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Farming contractors.

  • 05-11-2015 12:05am
    #1
    The Novice
    Registered Users, Registered Users 2 Posts: 10 ✭


    I notice that many farmers are now paying to have silage cut and bailed. It was wondering how much would it cost to set up a silage and bailing service and if it would be profitable seeing as most farmers have to pay about 10 euro a bail.


Comments

  • #2
    pedronomix
    Closed Accounts Posts: 997 ✭✭✭pedronomix


    Poor business opportunity, short season, all your clients want service on the same day,very large captal cost for high speed machinery. You would need to be a full service agricultural contractor to have any hope.


  • #3
    lucky john
    Registered Users, Registered Users 2 Posts: 838 ✭✭✭lucky john


    pedronomix wrote: »
    Poor business opportunity, short season, all your clients want service on the same day,very large captal cost for high speed machinery. You would need to be a full service agricultural contractor to have any hope.

    To add to the list. Farmers have paid to have silage and hay bailed for the last 40 years. The vast majority would use the same contractor every year. Even well known local lads that have tried to set up from new have struggled. Cash flow is a problem. Just like the work itself, getting paid is seasonal. The majority of farmers pay in the late autumn, months after the work is done. Not a business to set up on a whim.


  • #4
    The Novice
    Registered Users, Registered Users 2 Posts: 10 ✭The Novice


    I agree that it would be hard to get established at the start. My plan on that would be to under cut the existing providers on price. Also I would cut all my own silage to increase my own profit margin in cattle. If you calculate long term. Even if you cut your own silage and 5 other farms in the year, you will still end up better off than paying someone else to do it for you. I would be looking to buy functional equipment second hand, no frills but does the job.


  • #5
    _Brian
    Registered Users, Registered Users 2 Posts: 18,720 ✭✭✭✭_Brian


    The Novice wrote: »
    I agree that it would be hard to get established at the start. My plan on that would be to under cut the existing providers on price. Also I would cut all my own silage to increase my own profit margin in cattle. If you calculate long term. Even if you cut your own silage and 5 other farms in the year, you will still end up better off than paying someone else to do it for you. I would be looking to buy functional equipment second hand, no frills but does the job.

    Cash flow is a huge problem...
    The vast majority or farms hold off paying the contractor until the BPS/SFP payment comes in.. So they have to do a stunning job in May/Jun/July and then get paid in November (hopefully).

    You might work a deal with the finance company to have your payment in November/December, but diesel and wage bills for the busy months are staggering.. The small outfit that cuts mine has three operators and three machines drinking diesel, plus maintenance plus breakages. They were a few hours late last year because one lad cut a tyre on a gate hanger, it was beyond repair and I think he said it was €1000 for the replacement..

    You could farm the land you have and maybe pick up work with a contractor for the summer, it would generate additional cash, you'd probably get your own silage done at a good rate and you'd quickly see all the pitfalls of such work..


  • #6
    BnB
    Registered Users, Registered Users 2 Posts: 1,091 ✭✭✭BnB


    The Novice wrote: »
    I agree that it would be hard to get established at the start. My plan on that would be to under cut the existing providers on price. Also I would cut all my own silage to increase my own profit margin in cattle. If you calculate long term. Even if you cut your own silage and 5 other farms in the year, you will still end up better off than paying someone else to do it for you. I would be looking to buy functional equipment second hand, no frills but does the job.

    Firstly, capital costs are huge. I don't know what level of machinery you have at the minute, but regardless on what kind of a setup you are going for, you are going to need at a minimum:
    • 2 or 3 Decent tractors
    • A Couple of Trailers
    • Some kind of Loading Shovel yoke for around the pit
    • A Harvester
    • A Mower

    If you are going to go down the road of buying cheap machinery, you better be prepared to have your heart broken. You might get away with it if you were only tipping around with your own silage, but going out for hire - you'll be parked up more often than you'll be cuttin.

    Two bits of advice I'd give...

    1) If you are interested in contracting, maybe start a bit smaller. Cutting silage is probably the most expensive contracting business to get into. Maybe pick up a baler and wrapper. The season is longer and the investment isn't as much. Give it a season or two and see how it goes for you.

    2) Head over to the Farming forum and ask them there. Here is an oldish thread from there asking similar to yourself.... http://www.boards.ie/vbulletin/showthread.php?p=81845044


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