Contracting Costs

AlfM

Member
Mixed Farmer
Location
Norfolk
How are current fuel/labour/machinery costs going to affect pricing to customers this year? Fuel the biggest one. 175 hp tractor here on the road is using £5-£6/hr more fuel at 80p than 50p as an example. Some may say use farmers fuel but if you're running modern kit on GTL it's not really an option to go to an unknown tank and put something in that may cause filter issues.
I'd say most prices until back end of last year are/were based on fuel at a max of 50p/l? So do we work out fuel usage and add anything over the 50p onto the previous price as a minimum (before taking labour/machinery into it). Will the customers pay? Interested what other contractors for anything from cultivation work to silage/muck are thinking of doing.
 

benny6910

Member
Arable Farmer
Before fuel went over 70p I was going to put everything up 10% across the board and the high fuel jobs I was going to add more. Currently at 90p the 10% is not enough so possibly 15-20%.
 

Ali_Maxxum

Member
Location
Chepstow, Wales
We were due to increase our charges by a few pounds an hour, as well as looking at per acre/bale charges, etc. However now diesel has gone crazy (quoted £1.14 if I wanted a load next week) it's not just a small increase we are needing, it's potentially double figures an hour more depending on what we are doing of course just to cover the increase in fuel.

It has become so volatile that we are looking to review charges every time we have a load of diesel. Normally we just go with the fluctuations throughout the year, so no, we didn't drop rates when they were lower, but they didn't get increased when it rose either, but as it's only been up, up, up it's time to do something about it.

Pricing jobs are estimates only and making it clear that any increases will be charged for accordingly.

As it has been mentioned maybe keep rates where they are but charge the difference in extra cost of fuel accordingly. This could be a little difficult for us as our work could see us at half a dozen or more places in one day.

It has been very worrying with increasing levels of anxiety as to how to ride this wave out, everyone I speak to just hoping and praying that this is just a bit of a crazy period and hopefully if and when things calm that things can return to a more favourable level. My main worry has been people not having the work done while we still have not only the standard bills but the increasing cost of them as well.

We do however think anyone not living under a rock will fully understand and know that they just have to go with it and will support us as they always have done, as the level of service will be the same, regardless. If this carries on into harvest however there will be some very expensive fodder about, but should in turn return a higher price. Everything (should) go up together!

It's all gone so wild so quickly it has been quite over whelming to take in all at once.
 

Werzle

Member
Location
Midlands
How are current fuel/labour/machinery costs going to affect pricing to customers this year? Fuel the biggest one. 175 hp tractor here on the road is using £5-£6/hr more fuel at 80p than 50p as an example. Some may say use farmers fuel but if you're running modern kit on GTL it's not really an option to go to an unknown tank and put something in that may cause filter issues.
I'd say most prices until back end of last year are/were based on fuel at a max of 50p/l? So do we work out fuel usage and add anything over the 50p onto the previous price as a minimum (before taking labour/machinery into it). Will the customers pay? Interested what other contractors for anything from cultivation work to silage/muck are thinking of doing.
You will just have to add on the extra fuel costs, nobody can expect contractors not too. I would think carrying the fuel debt until the farmer pays his bill is going to be hard enough on its own. Will contractors risk telling farmers before they do the job though?!
 

AlfM

Member
Mixed Farmer
Location
Norfolk
You will just have to add on the extra fuel costs, nobody can expect contractors not too. I would think carrying the fuel debt until the farmer pays his bill is going to be hard enough on its own. Will contractors risk telling farmers before they do the job though?!
I’ll be telling them hence why thinking about it now before spring cropping starts round here.
 

Bvrb89

New Member
My average price for fuel last year was 57p. Filled up my tanks at 75p this year and hoped it would drop back down. Haven’t increased charges yet as I did increase prices last year but this has already been wiped out with fuel at 75p. I shall be keeping an eye on fuel price for the next couple of weeks/month. But can see me having to introduce a fuel surcharge at what ever price I buy it at. No good filling up on farms as I don’t just stay on the same farm all day… and sone customers don’t have their own diesel.
Next issue is that all costs are going up… not just fuel. Wages are increasing, repaires, maintenance. Price of new or second hand kit is skyrocketing.
Can see customers not being happy with a bigish increase but I can’t work at a loss so there could be some tough conversations ahead
 

willyorkshire

Member
Arable Farmer
Location
East Yorkshire
Share farming agreements are more robust way of contracting. Share the pain, share the gain. It's anybody's guess how this is going to turn out. Feed wheat will be over £300 when markets open Monday, N is going towards £1000. IMO it's the fert pricing in usual June start that will be difficult. June 21 N now looks very cheap(!) Tinkering with rates won't make much difference but the fert:grain ratio will be critical. The longer the war, the higher the prices will rise. Until we can't afford the N. Will any grain exit Black Sea ports anytime soon? Probably not.
Back to the thread - produce a spread sheet for contract charge vs fuel price. Kind of price tracker. Fair to both parties in very tricky times?
 

PB1507

Member
Location
Lincs
Your spread sheet will also need to include the rising cost of repairs, tyres, labour etc , with some sort of equation to keep your prices competitive with the man who isn't taking account of rising prices or the need to make a profit. 😭 😲
 
It's very simple, bill for the job and either take the farmers fuel or bill the litres of fuel separately, that's what most do here.

I don't see why this is so confusing for so many.
Because it’s not just the fuel going up fitters filters oils grease tyres
 

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HSENI names new farm safety champions

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Written by William Kellett from Agriland

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The Health and Safety Executive for Northern Ireland (HSENI) alongside the Farm Safety Partnership (FSP), has named new farm safety champions and commended the outstanding work on farm safety that has been carried out in the farming community in the last 20 years.

Two of these champions are Malcom Downey, retired principal inspector for the Agri/Food team in HSENI and Harry Sinclair, current chair of the Farm Safety Partnership and former president of the Ulster Farmers’ Union (UFU).

Improving farm safety is the key aim of HSENI’s and the FSP’s work and...
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