Cherish your contractor while you still can

The number of quitters in the agricultural contracting sector continues to increase steadily. This sometimes creates a regional capacity shortage, the consequences of which may be felt by dairy farmers in particular this season. Therefore, cherish your contractor. It is no longer a given that he is always there for you.

I'm the first to admit that the headline above this article is a bit dramatic, but you read it now. And I'm very happy about that. I would like to explain why. I would like to stand up for the contractor. A very current topic this season.

Two news events prompted this opinion piece. First of all this article from an Irish agricultural trade magazine. It talks about a serious shortage of contractors on the island. More than fifty agricultural contractors have quit in the last few years. That is a lot for such a relatively small country. Therefore, a shortage of available contracting capacity is expected for mowing, raking and chopping, to name a few.

many stoppers
The other fact is a conversation I had with a large machine manufacturer. They build and sell haymaking machines and are seeing more and more large contracting companies that are mainly active in the (dairy) livestock sector dropping out. It is said that in some parts of eastern Netherlands and Friesland it is becoming exciting whether all dairy farmers will be served on time as soon as the first cut of grass appears. In recent years, quite a few contractors have stopped, downsized or taken a different direction. That takes a bite out of the available capacity, because it is precisely the large, professional companies that are giving up.

Exact figures on the number of (agricultural) contracting companies are not easy to find and often change. The number 3.000 comes up a lot, but also 2.000. Trade organization Cumela claims (annual report 2022) to have 1.923 members. If you dig a little further into the history, you will come across figures that show a wave movement over the decades among contracting companies. The number of farmers with contracting activities is much larger. According to CBS figures for 2023, more than 6.000 of the 50.900 agricultural companies have contract work as a side activity.

Professional contractor stops
As mentioned earlier, it is – at least in my opinion – that it is surprisingly often the large and professional entrepreneurs who decide to say goodbye to agricultural contract work. As a result, farmers are forced to look for another party to have the work carried out. You might say that this offers opportunities, but a lack of time and especially of personnel limits the possibilities.

The subject of personnel, together with the uncertainty in dairy farming, is the most frequently heard argument. Although companies have been forced to increase rates, it is still not easy to earn a good living. Certainly not with wage and machine costs that are constantly rising. These are precisely two crucial factors in the cost price for a contractor. A farmer who invests in expensive land sees his investment steadily increase in value, while the increasingly expensive mechanization is sharply depreciated. It is not without reason that operational leasing is much more popular among contractors than among farmers.

Appreciation
The 'elephant in the room' that we have not yet discussed is the mentality towards the contractor. Too often, the contractor is seen as a problem solver. He or she may show up if the potatoes can no longer be harvested with their own harvester or if the grass needs to be put into the pit quickly when it starts to rain. Farmers who are used to switching regularly in order to keep costs low can be disappointed when there is a labor shortage. A few minutes' break for a cup of coffee and cake is a small effort but a great gesture.

The decline in the number of contracting companies is likely to continue steadily in the coming years. There will undoubtedly be starters who take up the challenge again, but the danger of a capacity shortage remains in some regions. Large arable farmers or dairy farmers generally carry out more work in-house, but they too are fishing in the same tight workforce pool. Therefore, cherish your contractor while you still can.

Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.