The Two Page Comparison Report has been received favorably by cooperators as a means to enhance the business’ capacity to perform farm business analysis through benchmarking. Cooperators utilize the analysis provided by the report in a variety of ways. The report serves as a management tool for management team meetings; cooperators share the report with consultants, advisers, and others; and, or cooperators use the report for internal problem solving efforts. Cooperators’ use of the comparison report results in enhanced capacity to achieve desired levels of profitability. Researchers conclude that “… farms conducting benchmarking analyses tended to have a greater rate of return on all assets, (a measure of profitability), than farms that did not use this analysis technique.” (Gloy, and others. 2002. Financial Management Practices of New York Dairy Farms. Department of Applied Economics and Management, Cornell University: Ithaca, NY).
impact statement issue
Cornell University Cooperative Extension’s Dairy Farm Business Summary (DFBS) Program enables producers to: analyze their financial situation; set future goals; and make sound financial decisions. The 18-page DFBS report received by cooperators summarizes the financial condition and performance of the business via financial statements and relevant ratios, and summarizes key dairy and crop performance measures for the business. Benchmarking, the practice of comparing a business’ measures to averages for a peer group or to industry averages for the purpose of identifying strengths and weaknesses, is a type of farm business analysis. Individuals working with cooperators historically strive to provide business analysis via benchmarking. For example, once sufficient data were available, extension staff would list selected averages for a comparison group on the cooperator’s DFBS report. Efforts were somewhat limited by timeliness with regards to the availability of group average data. Recently, dairy farm business owners have sought enhanced capacities to conduct farm business analysis (NYFVI, Barriers to the Dairy Industry; DFBS Board of Directors).
impact statement response
Cornell University Cooperative Extension led by faculty and staff in the Department of Applied Economics and Management developed the Two Page Comparison Report that cooperators or those working with them generate online. Page 1 of the report lists measures for the cooperating farm, averages for the comparison group, percent differences and statistical measures of deviation given variability in the comparison group for selected factors. Factors compared include profitability, income generation, cost control, size of business, and production among others. Page 2 of the report lists accrual receipts and expenses per cow and per hundredweight for the cooperating farm and the comparison group along with percent differences and statistical deviations. The user describes the comparison group via a query on a set of factors. Factors include the number of cows, profitability measures, and production factors among others. Extension staff generate meaningful comparisons for cooperators, for example, comparison to a group of top performers based upon profitability for a comparable herd size. Staff highlight strengths and weaknesses and summarize key differences. Each of the approximately 30 cooperators from the NWNY region for the 2007 DFBS year received analysis via a mailing. In addition, opportunities were available to review the analysis via a farm meeting, via small group meeting, or with extension staff as part of the business’ annual management team meeting.
impact statement summary
Recently, dairy farm business owners have sought enhanced capacities to conduct farm business analysis (NYFVI, Barriers to the Dairy Industry; DFBS Board of Directors). Cornell University Cooperative Extension led by faculty and staff in the Department of Applied Economics and Management developed the Two Page Comparison Report that cooperators or those working with them generate online. Page 1 of the report lists measures for the cooperating farm, averages for the comparison group, percent differences and statistical measures of deviation given variability in the comparison group for selected factors. Factors compared include profitability, income generation, cost control, size of business, and production among others. Page 2 of the report lists accrual receipts and expenses per cow and per hundredweight for the cooperating farm and the comparison group along with percent differences and statistical deviations. The Two Page Comparison Report has been received favorably by cooperators as a means to enhance the business' capacity to perform farm business analysis through benchmarking.
