Benchmarking and management behaviours of top sheep and beef cattle farmers

Abstract

The aim of this dissertation was to gain an insight into the use of benchmarking in the current management practices of top performing sheep and beef cattle farmers in the South Island of New Zealand. The more specific objectives were to understand the management behaviours of a selected group of top performing farmers along with a study of the role of information in benchmarking and good management practices.

Using the Grounded Theory qualitative research method, six farmers were interviewed. The target sample was top performing sheep and beef cattle farmers in the East Coast of the South Island of New Zealand. Farmers were selected on criteria such as: being consistently in the top quartile of a particular farm accountancy practice; sound profits and high return on capital.

Results showed that the key characteristic of these six farmers is that they are 'information rich', and have many mechanisms to access information. They source information widely and avidly, with a discriminating behaviour. They read often, most read at least one hour per day. This behaviour also determines which meetings farmers go to. They participate in discussion groups only when relevant information can be obtained. Informal meetings are also a good source of information for benchmarking. They tend to associate with competent people.

Good quality information guides these top quartile farmers in their decision-making process. Farmers 'brew decisions' before taking action. Decisions are based on financial information as well as personal preferences. They have goals and targets for their operation, which must be challenging, relevant and achievable. Changes in the business are not done impulsively, they are rather cautious and gradual and based on good quality information. Changes are tested firstly on a small scale and if the outcome was desirable, the scale is then increased. They want to see it being done or tested somewhere else, therefore they are not usually the pioneers of adoption of new technologies or changes, but are certainly among the early adopters.

They are actively benchmarking and are aware of many aspects of their performance in comparison to the district or other selected top farmers. Information from an accountant is vital for benchmarking and was at times the criteria to choose the accountant who provides this service. They do not memorise all data but constantly refer to reports. However, they always have an understanding of the business as a whole. They believe that comparisons to other farms must be valid (same climate, same breed, etc).

Farmers' attitudes are a crucial factor in achieving top performance: they are consistent in their practices; concerned about timing of farm tasks; simplify farm work; work in teams; know their role in the operation; are meticulous and network frequently. Passion for farming is a key characteristic and farmers get a lot of satisfaction from their jobs. Not only this research has found that farmers from the top quartile are actively benchmarking, it has also shown that farmers would be prepared to benchmark more if it were possible.