Calculating The Cost Of A Hedge Cutter

Have you ever wondered how contractors work out what it might cost to run a tractor and hedge cutter?

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Most hedge-cutting contractors charge between €45-€55 plus VAT for flail hedge cutting. From the farming side, it is a useful exercise to see how contractors decide on a figure that is both fair for the contractor to make a profit and for the farmer to get a good service.

The FCI recently published an analysis of the costs involved in running a tractor and hedge-cutter in an edition of their membership magazine, Wheels & Fields. The analysis uses the example of a modern 150hp tractor and a heavy duty contractor-spec hedge-cutter. In terms of the tractor, the FCI calculates that a typical 150hp model will cost around €10 per clock-hour (suggesting that it would cost around €30,000 to trade-in and replace such a tractor if it had 3,000 hours on its clock). So the tractor ownership cost that essentially covers depreciation comes to €10/hour.

For labour, the FCI calculates that to pay a hedge-cutter operator €500 into his/her hand would 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 €5.04/hour based on a current green diesel cost of €0.72/L).

Looking at repair costs, the FCI says that these are generally calculated at between 3pc and 5pc of the machine’s buying price and spread across the season. In the case of a €100,000 tractor, that amounts to around €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, this is an hourly cost of €1.50/hour.

Cutting hedges last week for a farmer in Tramore, Co Waterford

Cutting hedges last week for a farmer in Tramore, Co Waterford

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

l Tractor (capital) cost (€10/hour X 40 hours) – €400/week;

Labour cost (€18/hour gross X 40 hours) – €720/week (gross);

l Fuel cost (7L/hour = €5.04/hour based on a cost of €0.72/L) – €202/week;

l Repair cost (€3/hour X 40 hours) – €120/week;

l Insurance cost (€1.50/hour X 40 hours) – €60/week;

Total tractor operating cost (€37.55/hour) – €1,502/week.

Hedge-cutter costs

When it comes to working out how to charge for the hedge cutter, the FCI says it has employed an approach that’s been used in the construction machinery sector for decades. This 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. For a higher spec machine costing €50,000 to buy, the cost is €25/hour.

Special sports turf tyres to protect soft ground

Special sports turf tyres to protect soft ground

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

* Total tractor operating cost – €37.55/hour;

* Total hedge cutter operating cost – €15/hour;

Total tractor and hedge cutter operating cost – €52.55/hour.

(Source – Irish Independent – Indo Farming – Derek Casey – 07/03/2020)

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