Exfarmer
Member
- Location
- Bury St Edmunds
But another way of looking at. It, and it’s the same in the ag contracting business, is that by going out undercutting other businesses just to get the work is not competition at all. If it’s done by other contractors out to get the work for whatever price they can get, it is greed and desperation. But not only that, it encourages all farmers to forget about that very important word “loyalty”.
I have experienced this myself in the last couple of years. A contractor nearby went out and bought loads of kit and has gone round cheaper than everyone else just to get the work to justify the kit he now has. Figures such as £15/ac for a sp forager, £28/hr for a 200hp tractor and 16T trailer etc etc. Yes you can argue he will only last so long, but in the meantime, how many other good genuine businesses will say balls to this and get out. The farmer in the meantime is happy, and prices will creep up without him noticing too much, but at some point the next guy with a point to prove and inherited money to burn will come along and undercut the first chap. And the farmer naturally will go to the new guy as he’s cheaper. Meanwhile the guy that originally did the work who charged a realistic rate and did a good job, has folded altogether. At some point it will all come to an abrupt halt for the genuine contractors, and all that will be left will be those that have built and are building businesses on money from elsewhere and vast amounts of credit. This isn’t competition at all. This is the slow demise of the industry.
Slightly wandered off topic there. Apologies to the OP!!
It has always been the case, who do you blame, the young contractor who is trying to carve a niche for himself, working the machine 24/7 to try and get a living, or the farmer trying to save himself a few bob.
To blame the contractor for undercharging is as silly as blaming the farmer who has got a vast mortgage from buying land which will never make a return at the price he paid