“How do I know if I am competitive?” “How can I become more competitive?” These were the questions from producers that led to the development and publication of “Dairy Excel’s 15 Measures of Dairy Farm Competitiveness” in 1997. Those same questions are just as valid today and can be answered in the context of today’s dairy industry using the newly released 2008 edition of the 15 Measures.
The 15 measures fall into 10 broad areas, which together provide a good view of the competitiveness of a dairy farm business. The 10 areas are:
1. Rate of production
2. Cost control
3. Capital efficiency
4. Profitability
5. Liquidity
6. Repayment schedule
7. Solvency
8. Mission
9. Maintain family’s standard of living
10. Motivated labor force
These measures represent key characteristics of the most competitive dairy producers in the midwest. Some dairy producers already exceed many of the measures. While a single dairy business is unlikely to meet all 15 measures, dairy producers who meet most of the measures are competitive with dairy producers anywhere in the world and enjoy a high standard of living.
Following a complete listing of the 15 measures and their competitive levels, are pages describing each measure in detail. These pages explain each measure, tell how to compute and interpret it, and discuss the desirable range. The measures were designed to be easily calculated with information readily available on most farms. We also suggest changes to help a dairy operation move into the desirable range.
Some dairy businesses do not meet many of the measures. Without change, these producers will likely be exiting the dairy business within the next 10 years.
The new “15 Measures of Dairy Farm Competitiveness” will be available both on-line and as a for-sale publication. Individual full-color, 50 page publications can be ordered through your local Extension Office. A link to the on-line version can be found at http://dairy.osu.edu after April 20th.