Farm Ireland
Independent.ie

Tuesday 6 December 2016

'Financially, we face more pressure'

Laois contractor Edward Thompson reflects on how the business is treating him so far this year

Neil Brady

Published 09/08/2011 | 05:00

EDWARD Thompson (49) is a stalwart of the contracting trade, having first started in the late 1970s with a Massey Ferguson 135 and side-mounted JF FC80. These days, it's a different ball-game and there is little that he and his team of eight staff don't handle during the peak season.

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"The seasonal jobs, such as silage making and baling, always keep us very busy at certain times of the year, but it's the jobs such as hedgecutting and dung spreading that there is a growing demand for throughout the year," Mr Thompson said.

"We've found that farmers who once had equipment for most jobs on the farm have now decided to sell it on, or not replace it when its lifespan comes to an end.

"This has opened new opportunities, where we're doing jobs that were once not so popular for us."

With a demand that exceeds the capacity of even the most productive of men, Mr Thompson's staff understandably increases from three to eight at its peak.

"One of our staff has been with us for 16 years," he said. "He's very much a cornerstone of the business. Where he goes we go too, we couldn't work without him at this stage."

The Laois team sell their work on a good reputation built up from long-term relationships with clients.

"The bottom line with farmers is that they want a good service provided. Repeat business is what sustains us," Mr Thompson said.

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He warned of the dangers of dealing with new cut-price operators that spring up all the time.

"There are always new lads to the scene," he said.

"The turnover of these operators is quite fast. They're only here for a few years and they are gone. Most of them don't know how to cost up a business. They undercut everyone in their area and cause many decent operators to go out of business. After a few years they go bankrupt as their rates are unsustainable."

Mr Thompson is also a big advocate of the benefits to contractors of being a member of the Professional Agricultural Contractors' (PAC).

"I would encourage all contractors to join the PAC," he said. "It is a nominal annual charge and in return we have a voice on important issues such as keeping the VAT rate as low as possible.

"We're a small group, often battling with each other on prices, but if we become divided we will all eventually fall."

In terms of staffing, there has never been any problems sourcing workers.

"It's always been difficult to get the best of the best, but sourcing good workers is not a problem for us," he insisted.

Their wages have held steady in recent times too, not something that every employee has experienced.

"While financially we're facing more pressure, we've managed to keep the pay rates fairly steady," he claimed.

HAPPY

"I try not to take on lads that we don't need, this helps to keep everyone happy in the long run."

The cost of fuel is one of the biggest factors affecting contractors at the moment. With diesel prices soaring, the price of getting a job done has risen accordingly.

"As with the wages, we've tried to hold steady on our prices too. They have gone up very little in the past few years, but eventually they will have to edge up if the cost of fuel keeps rising.

"Thankfully, financing hasn't been too much of an issue for me. I've always liked to keep on top of my purchases, instead of having to splash out big money every few years. There is hardly a contractor in the country that doesn't have borrowings. Interest rates from the banks have only added to woes."

Mr Thompson's recent buys include three new mowers.

"I generally get about three years out of my mowers," he said.

"They're high-maintenance machines, so after about three years they become expensive to run."

These mowers are worked on a pair of John Deere tractors, a 6630 and a 6530, while the operation also runs a 2008 Class 870 combine. Both of the tractors are sporting the latest in GPS technology, although the team tends to work without it.

"You can't beat a man with experience, we find that the job is done better when a good eye is on board," he said.

When asked about a business plan for the next 12 months, Mr Thompson said it would be foolish to base too much on predictions. "We'll see how the year goes," he said.

"We respond to demand when it arises but I don't expect any massive financial outlays in the next few years.

"Working off last year's figures will be a good guide, but we have to take into account the constraints that everyone is facing at the moment."

For now, Mr Thompson is just hoping that the second half of the year goes as smoothly as the first.

"We seem to be getting through the work easier this year, for the same amount of effort," he said.

Long may it last.

Indo Farming