The Milk Producer - November 2009 - (Page 36)

RUMINATIONS By Tom Wright Decision-making tool Solid information comparing your farm with operations like it can put you on the road to greater profitability uying a used car can be tough. There are lots and they come in all shapes and sizes. However, you can find plenty of information to help you make a good decision on which one to buy. Price, the manufacturer’s reputation, the vehicle’s age, independent model reviews and maintenance history can come into play. Evaluating your final decision after you purchase the car is straightforward too—you soon find out whether you got a good deal or bought a lemon. Making production and economic decisions for your farm is even more challenging. Having solid information can help you determine a decision you need to make. After you’ve implemented a change, you can usually determine whether it was a good one—much like finding out whether you bought a good car. Among the information you can use in making these decisions is benchmarking. This term describes the collection, analysis and compari- Benchmarking documents your current situation and pinpoints the areas where you can make it better. son of production and economic information among comparable farms. Benchmarking in its simplest form looks to evaluate efficiencies—a given level of output based on a given level of input. Milk production per cow is a good example. At more detailed levels, you can use benchmarking to evaluate a broad range of inputs, such as labour, land or capital, and determine a variety of efficiency comparisons. Benchmarking lets you document your current situation. It’s also a good way to figure out how to improve it. benchmarking as a practical tool. The Penn State researchers used data from the Pennsylvania Farm Bureau tax records from 2001 for their study. After controlling for reported factors such as breed, milking system and milking barn setup, they had 34 similar sets of farm data available for the study. These 34 datasets were Holstein herds using stanchion barns and a milking pipeline. Average milk production was 8,260 kilogram per cow. Six of the 34 farms were identified as being on the frontier of efficiency. They used available inputs most efficiently to produce their products— milk and butterfat. Inefficient farms, by comparison, had much higher input levels. Benchmarking pinpointed deficiencies for the least efficient farms, Ruminations is prepared by Ontario Ministry of Agriculture, Food and Rural Affairs livestock technology specialists to provide information you can use on your farm. Practical tool A benchmarking analysis study done on Pennsylvania dairy farms recently provided insight into the use of 36 | November 2009 | MilkPRODUCER

Table of Contents for the Digital Edition of The Milk Producer - November 2009

The Milk Producer - November 2009
Contents
Editor's Notes
DFO Chair's Message
Dairy Update
National Policy
Farm Finance
DFC Promotion
CQM On Its Way
Research
Applied Science
Ruminations
Markets
New 'N' Noted
Back Forty

The Milk Producer - November 2009