This winter promises to be a busy one for Bartlett Contractors – 2015 Farmers Weekly Contractor of the Year – as the company expands its fleet ahead of another busy grass and maize season.

Six new tractors will be arriving at its Dorset yard over the coming months, despite the low milk prices and cashflow challenges that have left both farmers and contractors feeling the heat.

That means delivering a high quality service that gives both parties the best chance to survive the economic crisis, according to Rob Bartlett.

Rob Bartlett. © Jim Wileman

“The key, in our opinion, is to know the cost of every operation we complete,” he says.

“I would guess that 75% of contractors don’t know their true running costs, so when the machinery wears out after four or five years, they can’t afford the upkeep and replacements.”

“It’s important to bill the customer in a way that takes into account the quantity of work the machine has done – slurry by the cubic metre or silage by the acre – rather than just by how many hours your backside is in the driving seat.”

Fendt fleet

The most hard-worked of those machines are the tractors. Bartletts has a chequered tractor history that has seen Ford, Same, International, Renault, New Holland and John Deere all occupy the yard, but it is now a fleet of Fendts that works the frontline.

A meagre investment it is not, but once you are on the Fendt bandwagon, the higher residuals cover a chunk of the replacement, and overall running costs aren’t too far north of equivalent manufacturers, according to Mr Bartlett.

The company also has a strong relationship with the local dealer, Redlynch, which it has benefited from on numerous occasions.

“Fendt has stumped up big amounts of cash to fix problems outside of warranty several times,” says Mr Bartlett.

“So, even if the initial cost is a bit higher, having the guarantee of a tractor in the yard – no matter how big the problem – is priceless for a contractor.

“That’s not to say we would never look elsewhere – keeping an open mind is a good bargaining tool when it comes to negotiating replacements – but it’s also important to maintain some loyalty to dealers that have looked after us.”

So, what about replacements?

A lot has been made of dealers’ struggles to get new and used machinery off the forecourts, so now is the time to take advantage of the competitive prices, according to Mr Bartlett.

A fresh Fendt 828 will be added to the squad this winter, primarily as an extra body during ploughing and drilling, where the 724s are sometimes found wanting. A new 160hp 716 is also on the cards.

“Because we are adding to our numbers rather than trading in, there should be some pretty good deals given dealers’ keenness to shift new machines without being lumbered with trade-ins,” says Mr Bartlett.

As a general rule, the smaller tractors – 700-series and below – do the donkeywork, towing trailers and muckspreaders, so they arrive guidance-free and without a front pto.

“It can be more difficult to justify the Fendt premium on some of the tractors that are treated like yard dogsbodies,” he says.

“We might pay £70,000 for the 716. A less fashionable brand could be £20,000 cheaper, but we are sticking with the Fendts for now because our drivers are familiar with them, it makes servicing a lot easier and their reliability gives us peace of mind.”

Meanwhile, the higher-horsepower units are usually ordered specced up to the eyeballs with guidance from an RTK base station, reverse drive and almost every other bell and whistle.

While it means the tractors can be used for pretty much any job, depreciation is also more of an issue and their workloads have to be policed where possible. It sees them semiretired over winter while the rest of the fleet clocks up the hours on the land drainage and civil engineering side of the business.

Tractor rotation

To minimise the depreciation hit, the big dogs are kept on the books for six years, by which time they will have hit 10,000 hours and drifted out of their warranty protection. The smaller tractors are on a strict four-year rotation plan because they clock up 2,500 hours annually.

Up to four machines also come in on hire during the summer. They are paid for by the hour, so Mr Bartlett knows his fixed costs, but the long-term plan is to increase the business’ tractor fleet from nine to 14 to reduce the need to hire.

It will also allow the company to buy and sell tractors when the time is right and prices are good, rather than relying on trade-ins.

Experimenting

One way of keeping fresh business coming in is to explore new methods and machinery before the market is flooded.

“There are always new people – mainly one-man bands – coming in and undercutting us,” says Mr Bartlett.

“We can still offer the popular services, but don’t necessarily need to make them the core of the business.”

The company’s newest niche is to plant maize under plastic with an Irish-made Samco drill to try to improve the reliability of maize crops.

“The quality of the job is more important than ever,” says Mr Bartlett. “Our customers want top-notch silage because it will affect their income over the year. Paying cheap to get a job done isn’t necessarily the way forward anymore.

“Equally, not all services necessarily turn a profit – some are just for turnover – and it’s worth bearing in mind where the work might lead to. Taking a long-term view does nothing to harm customer satisfaction, which is the bedrock of any contracting business.”