Business & Policy
New financial benchmarking report allows farmers to gauge their performance
June 19, 2019 By Top Crop Manager
A new report will allow farmers to compare themselves against other profitable farmers in their industry for a better sense of their own operation’s performance.
Agri-Food Management Excellence (AME) and BDO Canada developed the Standardized Farm Financial Statements and Benchmarks for Better Management Decisions report as a resource for farmers to navigate and improve profitability. The report includes financial data from over 1,400 farms across Canada, including grain, oilseed and dairy farms.
AME and BDO used the data to produce financial benchmarks that allow farmers to compare themselves against profitable farmers in their industry. Using the benchmarks provides a better understanding of a farm’s performance, and help farmers set targets, just like they do in the field or barn, to increase operational efficiencies and, ultimately, increase profits.
“Through my conversations with farmers, I regularly hear that they struggle to understand their performance from tax oriented financial statements. Also there’s no consistency in statements from accountant to accountant, making them impossible to compare,” said Larry Martin, the report’s senior author and a principal of AME, in a released statement. “In today’s tough economic times, it’s even more important for farmers to understand what their financial statements tell them.”
“By standardizing the income statement, every farmer’s statement is comparable, so they are much clearer about the management information it contains. The standardization plus the benchmarks help farmers know where they are and help them identify where they have room to grow.”
Understanding financial performance and benchmarking is not new for AME. Larry and AME have been teaching these principles in their CTEAM course, a two-year program that gives participants the opportunity to develop their farm’s own strategy and operational plan through classes and one-on-one coaching, for over 20 years.
“The most successful farmers look beyond their own farms—they look for new opportunities, new research and new ways to do business, with the end-goal of capturing more margin. This report gives farmers information to help them improve their farms and achieve their financial goals,” Larry added.
The Standardized Farm Financial Statements and Benchmarks for Better Management Decisions is available for free download on the AME website.