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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 st-pierre.8@osu.edu. Benchmarks: a PARADOX. Very useful for comparing yourself to your peers.

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financial and performance benchmarks for the heifer operation

Financial and Performance Benchmarks for the Heifer Operation

Normand St-Pierre, Ph.D.

Department of Animal Sciences

The Ohio State University

(614) 292-6507

st-pierre.8@osu.edu

benchmarks a paradox
Benchmarks: a PARADOX
  • Very useful for comparing yourself to your peers.
  • But can just as easily lead you in the wrong direction.
benchmarks
Benchmarks
  • Empirical
    • Survey of producers
      • Who – Representative sample
      • Data Validation
      • Definitions
the chicken and the egg
The Chicken and the Egg
  • Are the benchmarks driving the producers? or Are the producers driving the benchmarks?
benchmarks5
Benchmarks
  • Empirical
  • Expert-based
    • Assumptions
    • Says who?
    • The chicken and the egg
questions
Questions
  • What if you feed more corn silage or haylage as opposed to hay?
questions10
Questions
  • Where are the dead heifers?
questions11
Questions
  • What year?
financial benchmarks the sweet 16
Financial Benchmarks:The 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
the sweet 16
The Sweet 16
  • 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?
cost of raising replacements15
Cost of Raising Replacements

110% annual discount rate

benchmarking nutrient costs21
Benchmarking Nutrient Costs

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

benchmarking nutrient costs 400 kg 880 lbs
Benchmarking Nutrient Costs400 kg, 880 lbs

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

question the authority
Question the Authority
  • 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?