The Association of Farm and Forestry Contractors in Ireland (FCI) has issued combine harvesting costing guidelines for members, against the backdrop of increasing agri-diesel and machinery costs.
FCI says that agri-diesel quotes this week are averaging at €1.50/L including VAT, an increase of over 100% since the cereal harvest of 2021.
The fuel cost component of cereal harvesting has increased from a minimum of €6.50/ac to €15-18/ac, solely as a cost of fuel price inflation, the association says.
The FCI estimates that the breakeven rate for a contractor operating a combine harvester for 2022 will be €80/ac including VAT, before straw chopping.
This is based on FCI research showing that, in typical Irish weather conditions, a modern combine harvester will get through 50ac/day. For a combine harvester operator aiming to harvest 1,000ac, this equates to 20 full harvesting days/season.
With an average fuel tank capacity in a modern machine of 1,000L, these harvesters will have enough fuel in one filling to cover two harvesting days, with 10L to 12L of fuel consumed/ac, depending on crop or fuel conditions.
The fuel consumption will be 50% higher when straw is being chopped by the harvester.
Michael Moroney, the FCI’s chief executive, said: “This converts to an annual combine harvester running cost of €70,000/season, over 1,000ac, for a modern combine in a contractor’s fleet.”
The most significant combine harvester annual running costs are depreciation (28%), agri-diesel (21%), finance repayments (21%) and labour (14%), according to the latest FCI research.
The association claims that “no other sector of the Irish economy” has experienced such high levels of fuel cost inflation as have been experienced by farm and forestry contractors.
“The increases in the costs of agri-diesel have been more significant than road diesel cost increases, where the bus and road haulage sector has also benefited from fuel rebate subsidies,” Moroney said.
The FCI reiterated its call on Minister for Finance Paschal Donohoe to allow contractors to avail of a tax credit for the carbon tax component of agri-diesel, as is the case for farmers.
It is also calling for that allowance to be linked to diesel exhaust fluid (DEF or AdBlue), to “support further climate ambition within the sector and deter some from shutting down their DEF systems”.
The association says that the cost of DEF has tripled in the same period as agri-diesel costs have doubled. FCI estimates that the cost of AdBlue will add more than €8 million to contractor costs in 2022.
“FCI continues to advise all contractors to examine current costs of operation, in particular by monitoring fuel consumption levels, to establish their individual costs for 2022,” Moroney said.
“In our current high inflation economy, farm contractor charge rates must be based on a realistic examination of the true cost of operating combine harvesters and tractors, as well as the costs of running a progressive rural enterprise that provides skilled rural-based employment,” he added.