Is benchmarking just a once a year tool?

By Dan Gingue

Farm Business Advisor

Most farm businesses that take the effort to analyze their financial performance typically do it at the end of the calendar year.  In late fall, as the crop season winds down and the large bills associated with harvest fill the mailbox, farmers wonder if their best efforts have paid off. At the same time, the tax accountants start calling for tax planning numbers and the lenders want the ominous year-end balance sheet. With these tedious tasks looming, finding the time and energy to complete benchmarks is hard to muster.

Benchmarking shouldn't be burdensome and certainly doesn't need to pile on at year end. More importantly, how useful is benchmark information that comes to you 12 to 15 months old?  

The Dairy Dashboard's benchmarking is done on a 12 month rolling basis along with the farm's actual vs budgeted financial and production performance reports, making the benchmarking process less tedious and more timely.  Milk price and large variable expenses such as purchased grains are constantly changing. If we look at cost only by calendar year we lose the ability to understand performance today.

Is it easy to start benchmarking mid-year? Yes! Think about it. The previous year books are complete, the balance sheet is done, and thank goodness - tax season is over! Discover the power of monthly benchmarking and find areas of opportunity for improved management on your farm.