Introduction
Benchmarking it is a process that has been called
inherently useful and useless. Many have argued that the best
measure of success in pig production is that farm's historic productivity
and other farms' productivity is not a fair measure for comparison.
There has been a great deal of frustration with benchmarks as
they have often been used by outside agencies such as banks to
measure the success of farms. These benchmarks have been used
with little regard for their accuracy, comparability and utility.
Problems have ranged from comparing outside farrowing operations
to expensive facilities or using the same expected liquidity ratios
for farrow to wean and farrow to finish operations.
Thus the National Pork Producers' Council has created
an initiative to provide a framework for benchmarking. The Production
and Financial Standards Task Force has been working on this
challenge with the following emphases:
That committee has been working hard to start to
realize some of these aims. Last March the National Hog Farmer
issued a silver edition of the proposed methods of calculating
a wide variety of production and financial parameters. From that
point on these were discussed with accountants, lenders and software
developers to provide the opportunity for this mind industry to
use these indices easily. As well, the definitions were refined
so that a new gold edition of the National Hog Farmer will
be issued this spring with the final definitions. Software systems
are now coming out with standardized NPPC reports that automatically
calculate productivity according to these new definitions. Similar
financial reports will be coming soon.
The next step is to create the central database to
collect this standardized information to allow benchmarking.
This is a relatively simple step compared to the creation of definitions
and methods to use these definitions. Initial steps are being
taken to create such a central clearinghouse of information through
the NPPC.
So what will it mean to you as the producer? I think
that it will be a system that provides a better benchmark for
comparison between producers. This in turn should allow for a
better understanding of the relative performance of farms. It
may not improve the performance that you report but it may decrease
the standards to which you are compared.
Such a method will probably also increase the requirements
for reporting information. To be comparable to other farms data
may have to be split and reported more often. For instance, pigs
born per sow per year is very sensitive to the denominator, namely
that number of sows reported to be in the herd.
But what is the definition of a sow? It could be
simply the number of the females in the sow herd B this would
give the lowest number. It could be the number of females that
have been bred B this gives a higher number. It could also be
the number of the females that have farrowed at least one time
B this is actually cheating most record-keeping systems by only
recording gilts once they have farrowed. I have even seen record-keeping
systems where not in pig sows are recorded as having left the
herd when they have been weaned.
The definition of sow was so problematic that it
has actually been left out of the definitions. Instead of a
sow the terms used are breeding female and mated breeding female.
The latter only includes gilts once they have been bred. An
additional term has also been suggested, that of breeding female
unavailable for mating. This is useful for herds with prolonged
isolation and acclimation periods.
A large difficulty is still in aligning production
records with financial records. One of the large concerns that
financial records have is that production records are not closed
out. This means that reports based on production records and
financial records may change as the data in the production database
is changed. For instance, feed deliveries are not recorded for
a certain farm. If the error is discovered after a financial
report is made, there should be methods to revise both. At this
point this is not forced. There is much more work needed to provide
a system that outlines production and financial data.
Finally a centralized database should bring the discussion
of benchmarks back into the general industry. Such information
is valuable and should be available to a wider number of participants.
The combination of common definitions, an involved industry and
a central database should provide a potent source of comparison
for the lending industry.
Take-Home Message
Benchmarking has been relegated to the back burner
in this rapidly growing industry when times were good. The aim
is now to refine our recording systems to allow benchmarking to
begin. Participation in such systems should be rewarding and
may be required by lenders.
