Farm Credit Canada

Farm Credit Canada

September 06, 2011 08:31 ET

Benchmarking is a growing trend, says FCC survey

REGINA, SASKATCHEWAN--(Marketwire - Sept. 6, 2011) - A national Farm Credit Canada (FCC) poll of 1,450 FCC Management Software customers reveals that 28% do not benchmark their operations against others, but say they're likely to begin within the next two years. Thirty-five per cent of those surveyed do compare their operations against others.

"Benchmarking makes a business sharpen its game, and farms are no different," says FCC Senior Agriculture Economist Jean-Philippe Gervais. "It's very useful to compare production and costs with other producers, such as crop performance by variety, debt-to-equity ratio, expenses versus sales or average selling prices. Once you identify an area where you can improve performance, you can work towards implementing new processes that will allow you to reach or exceed benchmarking results."

Survey highlights:

  • The most common reason for not benchmarking is that respondents prefer to make decisions based on their own personal situation and not that of others (56%), while 43% report that they are not aware of a benchmarking source.
  • Poultry (69%) and hog (60%) respondents are the most likely sectors to benchmark.
  • Respondents from Ontario (48%) are more likely to benchmark than those from Manitoba (29%), Saskatchewan (33%) and Alberta (36%).

"The agriculture and agri-food industry is complex and dynamic, and benchmarking gives you a great picture of your enterprise today. Benchmarking enables you to build these learnings into new business goals, which helps improve your bottom line," says FCC Chief Operating Officer Rémi Lemoine. "You end up following industry standards and the industry's best performers. FCC is committed to advancing the business of agriculture – and benchmarking is one of the ways that producers, agribusiness operators and food processors can advance their own business success."

Two main challenges with benchmarking are finding the best tool to do it effectively and using fresh data, since there is no specialized benchmarking software for agriculture in the market. Whoever does the books for the operation can help by scanning financial and operational results into a basic spreadsheet. That's what some agriculture associations use to guide their customers and build a database. Financial statements are one of the farm's strongest performance indicators, but often sit idle in a computer file or folder.

Simply put, benchmarking helps explain the "why" behind excellent performance and serves as a model for others who seek to improve their business success. For now, industry associations, accountants and various agriculture advisor groups are the best resources for producers who wish to start a benchmarking process for their operations.

The margin of error for this survey is +/-2.3%, 19 times out of 20 on a sample of this size. Demographic subgroups will have a higher margin of error. The survey was conducted in December 2010.

As Canada's leading agriculture lender, FCC is advancing the business of agriculture. With a healthy portfolio of more than $21 billion and 18 consecutive years of portfolio growth, FCC is strong and stable – committed to serving the industry through all cycles. FCC provides financing, insurance, software, learning programs and other business services to producers, agribusinesses and agri-food operations. FCC employees are passionate about agriculture and committed to the success of customers and the industry. For more information, visit

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