Road Warrior

Benchmarking to the Elite: Part 2

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My last article focused on some of the financial characteristics of producers who attended the Executive Program for Agricultural Producers (TEPAP) this year. Now I’ll discuss some of their management practices. This supercharged conference, coordinated by Danny Klinefelter, is an outstanding educational venue for agriculturalists that offers education and networking with individuals from over 20 states, four Canadian provinces, South America and Australia. Dick Wittman, the well-respected farm consultant from the Western part of the U.S., annually enumerates financial characteristics and management practices of the elite lifelong learners at TEPAP. I always enjoy Dick sharing this information with me because it provides a gauge or benchmark of what forward-thinking, progressive managers are doing.

One component of good management is annual written goal setting. One third of this year’s group had goals in place; another third was working on them; and the remaining producers had not written their goals, but they felt it needs to be done.

Digging deeper, 27% of the producers had a strategic plan, 37% were working on it and another 36%, while realizing they needed do it, had failed to follow through. In today’s world of uncertainty around every corner, goal setting and strategic planning are not options, but requirements.

Do these producers hold regular formal meetings devoted to addressing strategic, seasonal, and day-to-day activities? Yes, over 50% do, and 26% were in the process of doing so, but about 23% had “dropped the ball” in this very important area.

In a recent article I discussed benchmarking financial information. Approximately 23% utilize this is a management practice, while another quarter are in the process of doing it. An astounding 50% had not benchmarked their financials to industry norms or peer operations. This was a very surprising result especially given the size of the operations represented and the sophistication of these progressive managers. Benchmarking financials and going over these with your lender or advisory team can be a gauge of how your business is performing.

While the list of management practices is not comprehensive, it provides a take on how progressive ag producers are performing. Next year’s TEPAP conference will be Kleinfelter’s last year coordinating the program; however, the program will continue under new leadership going forward. The 2014 conference may be an opportunity to come together one last time with the presenters and leadership that have shaped North American and global ag management in the past quarter-century.

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What's Road Warrior?

Dave Kohl is an ag economist specializing in business management and ag finance. He can be reached at sullylab@vt.edu.

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