Is contracting profitable? …. and major manufacturers reducing workforce

[AlCapone]

Yesterday I was talking to a farmer contractor, he said this is his last year for baling and wrapping because it is not profitable despite a reduction in cost of plastic from 2 years ago
He said another local contractor has sold all his harvesting machinery
Another contractor cannot justify changing his self propelled machine
Also just read online that big manufacturers across the pond, John Deere, agco and CNH are laying off workforce because of downturn in business

 

[box]

Is contracting profitable?​

No. For some reason, the contractors would rather go out of business than put their prices up....it's all a bit strange, really.

Just read about the layoffs today. Not really surprising, sales are down so it was going to have to happen at some point. What better way to stop the price from dropping than to reduce supply?

 

[icanshootwell]

There has to become a point when buying expensive kit doesn't earn enough money for what the monthly payments are, some are just turning money over and when it's time to trade up it can't be justified.

 

[Kevtherev]

The Shrinkage of farming and loss of livestock units is having an effect on spending in agriculture as a whole.
Lot of big farms are doing a lot of jobs in house now and not using contractors.

 

[icanshootwell]

The Shrinkage of farming and loss of livestock units is having an effect on spending in agriculture as a whole.
Lot of big farms are doing a lot of jobs in house now and not using contractors.

A lot of bigger dairy farms now have there own self propelled chopper, I can only see a massive slow down in uptake for £300 k plus machine's

 

[Kiwi Pete]

Can be profitable but it's not a given, there's a big difference between doing some work with paid-for machines, and getting through a whole heap of work to make money for finance companies and suppliers

In many ways, just like farming but without a bit of land to do it on, for every good operator there are many who have you wondering how they're still going

 

[40 series]

I’m sure there is money in it. Crowd near me have their 3rd spfh on the go this year. They wouldn’t have bought number 3 if it wasn’t needed. I suppose cash flow is a major thing and year round work load. If any business is ran right it can be profitable. Is contracting much different than a haulage business for example

 

[Horn&corn]

I’m sure there is money in it. Crowd near me have their 3rd spfh on the go this year. They wouldn’t have bought number 3 if it wasn’t needed. I suppose cash flow is a major thing and year round work load. If any business is ran right it can be profitable. Is contracting much different than a haulage business for example

A lorry can find work 364 days of the year. Spfh 80?. More if desperate for work

 

[hoff135]

I’m sure there is money in it. Crowd near me have their 3rd spfh on the go this year. They wouldn’t have bought number 3 if it wasn’t needed. I suppose cash flow is a major thing and year round work load. If any business is ran right it can be profitable. Is contracting much different than a haulage business for example

A firm I know near me has a lot of 360s on the go, started as a one man band only a few years ago, now doing work all over the country and seemed very busy.

Always looked up to people like that, yet only last week I heard they may be about to go bust. You really never know what's going on

 

[puppet]

Our farmer/ contractor has a bigger spfh this year and new 200hp valtra. Well established and well run

 

[daveydiesel1]

I wouldnt want the torture of running a contracting fleet, staff problems,breakdowns,wrecking, impatient customers,bad weather,problems getting money in etc. Would turn my head

 

[BrianV]

A firm I know near me has a lot of 360s on the go, started as a one man band only a few years ago, now doing work all over the country and seemed very busy.

Always looked up to people like that, yet only last week I heard they may be about to go bust. You really never know what's going on

Much as with farming the weather can make or break a contracting business & it is becoming more unpredictable.

 

[Magnus Oyke]

Can be profitable but it's not a given, there's a big difference between doing some work with paid-for machines, and getting through a whole heap of work to make money for finance companies and suppliers

In many ways, just like farming but without a bit of land to do it on, for every good operator there are many who have you wondering how they're still going

The current machine may well be paid for, but you have to charge enough to finance its replacement. For as long as I can remember people have wanted to get into contracting, often with dad's tractor, just it seems, to drive around on large equipment. I'd buy my own tractor tomorrow, but the £200,000 I would need to buy one would need to out pace the £200,000 in my pension or I might as well not bother.

The manufacturers having to lay off staff won't get much sympthay from me, quite how they thought £1,000/hp was sustainable is anyone's guess.

 

[Kiwi Pete]

The current machine may well be paid for, but you have to charge enough to finance its replacement. For as long as I can remember people have wanted to get into contracting, often with dad's tractor, just it seems, to drive around on large equipment. I'd buy my own tractor tomorrow, but the £200,000 I would need to buy one would need to out pace the £200,000 in my pension or I might as well not bother.

The manufacturers having to lay off staff won't get much sympthay from me, quite how they thought £1,000/hp was sustainable is anyone's guess.

Correct.
That's why I say "can", as you can actually set your price and you can actually just take on the work you want.

What makes it unprofitable is keeping your price too cheap so that you have far too much work on and end up doing just bigger, rather than doing better.
And then turning up all beacons and wide wheels to mow a mismanaged acre for a skinflint who thinks their job's worth £28.40 and their problem is your problem now

Again that's a lot like farming, some people choose this way and others choose that way.

 

[deere 6600]

Every contractor does it cause they want to and I admire there enthusiasm in our area a lot of rumbling about guys getting fed up I helped one for a few years and know the grief they go through

 

[feilding]

Some contractors seem too slow billing the customers. Billing should be end of month work done. Not just before Christmas for the year. Fuel/ hp payments/labour are mostly monthly, contractors are not charities.

 

[warksfarmer]

Yesterday I was talking to a farmer contractor, he said this is his last year for baling and wrapping because it is not profitable despite a reduction in cost of plastic from 2 years ago
He said another local contractor has sold all his harvesting machinery
Another contractor cannot justify changing his self propelled machine
Also just read online that big manufacturers across the pond, John Deere, agco and CNH are laying off workforce because of downturn in business

Its the manufacturers own fault. Taking the p**s for so long. Theyve shafted their dealers and shafted their customers.

 

[ED.D]

It’s a very sweeping statement but the cost of the tools needed to do the job no longer reflects the risk involved or the return on investment.

i don’t race round contracting as such but have stopped a lot of what I do this year as my health hasn’t allowed me to do to much and as it happens the biggest chunk of agri work I do has gone due to the land being sold, I’ve enjoyed what I’ve done and made some money but I look around and im not sorry to see it go.

 

[Bury the Trash]

Yes shearing pays , and any other manual work that most don't want to do ,like small fencing type jobs wher you don't need a big tractor and knockef or self propelled wonder machine, or even so called qwik fencers.
As is hoof trimming if you are qualified.good crush costs a bit though but no running costs after.
Or things like laying concrete or falling trees that no others want to , lol.

Plenty of paying contract work out there, might not be in that comfortable greenhouse environment with your arse on a seat though.

 

[glasshouse]

Correct.
That's why I say "can", as you can actually set your price and you can actually just take on the work you want.

What makes it unprofitable is keeping your price too cheap so that you have far too much work on and end up doing just bigger, rather than doing better.
And then turning up all beacons and wide wheels to mow a mismanaged acre for a skinflint who thinks their job's worth £28.40 and their problem is your problem now

Again that's a lot like farming, some people choose this way and others choose that way.

Yes, you can set your price to make a profit and then sit and watch every one else steal the work