Monday, July 15, 2019

Contracting guide reflects increasing machinery costs

July 2, 2019 by  
Filed under Machinery

A new guide detailing contracting prices has been published by the National Association of Agricultural Contractors (NAAC) for 2019/20.

The prices give a national average to help steer contractors and farmers – although the NAAC says they are a guide only and it is important that contractors know their individual costs and are clear about what they need to charge to run a viable business.

“Annual machinery costs continue to climb, alongside tyres and labour, and it is vital that contracting prices reflect these increases,” said the NAAC.

Capital investment is significant on farms and more than 90% of farmers use contractors to take soak up the investment burden for specialist, high capital cost machinery – alongside the need to bring in skilled labour which is in short supply.

Viable business model

The NAAC said contractors should carefully plan and cost their operations. All costs such as downtime, insurance, depreciation, labour, machinery servicing and maintenance must be calculated to try and ensure customers are charged appropriately to maintain a viable business model.

Like every industry, there is fierce competition in the contracting sector which can result in prices being driven down but a successful business, with longevity, is one that costs its operations carefully and refuses to work for less than a realistic price.

“There is little point being a busy fool, working all hours for little benefit,” said the NAAC.

Contractors are advised to use the prices as a guide but take into account their own costs, and variations in the types of land, customer size, machinery and scale of the business to work out their charges.

The guide can be found at www.naac.co.uk/contractor-charges

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