“So, how can farm benchmarking help my farm?” You may ask. Well, it can have great benefits in helping to make your farm business more profitable, resilient, and reach your long-term goals. It offers farms the chance to analyse and compare their performance with either themselves annually, or other farms of a similar size and enterprise mix. With the industries future uncertain and markets volatile thanks to a combination of Brexit and climate change amongst several other factors, benchmarking can help ensure the business is operating as efficiently as possible.
A majority of farms benchmark already in an informal manner i.e. comparing previous year’s production and profits or talking about yields with fellow farmers. Whilst this can be useful for providing a basic evaluation, comparing full farm data and costings offers a more in-depth picture. Utilising benchmarking to this level can help to identify individual enterprise strengths and weaknesses, along with wider business opportunities and threats.
There are several industry tools available for benchmarking, all anonymous. Farm Business Survey is one of the largest, consisting of 2,300 across England and Wales whose data is captured annually. Similarly, AHDB offer Farmbench offers a system for farms to choose whether to input whole farm or enterprise specific data for comparison, in a bid to assist in the fine-tuning of business decisions. Farmbench has replaced the AHDB Dairy Milkbench+ system that ceased in March 2017, with its dairy specific section launching later in 2018.
Here at Wynnstay we offer a costings service, where you can input your monthly costings sheets in return for a report and annual summary report. The monthly reports offer a way to track farm progress and trends throughout the year. Whilst the annual summaries can be used to either compare the farms performance year on year, or against other industry members when added into benchmarking software.
For those on contracts with environmental requirements or with an invested interest in sustainability, the Sustainable Intensification Research Platform (SIP) has created a sister tool to FBS named the “Sustainable Intensification Benchmarking Tool”. The tool allows for the comparison of four main sustainable metrics: Greenhouse Gas (GHG) emissions, nutrient balances, land use diversity and social indicators. It provides instant results upon data input and allows for farm sustainable performance across the environmental indicators listed, as well as economic performance. You can also use the FCCT carbon calculator!
Clearly, there are several benchmarking systems available to those in the dairy industry, whether for a purely economic or an environmental overview. Remember, some costings services do not benchmark all the costs on farm and it’s important to use the most suitable metrics for your business. With a variety of systems available, there’s something to suit all farms, leaving no excuses not to utilise some form of benchmarking. For dairy farmers, where milk prices are out of their control, it can only make sense to keep on top of those that are. Keeping track of the farm accounts can allow you to pre-empt when you may need to tighten your belt or change your practices, before it becomes an issue.