The National Association of Agricultural Contractors (NAAC) has released its latest survey, showing “inevitable” price increases this spring.
Across the general upwards trend in prices this year, there are some figures which have barely shifted at all.
While the UK inflation rate has remained around 5% in recent months, fuel prices fell from £1.00/litre in last year’s survey to £0.85/litre this year.
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However, machinery, labour and insurance costs have all increased significantly, more than offsetting fuel reduction.
The drilling category has increased by 3.46%, which is in line with the previous rise of 3.5% seen in 2023. Cultivation figures are also up by just over 4%,
Matt Redman, NAAC chairman said: “This is already a difficult and frustrating year for the whole industry, with high rainfalls and sodden ground frustrating efforts to get crops in the ground.
“However, all contractors must continue to review their price structures and keep steadfast on payment terms to ensure that businesses are able to continue to supply farmers with reliable, professional contracting services.”
NAAC Members are being encouraged to calculate their individual costs using the NAAC’s costing tool to ensure that quotes are accurate and sustainable.
As machinery expenditure continues to climb, calculations must be accurate to ensure businesses keep to pace with depreciation and replacement costs.
Their tool takes into account these variables, as well as other outgoing costs such as insurance and office staff.
Jill Hewitt, CEO of NAAC also commented on the situation: “The survey has highlighted again how individual charges vary widely across the UK, with businesses reaching different conclusions on rates needed to offer a professional service.
“However, the NAAC holds firm that contractors generally take significant financial risk, and their prices need to reflect costs, allowing contractors to remain profitable and sustainable, supporting their customer base.”
