Monitoring Data for the Team

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Monitoring Data for the Team
Slide Source Bradley J. Hilty Penn State Dairy
Alliance [phone] bhilty_at_psu.edu
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Monitoring Data for the Profit Team

• Successful dairy businesses
• Key benchmarks for business
• Targets for teams
• Detecting bottlenecks
• Monitoring monthly
• Using resources
• Past team successes

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I. Successful Dairy Businesses
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I. Successful Dairy Businesses

• Successful dairy businesses must provide
• Adequate returns to owner labor and management,
  in addition to
• Adequate returns to capital investments!

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I. Successful Dairy Businesses--Profitability
Factors
Profitability - ROA
Operations Efficiency Operating Expense Ratio
(OER)
Capital Efficiency Asset Turnover Ratio (ATR)
Return to Unpaid Family Labor Owner Labor and
Management
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I. Successful Dairy Businesses --Business
Management Keys
Strategic Management Doing the RIGHT
things! Operations Management Doing THINGS right!
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Strategic Management Deals with the Big Picture
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II. Key Benchmarks for Business
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II. Key benchmarks for business

• Profitability
• ROA 8-10
• Financial efficiency
• OER lt75 for corp. lt65 other structures
• Capital efficiency
• ATR - gt.60 dairy and crops gt1 dairy only

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II. Key benchmarks for business
Profitability   Return on Assets (ROA) gt10

Financial Efficiency Operating Expense
Ratio OERlt 75-Corp  OERlt65 -SP/P
Capital Efficiency Asset Turnover Ratio   ATR gt.6
Dairy Crops ATRgt 1.0 Dairy
Five Star Financial Benchmarks
Liquidity   Term Debt Lease Coverage Ratio
(TDLCR) gt 1.20
Solvency   Equity Equity gt 60
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Analyzing Reports Key Production Areas
II. Key benchmarks for business

• Management Area Benchmark Goal
• Production Milk/Cow/Day 85
• Repro Status Days in Milk 175-185
• Repro Performance Pregnancy Rate 22-24
• Udder Health SCC lt200 K
• Total Cow Management Cull Rate 25-35
• Other diagnostic benchmarks are also important.

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III. Targets for Teams

• a. Detecting Bottlenecks

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III. Targets for Teams
Monitoring the right information helps detect and
prevent bottlenecks
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Businesense What is a Bottleneck?
Production Systems Are Pipelines
PRODUCTS
INPUTS
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BusinesenseWhat is a Bottleneck?
A restriction in the product pipeline
INPUTS
PRODUCTS
Fixing the wrong bottleneck is of no benefit.
It is important to detect correct the most
restrictive bottleneck first.
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III. Targets for Teams

• b. Monitoring Monthly

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III. Targets for Teams---Using the right
information

• What factors are critical to success?
• Milk Volume
• Milk per cow per day
• DIM
• Repro Performance
• Udder Health - SCC
• Cow numbers
• Cull Rate
• Replacement performance
• Repro Performance

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III. Targets for Teams ---What are key
indicators?

• Milk per cow per day
• DMI
• Milk Starts
• Peak phase milk
• Components
• Prot / Fat Ratio
• Udder Health
• Early Lactation SCC
• Culling
• Transition cow problems

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III. Targets for Teams---Monitoring information

• Milk Production Daily
• Feeding data Daily??
• DMI, FE, IOFC
• SCC / Milk Quality Indicators Dairy tests
• PG rate 21 days
• Cull Rate monthly / annually
• Others see monthly monitor

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III. Targets for Teams

• c. Using resources

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Monitoring Tool

• Monthly Monitor
• Available on website or through Dairy Alliance
  office at
• 1-888-373-7232

Monthly Monitor 3.0.xls
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PublicationAnalyzing Your Dairy Business A
Systematic Approach to Using Benchmarks
Profit Team Tools
Contact the Dairy Alliance Office for copies
at 1-888-373-7232
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Other Profit Team Tools

• Dairy Farm Business Summary

Contact the Dairy Alliance Office for more
information at 1-888-373-7232
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PA Dairy Tool from Penn State
Contact the Dairy Alliance Office for more
information at 1-888-373-7232
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Past Profit Team Successes

• 2004 data with pilot farms.

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Pennsylvania Dairy Profit Teams Pilot Year of
Project

• Some Key Numbers (2004)
• Herd Size 205 55-740
• Milk per Cow 20,000 12.5 K 28 K
• ROA 3.0 -16.8 - 23.8
• ATR . 40 .18 - .93
• Investment/Cow 11,000 4,700 - 20,000
• OER .80 .55 - 1.18
• Cows/FTWE 37 17 65
• Operational COP 13.80 9.15 - 18.78

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Questions?