Farmers and contractors are in line for a challenging silage season due to the huge fuel price increases and other increasing costs such as wrap.

The reduced availability of credit on such commodities will also prove challenging for the sector.

This week the cost of marked gas oil (MGO), or green diesel as it’s commonly known, has come back in price.

With huge variation in diesel prices nationwide, this week we have been quoted an average of €1.30/l, down from the highs of €1.60/l, yet well above the €0.75/l price it was trending at in November 2021, all including VAT.

Based on the diesel price increases alone, the complete job of mowing, raking, baling and wrapping (wrap supplied by farmer) using a front- and rear-mounted mower combination and a modern combination baler/wrapper is set to cost the contractor an additional €0.85/bale including VAT.

Contractor distance from the job in hand may further affect pricing.

Wrap is currently trading between €110 and €120 per roll including VAT, up about a third on last year when it averaged €88-90/roll.

Assuming one roll of wrap will cover 29 bales, last year it broke down to a cost including VAT of €3.10/bale while this year it will cost €4.14/bale based on the latest prices.

Increased costs

Based on today’s prices, the increased cost of wrap and fuel approximately amount to an additional €1.89/bale including VAT. These are costs that will inevitably have to be passed on to the farmer.

In January, before the trouble between Russia and Ukraine, the Association of Farm & Forestry Contractors in Ireland (FCI) published its 2022 annual contractor charges guide. The prices quoted had already been given a 5% increase on last year’s rates to meet rising costs such as tyres, labour and machinery etc, and were based on a diesel price of 0.75c/l plus VAT.

It originally guided a price for the coming season between €15-€16/bale for mowing, baling and wrapping (wrap not supplied). However, nobody at the time suspected prices to further soar in the fashion they did, diesel in particular.

The association is now advising its members to stick with these prices, while adding surcharge for the fuel, as is taking place in the haulage industry. The association’s prices are based on 0.75c/l, while this surcharge will add on a rate for the price of fuel the day the work is being carried out.