5 Rules for Effective Farm Benchmarking
“When I told him he could save 40% on some lines of chemicals, he refused to believe me – he’d been buying from David for 25 years.”
This simple yet real example is all too familiar in UK farming, where market data is so hard to find. Only 21% of UK farms engage in any form of benchmarking – and even this is rarely at a sufficient level of detail to drive real improvement.
At Yagro we see benchmarking as one of the defining processes of any successful business, and see first-hand the power it gives to farmers. Here’s our quick primer to benchmarking in agriculture:
What is benchmarking?
The process of comparing any farm data to others so you know how you compare.
This can take many forms: the informal pub chat; the groups comparing many facets of their businesses; or anonymous sharing of information through a third party such as software or business consultant.
And it can cover a wide range of data: yield, costs, debt ratios, spray rates, CapEx investment, etc – if you can measure it, it can be compared!
Let’s set the right expectations: benchmarking alone will not help your business. Rather, it is the first step to understanding the opportunities in front of you.
At its best, effective benchmarking allows you to ask the right questions, and make changes to improve your performance.
“Why are my fuel costs per hectare so much higher than average?”
“How have I achieved such good labour rates, and how can I take this advantage further?”
“Is the extra expense of serviced agronomy chemical a fair reflection of its value?”
With a bit of digging, the answers to such questions will directly help you identify opportunities to improve your performance and profitability.
Yagro’s Five Rules For Effective Benchmarking
When considering benchmarking options, make sure your chosen approach meets the following:
1. The information is verified
There can be a lot of hearsay in this market – when sharing your data, make sure what you get back is just as genuine.
2. It is independent
Impartiality is key – make sure the information provider has no ulterior motive in what information is passed back to you.
3. It is recent
Lots of things change with time – make sure the information is recent enough to be meaningful.
4. It is at the right level of detail
Don’t settle for yield numbers – make sure you know upfront how you will use the information to make tangible changes.
5. Keep it going!
It can’t be a one-off exercise, make sure the process is quick and efficient so you an embed it as business-as-usual for your farm.
Finally, a watch-out: make sure you know what’s happening to the information you are sharing, particularly if through a third party. It’s your data, so don’t let others profit from it without your consent!
More on this in our next blog post on Yagro’s Data Policy.