Farm Credit East, the largest lender to Northeast agriculture, released a briefing report indicating the importance of benchmarking for farm businesses. Operating a farm business can be challenging, but benchmarking can be a beneficial tool to improve profitability.
“Northeast farmers leave tens of millions of dollars in profit on the table each year,” said James Putnam, executive vice president for marketing and planning at Farm Credit East. “Through financial benchmarking, business owners are able to make continual profitability improvements year over year by comparing their business to a standard and using that standard to compete to be the very best.”
The first critical step to improving a business’s profitability is accurate, current financial information and analysis of that information to pinpoint action steps to improve a business’ bottom line. With this information in place, benchmarking can compare a business to its industry peers, including identifying the business’s strengths, where it exceeds standards and areas where it might be falling behind. A plan for the business can then be created accordingly.
This report from Farm Credit East explains some of the key measures that are looked at when comparing a farm to benchmark data. The report also looks at some benchmark data from sample industries, such as greenhouse, nursery, cash field, vegetables, fruit and dairy.
To view the full Farm Credit East Knowledge Exchange Report, Farm Credit East Benchmark Solutions Can Show the Way to Higher Profits, visit FarmCreditEast.com. Farmers who would like to obtain additional information on Farm Credit East’s benchmarking programs can email Chris.Laughton@FarmCreditEast.com or contact their local branch office.