In order to compile the annual Irish Farmers Journal contractor charges table, we ring a large number of contractors operating in different counties. We aim to give a spread that reflects the real charges being paid to contractors and it varies by county. You will note that there are differences quoted and some of these are present due to intense competition as a result of a plentiful supply of machinery.

Other differences are accounted for by the scale of the job being done – there are always better rates when the job is bigger and there should be better rates encouraged for early payments.

Contractors are regularly caught in a cost/price squeeze where they are price takers and often the poor relation when it comes to rate and getting paid. A new element entering the discussion this year is that of diesel prices.

Contractors report that Teagasc and independent advisers are encouraging farmers to seek lower costs for major jobs such as silage contracting, compared with last year’s rates when diesel prices were at an all-time high. Contractors are not impressed. They see diesel costs creeping up week by week, with some reporting a 10c/litre increase in the last two weeks alone.

Contractors are quick to point out that when diesel prices rose last year, they were unable to get any increases in their charges. It is still March and we don’t know what the diesel price will be for the silage-cutting season, which is the season of highest diesel demand. Contractors are slow to agree prices and who can blame them?

With diesel accounting for between 20% and 30% of the overall silage operating cost, it’s a significant input. On the other hand, with high output systems, the diesel cost difference on a per-acre basis is marginal.

Contractors we spoke to were clear that the differences are down to cents per acre rather than euro, in terms of the real savings to them from the lower diesel rates. They are also clear that May diesel prices have not yet been set, so agreeing a lower silage-making charge at this stage is unwise, to say the least.

There are small differences in the quotations this year compared with last year, but they are not significant. It is now obvious that there is an over-supply of hedgecutters in many areas, making it difficult to be profitable on some of the lower rates being quoted.

Slurry work is also price-competitive as higher-output umbilical or pumped pipe systems can achieve very high output rates, even if set-up time and costs have to be included. So far this year, weather has been kind to contractors. There is a lot of slurry being moved and grass growth is steady, while tillage work is slower.

Talking to contractors over the last week, they are all studying the new GLAS scheme with great interest. We would expect to see contractors investing in trailing shoe and dribble bar low-emission, slurry spreading systems in the coming months as farmers can avail of grant aid for using these systems. In an ideal world, farmers should be grant-aided to employ well-equipped farm contractors to provide this service. The benefits are obvious – better machinery utilisation, more field efficiency and the opportunity to invest in high-output systems.

Irish contractors have always responded to opportunities to deliver greater farm efficiency for their customer. Look at the uptake of self-propelled silage harvesters in the past and, more recently, the uptake of high-output round baling systems. The targets are the same – getting more output from the machine and the driver for higher quality, with farmers getting the full benefits.

Now it’s time for the slurry sector; the practice of supporting low-emission and more environment-friendly slurry spreading systems is well established in Germany. There is an opportunity to repeat that success in Ireland. Contractors will respond by tooling up with higher-output systems as long as some of the grant aid benefits flow in their direction.

Lack of technology in slurry spreading systems is in stark contrast with our European counterparts.

This is a new opportunity where contractors can learn from the German experience. There is time to plan success for contractors, farmers and the environment.