‘Baling charges can now be as high as €20/bale’ – FCI
The FCI, yesterday (Wednesday, June 15th, 2022), published its revised and updated Contracting Charges Guide 2022.
The updated guide rates the “huge” increases in agri-diesel cost inflation and other “significant” input cost increases.
The average 5% increases in charges included in the initial FCI Contracting Charges Guide for 2022, published at the start of 2022, are no “longer adequate”, the group believes.
The association says these rates fail to meet some of the more “significant” increases in costs of machinery, tyres, fuel and lubrication oils, insurance, and labour costs FCI members are experiencing since the first quarter of 2022.
In addition to the doubling of agri-diesel costs, the tripling in the cost of diesel exhaust fluid, AdBlue, is an “extra cost” factor this year.
The association stated that contractor-owned tractors are “significant” consumers of these products.
It estimates that the increased AdBlue costs alone will add more than €8 million to contractor costs this year, based on the sector consumption ratios.
Operation costs and baling charges
In a statement, Michael Moroney, FCI Chief Executive Officer, said:
“FCI continues to advise all contractors to examine current operation costs in particular by monitoring fuel consumption levels, to establish their individual charges for 2022.”
“In our current high inflation economy, charge rates must be based on a realistic examination of the true cost of the operating tractors, and machinery, as well as the costs of running a progressive rural enterprise that provides skilled employment.”
“With the huge levels of cost inflation being experienced by Farm & Forestry Contractors in 2022, the most recent FCI silage cost analysis has shown that a modern contractor self-propelled silage fleet will require a minimum rate of €170 per acre, including VAT, just to cover the depreciation, labour and operating costs and the further carbon tax increase introduced in May 2022.”
“Baling charges, when 30% plastic price increases and VAT are included, can now be as high as €20 per bale. This depends on crop and farm conditions” he added.