- The National Association of Agricultural Contractors (NAAC) has released its latest survey of contracting prices and overall results highlight that price rises are inevitable this spring.
- The new prices survey for 2023 can be found at https://www.naac.co.uk/pricesguide/
Whilst the UK inflation rate is currently over 10%, the NAAC survey has highlighted more modest increases in contracting rates. Whilst there is no ‘one size fits all’, overall soil preparation costs have increased at just over 4%, with the drilling category going up almost 3.5% since last year. Within individual services, however, due to the nature of surveys, some prices have increased substantially whilst other have barely shifted.
The costs of fuel, labour and inputs have continued to increase however, and the NAAC is advising its members to review all their pricing structures to ensure they can remain profitable. Only then can they provide farmers with a professional standard of service, rewarding loyalty with well-maintained kit and skilled, conscientious labour.
Commenting Jill Hewitt, NAAC Chief Executive said, ‘It is simply not defensible for prices to stand still this year. Farmers should be entering into conversation with their contractor to ensure that price rises allow both parties to run sustainable businesses, whilst moving forward in terms of productivity and technology.’
The NAAC is encouraging members to use an NAAC on-line pricing tool, developed with Andersons Consulting. This allows contractors to evaluate each operation, considering all costs, so that they can see the cold, hard facts for each job. The tool takes account of numerous variables such as depreciation, repair costs of individual machines, yard costs, insurance and office staff, before breaking each job down, taking into account fuel costs, area of work, work rate, labour, downtime and profit. This allows quotes to be made, backed up by statistics, to get to a price that is realistic.
Inevitably contractors must find the right balance to retain a loyal customer base, whilst keeping up with inflation and helping their customers achieve optimal productivity, whilst running safe and efficient contracting businesses.