Chapter 1: What impact do oil price spikes have on farming?
8 degrees and blustery here, 26 degrees and contentious in the Straits of Hormuz as you've been hearing in the headlines there. Farming is very much at the sharp end of oil price spikes and spikes just keep on happening. Listen to this list. 2008, global financial crisis, $147 a barrel. 2011, Arab Spring, $127. 2014, Libyan civil war, $111. 2022, Russia invades Ukraine, $122.
$117 a barrel during this war, though it is at $95 today. So... Do we keep on muddling along, pushing businesses to breaking point, tempers to boiling point and passing the bill to the taxpayer? Or should we spend this morning's programme exploring ways to wean ourselves off a clearly silly way of doing business if there are alternatives? It is slurry spreading season.
Tractors running up and down fields for hours on end, sucking diesel from dawn till dusk. So I spent some time this week with a contractor who specialises in slurry spreading to see what impact Trump's war in Iran and the government's three quarters of a billion euro subvention was having on his ability to stay in business.
What's happening here then? So, we have our pump pumping out our slurry. Eamon is in the tractor. He has his flow meter. He knows exactly what he's sending up to Coddy in the field.
Eamon sits in a tractor on top of a pit in a Wexford farmyard. It's pumping slurry into an umbilical pipe and pushing it under pressure one and a half kilometres away to the field that it's going to be spread in. The tractor engine is running at a constant 1,000 rpm, 35 litres of diesel an hour.
At the other end of the umbilical pipe, Pawdy is driving another tractor back and forth using a low-emission spreader. His tractor is running just under 1,000 rpm, depending on the terrain, and averaging about 25 litres of diesel an hour.
So, 10,000 litres multiplied by 0.83 equals... So that did cost me 8,400.
In his little office perched above his machinery shed, contractor Irvin Rothwell is running his calculator at about 2,000 RPM. The increase in fuel costs over this week last year is about ā¬75 a tractor a day. With eight tractors on the go right now, nine hours a day, fuel is costing him ā¬4,200 more a week than last spring.
We're still going to be 17 grand out of pocket, if you know what I mean, all right? And that's Mr. Trump. So this is your diesel tank.
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Chapter 2: How is the government's relief package affecting contractors?
It's going to help bridge the gap. I'll take it. I'll be happy with it. I'll take it. We spent our first expensive diesel on the 12th of March and that's only been in voice now in April. So it's early days. It's early days yet like.
And the people that you're out there talking to, the clients that you're meeting day to day, what's the mood like?
They're going to have to adjust. Now, I don't know as to how, but there is positive people out there. The world is full of positive people, apart from negative people.
Problems rarely come in ones, and this fuel crisis lands on top of an income crisis. Tillage farmers walking away, dairy farmers milking for less than the milk costs. One dairyman told me this week his farm loses ā¬200 every time he sets foot inside the parlour, which is twice a day. That makes it very difficult for contractors like Irvine to add to those farmers' woes.
They're a price taker. There's nothing they can do about it. But everybody else is sort of coming knocking on the door looking for their usual fee. It's going to be awkward, eh?
Given that you know that your clients are price takers, they don't have control, they can't ask for more money. How do you feel about having to impose or ask them for the President Trump surcharge?
Most of our customers are with us so long now and I don't feel it's right to put the full amount onto the customer. Why should they take the full amount? So they'll understand and I'll understand and we'll have to try to share it. For the moment, we can only share it for so long. Hopefully, hopefully, I'm an optimist, this will turn around quickly.
Maybe we're just lucky that we'd be able to work it out between us, but you can't, it just seems a bit unfair to me as a person just to pass everything straight on to the next person. Why should they take the whole heap, if you know what I mean? Hopefully, it'll come to a quicker end than we think. How many horsepower is that? It's 180 horsepower. Is that all? Yeah, that's all.
That's a big behemoth of a machine. Oh, look, sorry, 7,180 on the side of it. I should have read it, shouldn't I?
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