The latest survey of contracting prices has been released by the National Association of Agricultural Contractors (NAAC) and results show that price rises should be expected this spring. This follows a similar picture seen last year.
With UK inflation rates currently over 10%, the NAAC survey shows more modest increases in contracting rates. Overall soil preparation costs have increased at just over 4% whilst drilling has gone up around 3.5%. Within individual services, some prices have increased substantially whilst others have seen limited change.
The cost increases being seen for fuel, labour and inputs mean that the NAAC is advising members to review pricing structures to ensure they can remain profitable.
Jill Hewitt, NAAC Chief Executive, said: “It is simply not defensible for prices to stand still this year. Farmers should be entering into conversation with their contractor to ensure that price rises allow both parties to run sustainable businesses, whilst moving forward in terms of productivity and technology.”
Online pricing tool
Members are being encouraged to use an NAAC online pricing tool, which they developed with Andersons Consulting. The tool allows contractors to make considered evaluations, taking into account a number of variables such as depreciation, machine repair costs, yard costs, insurance and office staff. It also breaks down each job, taking a range of elements into account, including fuel costs, area of work, work rate, labour, downtime and profit. Using this technology, quotes can be generated to reach a realistic price for each job.
Contractors are an integral part of UK agriculture and they need to find a balance between retaining loyal customers whilst keeping up with inflation and helping customers’ productivity alongside running safe and efficient contracting businesses.