FCI: How much does it cost to run a tractor and hedge-cutter?

The Association of Farm & Forestry Contractors in Ireland (FCI) has published an analysis of the costs involved in running a tractor and hedge-cutter.

The analysis features in the latest edition of the association’s membership magazine – namely ‘Wheels & Fields‘.

Also Read: Video: What separates these 4 new Deutz-Fahr tractors in Co. Cork?

In its preamble, the FCI urges contractors to “ensure that each individual enterprise [including hedge-cutting for hire] generates a profit”.

It goes on to say that “charge-out rates must be based on all operating costs”.

The analysis uses the example of a “modern 150hp tractor” and a “contractor-spec hedge-cutter with a 6m reach, joystick controls and full support brackets”. It says that operating costs largely remain the same, irrespective of who or what the customer is – a farmer; a local authority; or a utility company such as ESB Networks.

Tractor costs

Focusing firstly on the tractor, the FCI asserts that a typical 150hp model will cost between €10 and €15 per clock-hour (suggesting that it would cost in excess of €30,000 to trade-in and replace such a tractor if it had 3,000 hours on its clock/odometer).

The analysis states: “Being generous, the tractor ownership cost that essentially covers depreciation comes to €10/hour.”

For labour, the FCI asserts that to pay a hedge-cutter operator €500 into his/her hand would, in reality, cost the contractor close to €720/week (equating to €18/hour for a 40-hour week).

The analysis suggests that fuel usage (factoring in travelling to and from each job/contract) might amount to 7L/hour (equating to €4.90/hour based on a green diesel cost of €0.70/L).

Looking specifically at repair costs, the FCI says that these are “generally calculated at between 3% and 5% of the machine’s buying price – spread across the season”.

In the case of a €100,000 tractor, that amounts to (at least) €3,000/season or €3/hour (assuming a 1,000-hour annual workload out of which 11 weeks or 500 hours are allocated to hedge-cutting).

Insurance costs for a modern 150hp tractor are put at €1,500/year. Again, assuming a 1,000-hour annual workload (across all activities), this results in an hourly cost of €1.50/hour.

Combined, this results in the following tractor-related costs (40-hour week):

Tractor (capital) cost (€10/hour X 40 hours) – €400/week;
Labour cost (€18/hour gross X 40 hours) – €720/week (gross);
Fuel cost (7L/hour = €4.90/hour based on a cost of €0.70/L) – €196/week;
Repair cost (€3/hour X 40 hours) – €120/week;
Insurance cost (€1.50/hour X 40 hours) – €60/week;
Total tractor operating cost (€37.40/hour) – €1,496/week.

Hedge-cutter costs

The FCI says that it has employed an approach that’s been “used in the construction machinery sector for decades” to quantify costs directly associated with the hedge-cutter.

This, it says, is based on allocating a cost of €0.50 for every €1,000 invested. So, for a hedge-cutter that is €30,000 to buy, that results in a cost of €15/hour.

All of this, in summary, results in the following tractor and hedge-cutter costs:

Total tractor operating cost – €37.40/hour;
Total hedge-cutter operating cost – €15/hour;
Total tractor and hedge-cutter operating cost – €52.40/hour.

Diesel usage when cutting silage

In somewhat related news, the FCI recently published a document that detailed fuel (diesel) usage for a number of high-profile contracting activities.

Based on research carried out by the organisation, the figures suggest that a contractor cutting and ensiling pit silage (with all the associated equipment) typically uses 3,050L/day.

That’s based on the following (pit silage) assumptions:

Self-propelled forage harvester – 1,000L/day;
Loader and mower (combined) – 800L/day;
Five tractors and trailers (each) – 250L/day;
Total – 3,050L/day.

Interestingly, the document estimates that there are 700 such pit-silage outfits/teams spread across the country.

The document in question ultimately formed part of the FCI’s recent pre-budget submission; the intent (at that time) was to caution the Government against the imposition of increased taxes on green diesel.

The document also detailed fuel usage (estimates) for baled-silage systems – again based on the organisation’s own research.