Pressure is building on farming contractors
Labour shortages and rising fuel costs are becoming big challenges as the silage season progresses, reports
FARM CONTRACTORS are facing significant challenges on labour availability and costs as the silage season progresses.
“This is just one of a number of major issues that are impacting on the long term viability of silage making activities for many members of the Association of Farm and Forestry Contractors in Ireland (FCI) members,” said FCI national chair Richard White.
“Skilled machinery operators are being drawn back into the construction sector and that is once again a huge challenge for us agricultural contractors who can only offer seasonal driving opportunities,” he said. “Labour availability is just one a series of major problems impacting on contractor cash flow and longer term viability.
“Farmers are rarely aware of the real costs of running a modern contracting business, where the emphasis is on delivering an efficient service. The running costs for a farm contractor business don’t only involve labour costs, but all of the costs have increased making managing cash flow a real challenge for many contractors,” he said.
“If we don’t invest in re- liable machinery we cannot provide a quality service, at a fair price and with sensible payment plans, which is what we all, as contractors, aspire to,” said Mr White, as the FCI estimates contractors are owed €12m for work done before the start of the silage season.
“A set of quality tyres for a 150hp tractor costs upwards of €8,000 and that’s only one part of our investment as contractors in ensuring that we give a quality service to all our farming customers,” he said.
“Diesel cost increases are running at more than 12pc year-on-year and these additional costs are also impacting on contractor profitability in 2017,” said Mr White.
“Many contractors now have access to machine telematics systems to identify their true costs.
“We now know that a high output 10 acres/hour mowing combination will burn almost two litres of diesel per acre, while combination balers are burning close to two litres of diesel per bale.
“Larger self-propelled harvesters are using upwards of 12 litres/acre, so even with these modern and efficient machines the fuel costs for silage making are significant and far greater than many farmers will be aware of,” said Mr White.
This cost squeeze situation is coming at time when farm contractors are not eligible to take advantage of significant grant support for the purchase of new machines in the same way as many of their customers are.
TAMS schemes
“We have been denied grant support for the purchase of tillage and slurry spreading machines under the TAMS schemes and the recent tillage schemes,” he added.
“This is putting established contractors at a competitive disadvantage and is encouraging many of our long standing customers to invest in machinery, some of which they don’t actually want nor need and for which there is no economical or management sense for farmers to own.”
A shortage of skilled drivers and the recent hike in diesel prices were also identified as immediate concerns by Meath-based contractor Philip Heary.
“I always had a pool of half a dozen lads that I could call on but this year they’re not around,” the Kells man maintained.
“Some have gone full- time on the construction sites, while more of them have gone to Australia and New Zealand,” Mr Heary said.
“We have managed so far by changing drivers around to do different jobs,” he explained.
However, he said a shortage of good drivers was a real concern for contractors.
On diesel prices, Mr Heary pointed out that costs had increased from 52c/l to 63c/l (VAT inclusive) over the last 12 months. He said this was crucifying contractor margins.
I ALWAYS HAD A POOL OF HALF A DOZEN LADS THAT I COULD CALL ON BUT THIS YEAR THEY ARE NOT AROUND