Proceedings

PR – Dairy Farm Business Analysis; Current Approaches And A Way Forward

In 2003 a voluntary-based industry group, calling itself the KPI Working Group, formed to discuss and address the fragmented approach to measurement of business performance that existed in the dairy industry. The objective they set themselves was to develop a coordinated approach to provide sound, robust data and consistent benchmark calculations which would provide increased clarity of data for the dairy industry and benchmarks that could be relied upon. Group discussion related to the need to provide farmers and wider industry players with timely information on liquidity, profitability and wealth creation/loss as it occurs on farm from year to year. Critical areas that required consistency in how they were determined included the value of family labour and management, changes in feed inventory and the value of land and buildings. Indicators of success for both the property and the farming businesses was needed to ensure a holistic evaluation was made of overall investment strategy. The research provides a useful example of how inter-disciplinary groups can work towards a common goal and suggests a framework for farm analysis that could be used internationally.

Keywords: liquidity, profitability, wealth creation, dairy farm analysis.

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Author(s): Lines, I., Newman, M., Shadbolt, N.M.

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Organizations(s): Dexcel Ltd., 3- Agribusiness Ltd., IFNHH, College of Sciences, Massey University, Palmerston North