Ag News

We can be better than just benchmarking! by Nathan Scott

  • By: Nathan Scott
  • Jan 29, 2018

Is benchmarking leading to mediocrity in our livestock industry?  In my opinion, it is.  Firstly it is actually just comparative analysis, and doesn’t provide “benchmarks” to aim for, just indications of what others are achieving.  In my opinion, targets should be set based on what is possible, not what others are doing.

For those lovers of benchmarking amongst you, preparing to launch at me, let me qualify all of this first.  I quite like benchmarking for comparing gross margins, and particularly variable and fixed costs.  I quite like it for comparing enterprise types.

So given all of that, what do I have against them?  Well there are a few things.  Some basic, and some more philosophical –

Farm businesses (livestock businesses in particular) are so individual that it is rarely comparing apples with apples. More often grapes with pineapples.  Or perhaps it is apples with apples you are reading about, but your own business is a banana.  For instance the latest Holmes Sackett prime lamb benchmarking data released by MLA has an average flock size of 10,000 ewes.  Is that an apple, or a watermelon?

Benchmarking tries to simplify things for comparison sake.  I can understand the reasons for this, but in the particular case of labour efficiency it becomes an absolute farce. How can labour be measured in Dry Sheep Equivalents (DSE)?  Just quickly, you are running 2000 merino ewes each with a DSE rating of 1.8DSE (total 3600 DSE), and I am running 2000 composite ewes each with a DSE rating of 2.3 DSE (total of 4,600 DSE).   Based on a labour efficiency measure using DSE, I am around 30% more efficient than you.  Seriously?  Based on that if you want to be more labour efficient, just run the biggest ewes you can find… Simple (please don’t!)

I believe our industry is far too fixated upon being average, or better than average, or in the top 20%.  All of that would be fine if I thought we were anywhere near our potential.  If benchmarking is how we set our sights for the future, then all we will ever be is better than the rest.  But what if the r...
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