Financial and performance benchmarks for the heifer operation
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Financial and Performance Benchmarks for the Heifer Operation. Normand St-Pierre, Ph.D. Department of Animal Sciences The Ohio State University (614) 292-6507 [email protected] Benchmarks: a PARADOX. Very useful for comparing yourself to your peers.

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Financial and performance benchmarks for the heifer operation l.jpg

Financial and Performance Benchmarks for the Heifer Operation

Normand St-Pierre, Ph.D.

Department of Animal Sciences

The Ohio State University

(614) 292-6507

[email protected]


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Benchmarks: a PARADOX Operation

  • Very useful for comparing yourself to your peers.

  • But can just as easily lead you in the wrong direction.


Benchmarks l.jpg
Benchmarks Operation

  • Empirical

    • Survey of producers

      • Who – Representative sample

      • Data Validation

      • Definitions


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The Chicken and the Egg Operation

  • Are the benchmarks driving the producers? or Are the producers driving the benchmarks?


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Benchmarks Operation

  • Empirical

  • Expert-based

    • Assumptions

    • Says who?

    • The chicken and the egg





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Questions Operation

  • What if you feed more corn silage or haylage as opposed to hay?


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Questions Operation

  • Where are the dead heifers?


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Questions Operation

  • What year?


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Financial Benchmarks: OperationThe Sweet 16

  • 16 measures of profitability, solvency, liquidity, repayment capacity and financial efficiency

  • 3 Solvency ratios:

    • Debt to Asset ratio

    • Debt to Equity ratio

    • Equity to Asset ratio


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The Sweet 16 Operation

  • 3 Solvency ratios:

    • Debt to Asset ratio (D/A)

    • Debt to Equity ratio (D/E)

    • Equity to Asset ratio (E/A)

  • However, Asset = Debt + Equity

  • If D/A = 0.40 then

    • E/A = 0.60 and

    • D/E = 0.66

  • So why use three ratios when one captures 100% of the available information?



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Cost of Raising Replacements Operation

110% annual discount rate


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Land Operation





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Benchmarking Nutrient Costs Operation(ADG = 0.8 kg/d 1.75 lb/d)


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Benchmarking Nutrient Costs Operation

ME = $0.052/Mcal; RDP = $-0.031/kg; RUP = $0.303/kg



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Benchmarking Nutrient Costs Operation400 kg, 880 lbs

ME = $0.052/Mcal; RDP = $-0.031/kg; RUP = $0.303/kg


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Question the Authority Operation

  • Who pays for the dead animals?

  • What is the value of time?

  • What is the relationship between the different elements of the benchmarks?

  • Is there a free lunch?


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The End Operation


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