RCNZ profile: Bluegrass Contracting

Brook Nettleton is a battler who knows the value of hard work and what things should cost. Farm Trader takes a closer look at his contracting business.

Now running BlueGrass Contracting Ltd, one of the Waikato’s biggest rural contracting companies that he started with his parents, he wants to see a new standard contract that fairly reflects contracting costs. He says fuel and wage costs alone have trebled in recent years.

Brook grew up on his parent’s Black Stump apple orchard near Te Puke, picking and spraying apples as an eight-year-old. The 1987 sharemarket crash saw John and Sally Nettleton lose the orchard but Brook regards it as one of life’s lessons.

“Things don’t always fall on a plate in front of you.”

John, Sally, and Brook started their rural contracting business in the late 1990s. Now Brook and his wife Kerry-Ann run the Matamata-based operation with 22 trucks, 12 tractors, three JCBs, three harvesters, two fertiliser spreaders, and a fleet of other equipment. BlueGrass Contracting harvests a lot of grass including a lot out of Fonterra feed blocks.

Some 22 or more full-time staff are employed, usually supplemented by 15 skilled machinery operators from overseas. COVID-19 reduced that to a couple for the last two seasons.

Earlier this year, Brook joined the new RCNZ National Training Council established by RCNZ CEO Andrew Olsen.

“Andrew rang me about it. I was more than happy to give something back to the industry.”

He wants to see a full picture emerge of what training is required for a competent rural contactor.

“They are not just driving a tractor. Plenty of the crops they work on cost $5000 a hectare. It’s a professional role. Everyone’s relying on what they’re doing to make it work.”

Brook reckons it takes a couple of years for someone to really develop their full set of skills. He says expecting someone to learn to drive a piece of equipment costing three-quarters of a million dollars in a short time is folly – be it a truck or complex farm machinery.

He says the high cost of equipment is one reason why rural contracting costs need to rise, remembering an old saying that hourly charges should be about 1/1000th of the cost of a machine.

“You’ve got $600,000–700,000 worth of kit and currently that might only be earning $300 an hour.”

One thing that has helped hold price increases back has been competition.

“There’s so much competition out there; people don’t want to put their prices up.”

Brook says two costs are now forcing this approach to be abandoned.

He says 10 years ago, fuel and labour costs used to account for about 10% each of a contractor’s costs; now they each probably make up 20%.

“We got away with it until inflation hit.”

Earlier this year, Brook started attending meetings with Federated Farmers and other rural contractors. He says farm consultants were still trying to tell farmers what they should be paying and to keep shopping around till they got a low price.

He says to their credit, Federated Farmers is acknowledging there needs to be a complete revision of their standard contracting contract, which is at least 10 years old.

His plea is for it to be kept relatively simple and realistic enough to capture the inflationary cycle being experienced. “We can’t be going back to the farmer every month with another two percent increase.”

He says to stay in business contractors needed to have started putting up prices early in the 2021–22 season to meet the 20–30% cost rises they have faced.

“But if fuel and machinery and labour costs keep going, this could be as high as 40%. Contractors need to know their costs and farmers need to know things are not being over-inflated because the pay-out is high.”

On the labour front, his full-time staff now include several overseas workers who’ve now settled here with most going for permanent residents.

“That actually has become quite easy to get.”

He acknowledges that the shortage of labour has seen him work harder at getting more New Zealanders who come without the immigration and accommodation challenges of overseas staff.

“I’ve ended up with a lot of very good Kiwis.”

He makes the point that taking on new trainees has to be done slowly as they need a lot of mentoring to develop their skills.

“We can actually only have one to two trainees in a year in our business because you’ve got to supervise them closely.”

Brook says if every rural contractor took on one trainee a year, the industry would be getting 100–150 entrants a year.

In 10 years’ time, that might include son Beau, who at nearly 10, loves helping his dad. Seems like it might be in the genes.      

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