difficult as costs continue to rise.
Using two Welger round balers and five Claas Quadrant big square ones, he reckons on covering some 8000ha (20,000 acres) when baling silage, haylage and straw alone. The mowing and tedding part of the business is offered in conjunction with another contractor who runs a forage harvester and the muck spreading side keeps five Bunning rear-discharge machines on the move.
“Like other contractors, one of the biggest issues we have had to contend with is the increase in the price of fuel,” he says. “At peak work time last year I was spending £8000 on fuel each week and this year I expect it to be double that amount.”
Mr Benson says the almost-daily hikes in the price of red diesel have made it difficult to provide accurate rates for customers wanting. More than that, with fuel now so expensive there can often be a variation in the rate per acre for the same job.
“When we are mowing in a light crop of grass the fuel used can be half that of a heavy crop in a field with ridge and furrow,” he explains. “In the past, the amount of fuel used was not over-important but now it can make a difference of several pounds an acre.”
Phil Benson: “One of the biggest issues we have had to contend with is the increase in the price of fuel.”
He reckons the introduction of Tier 3 emission-compliant tractors, has actually increased fuel consumption. “There have also been huge increases in the cost of fertiliser and oil-based materials such as plastic wrap and baler twine, too,” he says. “A weak pound against the euro means that machinery prices are going up every few months and this fact, coupled with long lead times for delivery, means I have to try and predict future trends when purchasing new kit.”
This can lead to cash-flow problems, a situation not helped by slow-paying customers or those waiting to receive their single farm payment who are not in the position to settle invoices. “This has been the toughest year yet, financially,” he says.
He has noticed, too, a growing reluctance among cereal growers to have their straw baled, which is causing concern for stock farmers looking to purchase straw.
“The high price of P and K fertiliser is encouraging more growers to chop and incorporate straw rather than bale it,” he explains. “I think this borders on false economy as extra fuel is needed to chop it and extra nitrate fertiliser needed to break down the straw.”