| ||In an effort to remain informed of the cost & returns associated with agricultural production in the province, Alberta Agriculture's Economics & Competitiveness Division works directly with numerous producers every year through the Business Analysis & Research program. The result ...a world-class database with enough information to generate key benchmarks for beef cow/calf (weaned - calf) operations by each major grass type of Alberta.
The primary value of these reports is to enable producers to gauge their productive, economic and financial performance relative to their peers locally and provincially. Benchmark analysis, comparing to one's own detailed business analysis, is the first critical step in identifying operational strengths and weaknesses in a cow/calf operation.
The benchmarking process has two key time perspectives. The first is an historical analysis, involving comparisons over time. The second is a within-year comparison, focusing on how your operation performed, responded to, or weathered the challenges faced by you and your local peers.
Historical benchmarking generally focuses on the relative movement of major cost totals, financial performance indicators, and key productivity measures over time. Important questions to be posed by producers in historical benchmarking include:
Historical benchmarking highlights the elements of growth and competitiveness over time.
- "are my efforts to improve my productivity visibly separating me from the benchmark?"
- "is the trend in my unit costing improving relative to comparables?" and
- "where am I leading and/or where am I lagging in financial performance compared to regional or management benchmarks?"
Cross-sectional, or within-year benchmarking is generally more detailed in its approach, letting producers focus on specific operational strengths and weaknesses. Comparisons are on an element-by-element basis, offering insights by each costing, production and financial criteria. Important questions to be posed by producers in within-year benchmarking include:
Cross-sectional benchmarking promotes identifying priority long and short term areas for change and gives incentive to individual producers to utilize their own costing, based on their own "on-farm facts", as a basis to budget, plan and monitor business changes and progress.
- "given the weather, market and production situation in the benchmark year, how did my unit costing compare to the benchmark?"
- "what is the effect of my 'production system' (ie. how I produce) on my unit production costs as compared to the benchmark?",
- "what can I do differently, from a production, operational, or infrastructure point of view, that will make me more cost effective?" and
- "from a financial point of view, am I better positioned than my peers to take advantage of production or business change opportunities?"
In past years, AgriProfit$ benchmarks focused primarily on within-year comparisons. As the research pool has grown, so to has the ability to present historical production, economic and financial benchmarks. AgriProfit$ Benchmarks for Alberta Cattlemen now include a six-year summary of key performance benchmarks at the provincial and regional levels.
Provincial benchmarks provide an indication of the "competitive environment" in which beef producers operate. They bridge a wide range of land resources and climate zones, plus a range of economic choices among competing enterprises. Comparisons to provincial averages, or "totals", are confined to higher level, economic and financial performance issues.
Regional benchmarks are more applicable to producers in investigating business strengths and weaknesses. Each regional benchmark report contains an array of tabular and graphical information regarding the economic performance of the cow/calf enterprise, farm level financial performance, and costing information for the main forage and grazing crops supporting the cow herd. As a point of reference, regional averages are contrasted with provincial and regional "top management" groups.
The confidentiality of producers' information is paramount in the AgriProfit$ program. Where regional sample size is too small to maintain the confidentiality of program participants, results are pooled up with then next logical regional grouping.
AgriProfit$ Benchmarks for Alberta Cow/Calf Producers
The cow/calf enterprise benchmark series has recently been updated and revamped. The following regional and provincial cow/calf benchmark reports are currently available. Over time these will be updated with current and earlier years.
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