NPR - BENCHMARKING FINANCIAL AND MANAGERIAL PERFORMANCE
Top producers use benchmarking to compare the performance of their farm operation against that of their peers. Benchmarking assists them to identify strengths and weaknesses of their operation as well as areas in need of improvement. Historically benchmarking has been used to compare yields, e.g. piglets/sow, return per bird, production per cow, etc. Today’s top farmers are taking benchmarking to a much more sophisticated level. Some are comparing to global performance and most are eager to compare to industry benchmarks — both from a managerial and a financial comparison perspective. Leading farmers are finding that benchmarking makes the business of farming more rewarding. The farm operation is looked at as not being just a profit centre or a lifestyle but as an innovative and dynamic entity where they can compete against themselves, their past performance and where they also compare and compete with others locally, nationally and internationally.
Farmers are interested in the correlations between management and financial performance to better understand which best practices are used in what ways in order to replicate similar achievement. In other words, to determine what leading farmers actually do to consistently achieve superior financial performance.
Keywords: benchmarking, financial management, farm management, ratios