Issue 32
November/
December 2000

Prairie Grains is the official publication of the Minnesota Association of Wheat Growers, North Dakota Grain Growers Association, South Dakota Wheat, Inc. and the Minnesota Barley Growers Assocation.

Copyright Prairie
Grains Magazine
 November/
December 2000

Are your yields keeping up with the Jones'?

Benchmarking helps compare

By Dr. Jochum Wiersma, U of M Small Grains Specialist
email: Jochum.J.Wiersma-1@tc.umn.edu

No growing season is ever the same, just as no field or farm is the same. Yet, we all make comparisons between them. During and after harvest in an informal setting (like the local coffee shop) we all talk about the crop and listen to the stories about the Jones' harvesting 70 bushel of wheat.  Quickly you wonder how to keep up with the Jones', and how come you harvested "only" 45 bushels. 

Making comparisons is actually a very good tool to improve your yields.  Only if you compare them against others do you have a yardstick to analyze and change your practices so that you may actually attain yields that match (or even exceed?) the Jones's.

In business management, this process is called 'benchmarking.' A good definition of a benchmark is a reference or measurement standard for comparison.  The American Productivity of Quality Center (www.apqc.org) defines benchmarking as "the process of identifying, learning, and adapting outstanding practices and processes of any organization, anywhere in the world, to help an organization improve its performance."

Benchmarking is discovering the specific practices responsible for high performance, understanding how these practices work, and adapting and applying them to your organization.  As a crop producer, you can benefit from benchmarking because it prevents you from reinventing the wheel, saving you both time and money.  It accelerates change and restructuring, and allows for "outside-the-box" ideas, especially if you look outside your own industry.

Below are a number suggestions that may help you along.  Performance records of the Farm Business Management Program (www.mgt.org) in this state are a good starting point. They publish some really good summary data for different crops and enterprises.  Based on 'Return on Overhead' it breaks out data in an average, a top 20% and a bottom 20% bracket for a specific crop. These numbers are a starting point for a competitive analysis.  Using that data you can analyze your cost of production and evaluate whether any categories are out of line.  This initial comparison may tell you a number of things about your operation.

The next phase, however, is a critical point in benchmarking.  It is to understand why there are differences between your numbers and the numbers of the operators in the top 20%. At this point, it is really easy for the "nay sayers" to come up with 1001 reasons (excuses?) why you can't compare their field and yield numbers with anybody else's numbers. This is very counter-productive and will assure that you indeed will never keep up with the Jones'.

To find the underlying reasons for the observed differences between your enterprise and the top performers requires you to study them and learn more about their operations. A good way to do this is to simply get together with a number of your neighbors and compare practices and results. Marketing groups are a good example of discussion and analysis amongst products for the purpose of improvement. Perhaps you could join a FBM program in your area, initiate an informal production group, or if you are already a member of a marketing group, suggest that production analysis become a part of your marketing group's discussion.

In another setting, the University of Minnesota Extension Service's 'Crop Diagnostics' program is another attempt to learn your operation and improve it. In the program, a panel of professionals covering the gamut of crop production, from lender to agronomist, review your operation and suggest areas for improvement. You can learn more about this program by contacting Hans Kandel (ph:218-253-2895, email:  hkandel@ extension.umn.edu) or Zach Fore (ph. 218-253-4401), email: zfore@gvtel.com) U of M Extension Service.

I understand that in New Zealand, there is a program similar to the U of M's Crop Diagnostics team, only it's all farmers who do the performance review. That brings us to another facet to consider in benchmarking. Benchmarking your operation to a colleague in Australia, Canada, or Europe may reveal some interesting practices and differences from which you can learn and benefit. It would be easy to find contacts for doing this over the Internet.

Even farther would be to study a completely different industry. Looking outside your industry may allow us to break out of set ways we do things in farming.

Now is the time to closely look at your operations and evaluate whether changes in practices are needed or desired. You might be saying to yourself, "whoa, this benchmarking stuff is way too personal." You're right, it is. Benchmarking exposes areas of your operation where improvement may be needed, and opening yourself up to such critical assessment may be a hard swallow for many independent-minded producers. The underlying decision on whether to pursue benchmarking comes down to pride versus profit. I'll let you decide which is better for sustaining your farming operation.