The Texas Dairy Industry’s Benchmarking Data
Benchmarks help you see where your dairy stands against others, but only if you compare the right things. Here is how a Texas dairy can find and use benchmarking data without drawing the wrong conclusions.
What is benchmarking in dairy?
Benchmarking means comparing your numbers with a reference, such as an average from similar farms, a standard from your industry or your own past performance. The point is to spot where you are strong and where there is room to improve.
Any specific figures in a headline about benchmarking are as reported by whoever published them. This page repeats none, so check the named source for current data and the way it was collected.
Another kind of benchmark is internal. Comparing this year with last year, or one pen with another, can be more useful than any national average. Benchmarking is not about winning. It is about knowing where you stand so that you can decide what to do next.
Where does benchmarking data come from?
Sources include government statistics, university and extension programs, cooperatives, processors, consultants and farm record software. Each has a different sample and a different purpose.
For national data, look at USDA NASS and the Economic Research Service. For farm-level economics, university programs such as the work shared by farmdoc daily and Texas A&M through AgriLife Extension can help. Hoard's Dairyman at its website discusses management benchmarks as well.
Some sources charge for access and others are free. Free is fine if the method is described, and paid is not automatically better. Read the notes before you rely on it. The Dallas Fed also publishes regional economic information for Texas.
- Government statistics
- Extension and university programs
- Cooperative or processor summaries
- Consultant or software databases
- Your own history
What should you compare?
Pick a small number of measures that connect to profit: feed cost per hundredweight, milk per cow, components, herd turnover, cull and death rates, labor efficiency and total cost of production. Use the same definitions each time.
Compare similar farms. A small pasture-based herd and a large drylot herd in the Texas Panhandle are not twins. Region, size and system matter. A fair benchmark says who is in the comparison group.
A rule of thumb: if you cannot explain how a measure is calculated in two sentences, you probably should not compare it yet.
Avoiding bad comparisons
Be careful with averages. They hide a lot. Ask about the spread, not just the middle, and ask how many farms were included. A small sample can mislead. Also check the year, since markets and weather change what is normal.
Never feel bad about a single number. A figure that looks weak might reflect a decision that makes sense for your farm, like heavy investment in cow comfort. Look at the whole picture, including cash flow, using ideas in this farm money guide.
Document the date you pulled each comparison, because yesterday's reference may not be next year's.
From numbers to action
Choose one or two things to improve each year, set a target, make a plan and check the result. Talk with your nutritionist, veterinarian and lender. The herd management guide suggests practical angles to consider.
Keep a notebook of your own benchmarks from year to year. Over time, your own trend is often the most useful comparison of all.
Share what you learn with your team in plain words. A chart on the office wall can start good conversations.
Questions to ask about any benchmark
Before you trust a benchmark, ask a few plain questions. Who collected the data? How many farms are in it? Which years? How are the measures defined? Were the farms selected, or did they volunteer? An answer of we do not know is itself useful information.
Also ask what is not in the benchmark. Some programs include only farms that already keep good records, which can make the average look better than the real world.
Finally, ask whether the comparison group is a fair match for your size, system and region. If it is not, find another.
A little humor and a reminder
farm.FM has a dairy section and farm economics coverage, and a farm.FM piece on farm numbers is a nice reminder that numbers need context. Over at farm.FM nobody claims a spreadsheet can milk a cow.
Meanwhile the real comparisons come from your own records and the sources named above.
Sources and further reading
- USDA NASS: agricultural statistics and surveys
- USDA Economic Research Service: farm economy data and analysis
- farmdoc daily: University of Illinois farm economics
- Texas A&M AgriLife Extension: Texas extension service
- Hoard's Dairyman: dairy trade publication
- Dallas Fed: regional economy including Texas and Oklahoma
Ask locally: Your nutritionist, herd veterinarian and county AgriLife Extension agent can help you pick fair comparison groups.