An agricultural contractor in Co. Donegal has warned that he may have to park up his machines if fuel prices continue to increase.
Shaun Friel, who runs S. Friel Agri-Contracts in Kerrykeel, employs up to six people during the busy summer months.
The company, which works in baling, silage, reseeding, hedge cutting, is currently spreading slurry for farmers.
“We’ve only got three or four machines working there at the minute, so we’re not really using a lot of fuel. 1,000 litres will last us a few days, whereas in the summertime, it wouldn’t last a day. The harvester alone would burn 1,000 litres per day,” Friel told Agriland.
The contractor estimated that his fleet would use an average of 6,000 litres of fuel per week during the silage season.
Fuel
Shaun Friel explained that fuel prices had been “gradually creeping up” but have “gone through the roof” in recent weeks.
“18 months ago, I was able to fill the 20,000 litre [fuel] tank for €10,600. And then three weeks ago when I ordered it had gone up to €19,200.”
Friel has heard of recent quotes from fuel suppliers as high as €1.80/L for green diesel. At that price, it would have cost him €36,000 to fill his fuel tank.
“Since then, I’ve stopped looking at the prices because it would depress you.”
The contractor explained that 13,000 litres of his order was delivered by his supplier which will “keep us going for a while”.
“It’s very hard to know what way it is going to go. In the tank at the moment there’s probably 15,000 litres of diesel. When that 15,000 litres is burned if the diesel is much dearer than today I would imagine that we will not be buying anymore, we’ll be parking up.
“I can pass the price onto the farmers, but the farmer doesn’t have the money to pay.
“The farmer has to take the prices he is given for his produce. If he doesn’t like the price, he has no choice but to take it. If he doesn’t have the money because his costs outweigh what he is getting, where do I draw the line?
“I can buy diesel at €2/L and charge a farmer €200 an hour for spreading slurry. But he only has a certain amount of produce to sell and if that doesn’t cover his costs he may carry it for one year. He definitely can’t carry it any longer,” the contractor said.
Excise duty
In his 17 years in the business, Friel told Agriland that he has never seen so much pressure on the agricultural sector due to increased input costs.
The contractor described a recent move by the government to cut excise duty on green diesel by 2c/L until August 31, 2022 as an “insult”.
“2c/L is a joke. The government wants the farmers to grow crops and feed the nation and they’re doing everything they can to keep us from doing it. Fertiliser is gone through the roof – you can’t even get it,” Friel stated.