Diesel has dropped from its peak of late last year when hay, silage and other contractors were facing fuel bills double that of the previous year.
They believe further increases are likely given international demand and conflicts.
Rural Contractors New Zealand president Helen Slattery said lower fuel prices had only provided some relief and contractors still feeling the pinch were expecting them to rise again.
"The fuel prices had come back in the last couple of months, but when our season in Waikato was at its peak so were the fuel prices. From what I’ve heard around-about, people are predicting fuel prices to go up. This is really, really difficult as we need to plan before the season."
Contractors were trying to be as nimble and efficient as possible to cope with diesel prices doubling between the 2022 and 2023 financial years and continuing to rise until about October.
She said rural contracting such as maize harvesting was fuel intensive.
"We need fuel for every machine we operate, including ones for taking food out to workers or picking them up if they need to get home. I think there has been higher fuel prices in the past, but only for a short spike ... I’ve heard of rural contractors across the country, north and south, who’ve said their fuel bills have doubled, but the consumption is the same or lower. That makes it very hard to plan and run a business."
On top of rising wages, higher interest rates, insurance and other costs had to be absorbed.
"It gets to a stage where you cannot soak them up and you need to be able to pass them on to customers.
"People in the industry really need to know their numbers and be able to react quickly."
Operators would be planning work travel more carefully to try to keep fuel bills down, but weather changes made this difficult, she said.
A South Island small transport operator, who did not want to be named, was running his truck and fertiliser spreader business on a fuel bill of $260,000, excluding GST, several years ago.
In the year to last September, this had risen to $450,000 and his bill for October was $58,000, including GST.
He said vehicle registrations had gone up about $65 per vehicle and GPS units, mechanic fees, parts, road user charges, wages, certificate of fitness paperwork, oil and tyres had all increased since 2020. Insurance had doubled.
"All businesses are doing it tough, we get that, but for the ones in vehicle-bearing industries, it’s constantly tough with the fluctuations month on month."
Cost increases had to be passed on to farmers and other customers.
He said operator incomes were down because of the hikes and farmers opting to do the work themselves or choosing bigger companies with the ability to reduce charges.
Mrs Slattery said new lower-emitting machinery was lauded as more fuel efficient, but machinery prices were up.
Imported goods prices had risen and operators were completely dependent on what was being shipped in.
"With the cost-of-living crisis, people need to be paid more to be able to afford to live and that’s really affecting people in our industry. ...
"The price of food and basics — not even extravagant food but basic food — fuel, interest rates and everything has gone up for our employees.
"This affects what they need to live on. Life gets more expensive."
In rural contractors’s favour is a generally better season than last year. More hay is being cut as a result of more sunshine and good growth from rain.
