The Wisconsin Dairy Farm Ratio Benchmarking Tool
The Wisconsin Dairy Farm Ratio Benchmarking is a tool (spreadsheet or web-based) especially created for this project. It compares dairy farm's financial status with +500 dairy farms in the State of Wisconsin since year 2000. The Agriculture Financial Advisor (AgFA) dataset collected and maintained by the University of Wisconsin Center for Dairy Profitability is the foundation for this benchmarking analysis. This tool calculates 15 financial measures (sweet-15):
Liquidity: Current Ratio, Net Working Capital
- Solvency: Debt Asset Ratio, Equity Asset Ratio
- Profitability: Net Farm Income, Rate of Return on Farm Assets, Rate of Return on Farm Equity, Operating Profit Margin Ratio
- Repayment Capacity: Term Debt Coverage Ratio, Replcament Margin
- Financial Efficiency: Asset Turnover Ratio, Operating Expense ratio, Depreciation Expense Ratio, Interest Expense Ratio, and Net Farm Income Ratio.
Also the Wisconsin Dairy Farm Ration Benchmarking tool performs a DuPont Analsysis.
The user has the possibility to custom-made the analysis by selecting from a series of categories that best describe an operation for a specific year. The dataset contains information from years 2000 to 2008 and the follwoing categories of analysis:
- Herd Size: <50, 50-100, 100-150, 150-300, >300
- Income per Cow: <4000, 4000-4500, 4500-5000, 5000-5500, >5500
- MIlk per Cow per Year: <16000, 16000-19000, 19000-22000, 22000-25000, >25000
The tool presents all information visually in graphs where cumulative distributions are displayed. The cumulative distribution is the proportion of farms for a specific financial measure. The user can know exactly the farm's position with their peers. Additionally, suggested limits (industry standards) are displayed as green and red lines to indicate the farm's financial status compared with widely used standards.
The Wisconsin Dairy Farm Ratio Benchmarking has been a long time requested tool and now is available free of charge:
Wisconsin Dairy Farm Ratio Benchmarking Web-Based system (Play)
Wisconsin Dairy Farm Ratio Benchmarking Spreadsheet system (Download).
A powerpoint presentation about the tool and the financial benchmark included can also be downloaded (here).