KPIs
Key Performance Indicators (KPIs) are calculated for an individual farm and are valuable in tracking performance over time. Everyone measures success differently - the way you determine success will depend entirely on your own business and personal goals. KPIs can help identify what you are doing well and identify areas for improvement.
DairyBase uses two different types of KPIs when benchmarking: Financial and Physical. See below to find out more:
Financial
- Operating Profit/ha: Measure of dairy farm profitability by ha. This is the dairy operating return after an allowance for the value of change in: dairy livestock numbers; non-paid labour and management; supplementary feed inventory change; owned run-off adjustment and depreciation
- Farm Working Expenses/kgMS: The total dairy farm cash expenditure, including labour, stock feed, and other working expenses and overheads per milksolids
- Operating Return on Dairy Assets (%): Dairy operating profit (as above) plus owned run-off adjustment, less rent as a percentage of opening assets (last years’ closing). The return on assets employed at beginning of the year to generate the income
- Return on Equity (%): Dairy operating profit (above) plus owned run-off adjustment plus net off farm income, less rent less interest as a percentage of opening equity (last years’ closing equity).
This measures the return on the funds employed by the owner. There are two calculations - one is calculated taking into account the change in capital value of assets, the other is based on recorded costs per the financial statements (which may or not maybe re-valued) - Growth in Equity (%): The change in owner’s equity during the year as a percentage of opening equity
- Discretionary Cash: This represents the cash available to meet capital purchases, debt repayments, drawings, and extraordinary expenses. Cash operating surplus less rent, interest and tax, plus net non-dairy cash income, income equalisation and net off-farm income.
Physical
- Cow efficiency (kgMS per kg livestock live weight): Milksolids does produced by cows compared to her size
- Pasture eaten (tDM/ha) and energy eaten (MJME/ha): How much of the pasture is eaten and how much feed energy each hectare produced
- Total Supplements Used (kg DM/cow): How much the cows eat.
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