By Katrina Macarthur

k.macarthur@thesf.co.uk

WITH the silage season having kicked off in the south west of the country and those further north preparing to get going in the next few days, contractors and farmers have been faced with significant agricultural diesel price hikes as red diesel prices are now at their highest level since the start of the year.

Price hikes have been driven by the rapidly rising cost of oil which has hit $80 (£60) a barrel for the first time since mid-November 2014 and further rises could be expected if the barrel price rises to $100 (£75) again – a price last seen in August 2014.

Duncan Russell, chief executive of the National Association of Agricultural Contractors said that costs will increase substantially for the industry and that contractors will be left with no option but to put up their prices.

"Contractors will be looking to review their prices as they enter a high usage period with their machinery and this could lead to farmer resistance. We're left to suffer with the results of the political situation in the Middle East when the cost of raw materials rise and the value of the pound strengthens."

Stranraer-based contractor, Brian Paxton who has already cut 900 acres silage but still has around 11,000 acres to cut, said: "Most of our silage and slurry work is carried out using the farmers fuel whereas we tend to use our own fuel for the likes of sowing. I had a customer phoning about silage work this week and he was quoted 61p per litre for red diesel which puts huge pressure on them when we're using so much of their fuel.

"As soon as the currency is back, the price goes through the roof. Such hikes could result in our fuel costs jumping by around 40%."

Morayshire contractor, Davie Nicolson, who puts roughly 1300 of silages through his Strautmann wagon and bales approximately 25,000 acres of bales each year, also weighed in on the impact it could have on his business.

"We've just filled up the tank this week and it cost 69p per litre. Unlike the sowing operation, we use our own fuel for silage, rather than the farmers so this will definitely result in us having to review prices. I'm just grateful this sharp increase happened after sowing.

"The price of fuel always goes up in twos and threes and goes down in ones. There never seems to be the same rush to drop the price when the price of oil falls."

It's a similar situation across the pond as Farm and Forestry Contractors in Ireland reported that some of its members were being quoted diesel prices of €0.75 per litre including VAT, up from €0.55 per litre at the same period last year.

FCI National Chairman, Richard White said: "Contractors will be forced to pass on this 36% increase in diesel costs to their farming customers, pushing up the cost of silage harvesting at a time of intense pressure on national animal forage stocks. At FCI we are concerned that this increase will impact on the volume of silage harvested as our members will be forced to increase their silage harvesting charge accordingly."