The Benefits of Benchmarking

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Have you ever wondered how your cost of production stacks up to your neighbor’s cost of production?What about your income over feed costs? Well, maybe it’s time to talk to your nutritionist about benchmarking. Scott Waltner of Puget Sound Veterinary Group PC, a nutrition consultancy and veterinary practice in Washington, has been providing his clients benchmarking information since 1996. He says it’s critical for helping each farm meet their individual goals. 

“It gives you an objective number or focused set of goals to revisit whether that be monthly, weekly or some other period of time,” Waltner says. “So instead of having some subjective evaluation of what you’re looking at or a feeling you have, you have a number.”

While Waltner acknowledges some goals on the farm are difficult to put a number to, figuring it out inspires farms to push forward and reach higher. The most common data point Waltner tracks for his clients is income over feed cost (IOFC). 

“Each client gets a number. For example Meadow Park Dairy might be No. 23. And then if they want to compare their income over feed number with dairy farm No. 6, they can,” he explains. “I’m not going to go out and tell them ‘your neighbor’s got an income over feed cost of x’. But to me the value is the natural competitive spirit of figuring out how to be better.”

While IOFC isn’t the only metric Waltner tracks, he also benchmarks 21-day pregnancy rate and somatic cell count on a regular basis, it’s one that his clients say does a good job of quantifying on-farm variables. 

“Monthly monitoring of IOFC is a great metric to benchmark yourself against other producers,” says Washington dairy farmer Dwayne Faber, one of Waltner’s clients. “It distills some of the largest on-farm variables into one number. Having a number that reflects feed costs,milk price and milk production allows a producer to determine where they are on a monthly cash flow basis.”

Still, benchmarking is no good if action isn’t taken as a result of the data. 

“A benchmark number is no better than your doctor telling you to lose weight, because if you don’t have a mechanism to make that number better, or make it go up, or make it go down, whatever direction you want it to go, then it’s of no value to you,” he says.

“The benchmark is really an inspirational tool to search for and/or monitor the mechanism that makes it better.”The benchmarking is just the first step in the process, he adds. The next step is figuring out which feed ingredients have more value than the others. It’s not necessarily which are the cheapest, but which are adding the most value. 

The same is true for deciding on data points to benchmark. Waltner doesn’t think all farms need to track the same three points that his clients do, although he says it’s hard to get away from IOFC. 

“What is useful on the farm? What do we need to look at?” he questions, adding that the team approach is the most effective here. “What does the veterinarian think? What does the nutritionist think? What does the dairyman think? What does the dairy manager think? What do the feeders think?”

Identify some key goals both long term and short term and start tracking those. 

GETTING CONSULTANTS ON-BOARD

While many dairy consultants use benchmarking as a tool, some don’t. If your nutritionist doesn’t provide this kind of data, Waltner suggests outlining your farm’s goals and then asking for help. 

“I think if the farmer was with somebody that wasn’t routinely benchmarking, the farmer should just ask them to outline three specific goals of the farm and then say ‘This is what I would like to do, how can you help me get there,” he says.

 
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