The UK-based National Association of Agricultural Contractors (NAAC) has warned farmers that agricultural contracting prices will have to rise in the coming days and weeks.
Its chairman, James Bannister, has stated that it will no longer be possible for agricultural contractors to “retain static prices”.
He made the remark in light of fuel prices doubling and continuing to climb and spiralling machinery costs, all whilst labour remains “at a premium” for skilled operators.
UK agricultural contractors
Bannister said that professional contractors will have no choice but to increase costs to sustain their own businesses.
“Contractors are always trying to find the right balance to retain a loyal customer base whilst keeping pace with rising inflation. However, offering the cheapest service is now a clear road to heading out of the industry.”
Besides, he said machinery replacement costs and keeping good labour were already causing “a massive headache” for contractors before the current fuel hikes.
Bannister stated red diesel prices have “leapt” from 80ppl to over a pound and are climbing. He confirmed that fuel is getting harder to source.
Also, the body has stated that it will become “increasingly apparent” that “you get what you pay for”.
Furthermore, it added that farmers and contractors must work in partnership to ensure all businesses can remain “viable, productive, and sustainable” today and in the future.
Successful agricultural contractors
Meurig Raymond, NAAC president, said:
“Contractors, like the rest of agriculture, are being forced to look hard at their bottom line. Escalating business expenses will need to be passed on.”
“A successful contractor will need to cost individual operations carefully and accurately. For a farmer to bring in a reliable, professional contractor that has trained staff, working safely, with a well-maintained kit, this will come at a cost.”
Raymond said that many farmers now rely on their contractors to take on roles that they may no longer have the labour, skills, or machinery to complete.
However, he said, “contractors cannot be expected to bankroll their customers”. “The industry must brace itself for price rises.”
The body stated that expectations on contractors continue to escalate.
Furthermore, it stressed that the following require a new level of expertise and equipment:
- Environmental protection;
- Specialist training;
- Record keeping;
- Having the latest technology onboard.
“However, it is currently the costs of the basics that are forcing tough decisions,” it said in a statement.
Jill Hewitt, NAAC chief executive, said:
“Only the foolish will try and cling to stationary prices this spring. Any contractor that understands their own costs will recognise that price increases are vital to keep pace, earn a living and retain some stability and longevity in their business.”