Are Contractors rates having to go up.

[dave mountain]

‘You should be doing contracting for the love of it and not for the money’

The Cork ag contractor offers reseeding, mowing, raking, baling, wrapping, bale stacking, slurry spreading and plant hire services.

thatsfarming.com

sounds like hell of a businessman

 

[Ali_Maxxum]

The people they 'interview' for these articles, I do wonder how half of them afford to live never mind run a business, yeah a lot of us do this job because we enjoy it but we need money to pay household bills, council tax, put food on the table, run and maintain a car, christ, the list is endless.

A lot seem to be already on a farm so already have a farm/premises, probably still live at home while the farm still does a bit to claim sub for them to buy kit to go contracting on the cheap and go on to make themselves busy fools.

 

[Werzle]

Whenever an article is done about a contractor with a picture of the team i can usually pick which chap in the photo is the boss, he is the worried face amongst the smiling staff. Contractor charges will have to rise with fuel dearer, wages rising and dearer machinery but how farmers are going to pay is the problem, especially with sub reducing in the coming years and many farmers refusing to pay bills until it arrives.

 

[Skintagain]

Whenever an article is done about a contractor with a picture of the team i can usually pick which chap in the photo is the boss, he is the worried face amongst the smiling staff. Contractor charges will have to rise with fuel dearer, wages rising and dearer machinery but how farmers are going to pay is the problem, especially with sub reducing in the coming years and many farmers refusing to pay bills until it arrives.

There’s gunna be some farm sales. Older generation won’t want to try and take on these new prices they will just think balls to it

 

[Werzle]

There’s gunna be some farm sales. Older generation won’t want to try and take on these new prices they will just think balls to it

I think there will be alot less contractors too

 

[hally]

There’s gunna be some farm sales. Older generation won’t want to try and take on these new prices they will just think balls to it

Might not just be the older generation, why dig your own grave when most of us could earn 50k on a wagon

 

[deleted user 436632456]

Nothing like talking the game down to keep others out of it

I’m not a hater and fair play to him he must really love what he does and don’t they tell you that if you do what you love you will never work a day in your life,
Although I do wonder what sort of conversations him and his accountant have ?

 

[Mounty]

sounds like hell of a businessman

He mentions sleepless nights, shortage of labour, cost of new kit, not being able to justify the diesel price and that it's hard to make any money but "you should do it for love and not the money". Love doesn't buy you new kit nor pay the bills. It's fair to say that most people in the agri job enjoy what they do and that often masks the raw financial side for some but we're all in it to make a few quid as well.
I've heard of 2 set ups in the last month who have hung their boots up and gone out of agriculture. One was involved in gypsum supply and spreading. The supply part of their business has been taken over but the new owners wouldn't touch the spreading. I had a call from them this week trying to re kindle some of the business we used to do but the price is triple what it was 2 years ago. In fairness it was far too cheap back then.
When the outgoing contractor was featured in an FW article around 2018/19 with all their shiny kit and stating their £ rates I just couldn't see how it stacked up. Turns out it didn't. When they say love conquers all I'm not sure that applies to agricultural contracting!

 

[dave mountain]

He mentions sleepless nights, shortage of labour, cost of new kit, not being able to justify the diesel price and that it's hard to make any money but "you should do it for love and not the money". Love doesn't buy you new kit nor pay the bills. It's fair to say that most people in the agri job enjoy what they do and that often masks the raw financial side for some but we're all in it to make a few quid as well.
I've heard of 2 set ups in the last month who have hung their boots up and gone out of agriculture. One was involved in gypsum supply and spreading. The supply part of their business has been taken over but the new owners wouldn't touch the spreading. I had a call from them this week trying to re kindle some of the business we used to do but the price is triple what it was 2 years ago. In fairness it was far too cheap back then.
When the outgoing contractor was featured in an FW article around 2018/19 with all their shiny kit and stating their £ rates I just couldn't see how it stacked up. Turns out it didn't. When they say love conquers all I'm not sure that applies to agricultural contracting!

In contracting there is far too much "hes got a new fendt so it must be profitable, so ill go buy one and do the same" and not enough people who understand the basics of running a business. if its not gonna earn a profit on a particular job (and i mean a profit, not just pay their wages) then they need to leave it in the shed. This is something a lot of contractors dont seem to do. Its the gross profit (NOT their wages) that should be paying for breakdowns and other costs.

 

[Sid]

In contracting there is far too much "hes got a new fendt so it must be profitable, so ill go buy one and do the same" and not enough people who understand the basics of running a business. if its not gonna earn a profit on a particular job (and i mean a profit, not just pay their wages) then they need to leave it in the shed. This is something a lot of contractors dont seem to do. Its the gross profit (NOT their wages) that should be paying for breakdowns and other costs.

Tractor is still "costing" when sat in the shed. The monthly still has to found.

But cost are greater when being used, fuel,tyres,wages etc

 

[som farmer]

the problem could be easily solved, just by paying farmers, the proper price for our product. They don't, and that is where we are, farmers and contractors, are at the bottom of the food chain, and treated with contempt by many. That just might be altering, global production is falling, we are no longer in the safe EU mkt, price will be on supply/demand basis, and demand is outstripping production.

 

[dave mountain]

Tractor is still "costing" when sat in the shed. The monthly still has to found.

But cost are greater when being used, fuel,tyres,wages etc

how are you gonna find the monthly if there is no profit? Take it out wages? Better off driving a wagon and paying the monthly out of that, no risk of breakdowns or other costs that way

Monthlies are a fixed cost so come out of gross profit, depreciation would be an additional variable cost added to the job. Monthlies should be paid for by ensuring a healthy gross profit margin on each job. The argument of I'm better of out than in the shed is an extremely poor business attitude.

 

[Courier]

the problem could be easily solved, just by paying farmers, the proper price for our product. They don't, and that is where we are, farmers and contractors, are at the bottom of the food chain, and treated with contempt by many. That just might be altering, global production is falling, we are no longer in the safe EU mkt, price will be on supply/demand basis, and demand is outstripping production.

And therein lies the problem, farmers considering them selves to be receivers of payments rather than sellers of goods ….

 

[som farmer]

our not so good help, decided farming wasn't really 'for' him, correctly.
he went for a job interview, driving ready mix lorries, started next day, 12 hr shifts £17 hr, l doubt he will stick it for long, but makes a mockery of our profession, and what we earn.

 

[Sid]

how are you gonna find the monthly if there is no profit? Take it out wages? Better off driving a wagon and paying the monthly out of that, no risk of breakdowns or other costs that way

Monthlies are a fixed cost so come out of gross profit, depreciation would be an additional variable cost added to the job. Monthlies should be paid for by ensuring a healthy gross profit margin on each job. The argument of I'm better of out than in the shed is an extremely poor business attitude.

How are you going to find the monthy if your not working?

 

[dave mountain]

How are you going to find the monthy if your not working?

Exactly the same place as if you are working for nothing, like I said, better off driving a wagon and paying monthlies from that than doing jobs with no profit in and potentially losing money.

It's this mentality of "tractor must be out at all costs" that started and continues the race to the bottom for contractors

 

[ollie989898]

In contracting there is far too much "hes got a new fendt so it must be profitable, so ill go buy one and do the same" and not enough people who understand the basics of running a business. if its not gonna earn a profit on a particular job (and i mean a profit, not just pay their wages) then they need to leave it in the shed. This is something a lot of contractors dont seem to do. Its the gross profit (NOT their wages) that should be paying for breakdowns and other costs.

Plenty of folk about that can't work a calculator, it isn't something that only contractors may suffer from. Here is such an example of the thought processes involved:

 

[dave mountain]

And therein lies the problem, farmers considering them selves to be receivers of payments rather than sellers of goods ….

i get the point but bit of a generalization. plenty of farmers are very good businessmen and will know exactly their costs of production and will calculate whether to bother producing anything or not, others will just carry on as they always have and subsidise their "business" (i use this word in a very loose sense) with the payments

 

[Sid]

Exactly the same place as if you are working for nothing, like I said, better off driving a wagon and paying monthlies from that than doing jobs with no profit in and potentially losing money.

It's this mentality of "tractor must be out at all costs" that started and continues the race to the bottom for contractors

If your working for yourself the last person paid is you. That's the profit.
First is machine capital , fixed cost, then fuel,tyres,servicing etc. Driver wages variabke costs, and lastly the icing of profit.

You still have to find the fixed cost whether a wheel turns or not

 

[dave mountain]

If your working for yourself the last person paid is you. That's the profit.

with the greatest respect, i think this statement demonstrates how much you understand about running a business