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As members of a SPA-IRM group, cattlemen began to understand which data they needed to keep in order to analyze their ranching business efficiency from a variety of angles. SPA is nothing new; it's still an extremely useful tool in gauging efficiency in a herd.
Once an analysis of an operation is completed, the rancher's first question is “How am I doing?” That can only be answered by comparing an operation's performance to other aggregated data, or “benchmark” data, which helps identify operational strengths and weaknesses.
“If he doesn't have something for comparison, how does a rancher know if it's a strength or a weakness?” Hughes asks.
The knowledge allows operators to focus their management efforts. Hughes dubs the weak areas of an operation as the “bottlenecks” to profit. From there, he asks ranchers if management can be applied to remove the bottleneck. He suggests focusing on one bottleneck/year.
“If you can influence it and correct it with management, profits are going to go up,” Hughes says.
Dunn agrees — benchmarking can be a powerful tool — but cautions that producers can sometimes misuse the information, or choose to settle and not make improvements.
“If I have an 88% pregnancy rate and the benchmark is 90%, is mine good or bad?” Dunn asks. “A higher level may not be appropriate, or even achievable,” he says, noting that UCOP can increase trying to hit benchmarks.
In South Dakota SPA-IRM groups, Gessner and Mousel don't necessarily want producers comparing their operation to others in the group. Instead, Gessner advocates that producers look for change within their operation.
While producers are often anxious about an outsider viewing their production and financial data, Mousel says it's actually helpful to have a second opinion because it takes the emotion out of it.
“We have no interest in judging, no capacity to judge from just a computer screen. All we're doing is interpreting the analysis for them, helping them generate ideas,” Mousel says.
Benchmark data can be found in a variety of databases. FINBIN (www.finbin.umn.edu/) is one of the best in the nation, Hughes says. Users can determine variables and generate reports for free.
Regional data is more specific, but harder to come by. For good state and regional databases, Hughes recommends Texas SPA data and Farm Management Associations (Kansas for cattle operations and Illinois and Indiana for corn farmers). Cattle-Fax numbers have also been cited as benchmark data.