Farm contracting costs rise as fuel and labour pressures bite

Farm contracting costs are rising across the UK as operators face mounting pressure from inflation, labour and volatile fuel prices, new figures show.

The National Association of Agricultural Contractors (NAAC) said its 2026 price survey points to an average increase of 4.84%, with rates generally a few per cent higher than last year.

Fuel remains a key concern, with prices in the survey based on red diesel at 70p per litre. The NAAC warned that instability in the Middle East is driving rapid fluctuations, advising contractors to apply surcharges where costs exceed that level.

The increases are likely to feed through to farm businesses, with more than 90% of farmers relying on contractors for key operations.

Despite the overall rise, the survey highlights wide variation across the sector, with some contractors planning no increase and others forecasting rises of up to 15%.

The figures are based on responses from across the UK, meaning published rates are averages rather than fixed charges, and can vary significantly depending on region, soil type, distance travelled and equipment used.

Contractors are being urged to calculate their own costs carefully to ensure they are covering overheads, particularly as conditions remain uncertain.

NAAC chief executive Jill Hewitt said the increases reflect the reality of running a professional service in the current climate.

“This year we asked members whether they plan to put up their prices to reflect increasing costs. The average increase is 4.84%, although there was a wide variation of predicted rises from 0–15%,” she said.

She added that maintaining standards remains critical, noting “the professional service provided by a contractor remains a high priority”, ensuring farmers can be confident their crops, livestock, soil and environment are protected.

Ms Hewitt said 2026 rates have risen to reflect inflation and employment costs, stressing the importance of clear pricing on both sides.

“Transparent, well-calculated costs on both sides will help maintain strong partnerships and ensure both parties benefit,” she said.

The NAAC said the survey should be used as a guide only, with actual charges varying widely depending on individual circumstances and agreements between contractors and farmers.

With costs continuing to shift, both farmers and contractors face growing pressure to balance affordability with long-term sustainability.