Increased costs of machinery, tyres, fuel and lubrication oils, insurance and labour have resulted in a need for price increases, The Association of Farm & Forestry Contractors in Ireland (FCI) says. They group is advising its members to increase their charges by 5pc in 2022.
It added that the increasing costs of new machinery for Farm & Forestry Contractors and their client farmers are impacting on the sustainability of many agricultural contracting businesses.
The FCI was of the opinion that there had to be an examination of machine operating costs, as additional machinery, replacement parts and tyre cost increases during 2021 and into 2022, have driven up machinery purchasing and ownership costs.
Michael Moroney, FCI Chief Executive Officer said that the, “FCI always advocates that all contractors should prioritise a detailed year-end analysis of their 2021 costs of operation in working out their individual charges for 2022. To ensure sustainability of the business, charges must be based on a realistic examination of the true cost of the operating tractors and a full host of machinery, as well as the costs of running a modern progressive rural enterprise.”
“An FCI silage cost analysis has shown that a modern contractor silage fleet will require a minimum rate of €140 per acre just to cover the depreciation, labour and operating costs which will also include a further Carbon Tax increase in May 2022. Contractors need to look closely at all costs to establish sustainable and realistic rates for their services when investing in modern farm equipment,” he said.
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