Contractor charges rise 5% for 2025

Contractor charges are up by 5% for some services in 2025, while other charges remain virtually unchanged, according to the Association of Farm & Forestry Contractors in Ireland (FCI) annual price guide, published this week.

The 2025 guide lists 98 services that are provided by agricultural and forestry contractors in Ireland in 2025.

“Profitability remains elusive to many agricultural contractor businesses in 2025, as they struggle to reconcile higher machinery, finance and labour availability with their ambition to deliver a highly skilled and professional service to their farmer clients,” said John Hughes, FCI national chair.

Increasing costs

In its report, the FCI warned that the increasing costs of new machinery for contractors continues to impact on the sustainability of many Irish agricultural contracting businesses.

“Our sector has experienced continuing machinery cost inflation into 2025, while the increase in the costs of machinery spare parts prices remains on an upward trajectory,” Hughes said.

“Contractors also have new and additional costs in 2025, with the combination of the minimum wage increase impact, along with the new legal requirements around the provision of pension funding for employees, due in September 2025.

“These are additional increased costs that all agricultural and forestry contractors have to factor into their 2025 operational costs,” he said.

The association warned: “Fuel price uncertainty remains an issue for agricultural and forestry contractors, and it demands a level of flexibility and understanding from farmer clients at a time of unstable world supplies.

"While fuel prices have risen slightly as we start into 2025, against a background where they stabilised during much of 2024, there are no guarantees that world affairs will not bring about new increases, when the sector has no other fuel or power supply options.

“Additional national Government increased fuel taxes, in the form of a further carbon tax increase in May 2025, will mean a further increase in fuel costs of up to 12c/l, before VAT, during the 2025 season.”

There is a noticeable scarcity of young people joining the agricultural and forestry contractor sector.

“Our sector demands higher levels of skills as we transition to greater use of technology to increase output and timeliness of work with lower numbers of operators,” said Hughes.

“Our agricultural and forestry contractor sector is now a technology sector that uses modern machines in the field and in the forests to achieve high output and cost-effective results, with a level of traceable digital foot-printing that was unknown 20 years ago.

"FCI is seeking the implementation of a training and registration programme for the sector to provide long-term structured technology training for tractor and machinery operators,” he added.

Spend per farm

The latest figures from the Teagasc National Farm Survey for 2023 showed that the average amount spent on contractor services by Irish farmers increased to €7,340 per farm in 2023, up from €4,162 in 2015.

FCI says that this significant spend increase has come at a period of high machinery cost inflation and other cost increase on farms. It added that despite this, the cost of contracting services to Irish farms remains at a very competitive 14% of total direct costs, according to the Teagasc data. This data also indicates that in 2023, Irish farmers spent more than €950m on agricultural contractors’ services.

“Irish farmers spent a significantly higher amount on machinery operational and depreciation costs, according to the Teagasc figures. These combined overhead costs across all farms in the Teagasc survey was double the contractor costs and accounted for 37% of overheads costs on farms. This confirms the value that Irish agricultural contractors provide to their client farmers,” said the association.

Guide prices

In publishing the FCI Contracting Charges Guide for 2025, the association of Farm & Forestry Contractors in Ireland (FCI) is satisfied that this averaged price guide continues to provide fair and reasonable guidance for both farm and forestry contractors and their client farmers.

FCI says it must be emphasised that this is only an information guide.

FCI has produced these guide figures on an annual basis by collating an average figure for each operation from a panel of FCI contractor members from across Ireland.

It notes that because of the local differences, the actual guide charge may vary between regions, across soil types, distance travelled, size of contract undertaken, size and type of equipment used, as well as the scale of the work done.

For these reasons there are bands in each segment of the guide.

This year again sees the FCI Contracting Charges Guide for 2025 feature excluding and including VAT columns, as an increasing number of farmers are moving towards VAT registration, especially those that have moved to limited company status.