Blog – Your Farm’s Report Card

Ever wonder how some dairy farmers seem to have their finger on the pulse of everything happening on their operation, while others are constantly putting out fires and wondering where the season went wrong? The secret isn’t luck or some mystical farming intuition – it’s having the right Key Performance Indicators (KPIs) working for them. 

Think of KPIs as your farm’s report card. Just like you wouldn’t drive your car without checking the fuel gauge or speedometer, you shouldn’t run your dairy operation without tracking the numbers that really matter. 

Why Most Farmers Are Flying Blind 

Here’s a sobering reality: many dairy farmers are making million-dollar decisions based on gut feeling and last year’s accounts. But in today’s volatile market – with milk prices swinging from $4.30 to over $10.00, and input costs on their own wild ride – that approach is like trying to milk in the dark. 

Your annual financial statements are great for the bank and the taxman, but they’re often 6-9 months out of date. By the time you realise something’s gone sideways, you might already be too deep in the hole to easily climb out. 

What Are KPIs, Really? 

Don’t let the fancy business term put you off. KPIs are simply the vital signs of your farming operation – the numbers that tell you how healthy your business really is, in real time. 

For dairy farmers, your KPIs might include: 

Production KPIs: 

• Milk solids per cow 

• Production per hectare 

• Somatic cell count 

• Calving spread 

Financial KPIs: 

• Farm working expenses per kg MS 

• Profit margin 

• Debt per KgMS 

• Debt to equity ratio 

Operational KPIs: 

• Feed conversion efficiency 

• Reproduction rates 

• Labour productivity 

• Days in milk 

The beauty is, you don’t need to track dozens of them. Pick 5-6 that really matter for your operation and focus on those. 

The Power of Benchmarking 

Here’s where KPIs get really interesting. It’s one thing to know your farm working expenses are $6.20 per kg MS – but is that good or terrible? Without context, numbers are just numbers. 

That’s where benchmarking comes in. Tools like Figured and DairyBase let you compare your performance against similar farms in your region. Suddenly, you’re not just looking at your own numbers in isolation – you’re seeing how you stack up against your peers and identifying where the real opportunities lie. 

At CMK, we regularly use these benchmarking tools with our clients. We’ve seen farmers discover they were actually performing well above average in areas they thought were problematic, while uncovering hidden opportunities in areas they’d never considered. 

Real-Time Decision Making 

The real magic happens when you start using KPIs for day-to-day decisions, not just year-end reviews. Imagine being able to: 

• Identify which paddocks are underperforming and need attention 

• Track whether that new feeding program is actually paying off 

• See exactly how weather events are affecting your operation 

This isn’t about drowning in spreadsheets – it’s about having the information you need to make confident decisions when they matter most. 

Technology Makes It Simple 

The good news? You don’t need to become a data analyst overnight. Modern farm management tools like Figured can track most of your KPIs automatically, pulling data from your existing systems and presenting it in ways that actually make sense. 

Your milk company already provides production data, your feed suppliers have quality information, and your accounting software tracks the financial side. The trick is bringing it all together in a format that helps you make better decisions. 

Starting Small, Thinking Big 

Don’t try to track everything at once. Start with 3-4 KPIs that matter most to your operation right now. Maybe it’s production per cow, farm working expenses per kg MS, and reproduction rates. Get comfortable tracking and understanding these before adding more. 

The key is consistency. Check in with your KPIs monthly, not just at the end of the season. Make it part of your routine, like checking the weather or walking through the shed. 

The Bottom Line 

In an industry where margins are tight and variables are many, KPIs give you the control and confidence every successful farmer needs. They help you spot opportunities, avoid problems, and make decisions based on facts, not feelings. 

The most successful dairy farmers we work with all have one thing in common – they know their key numbers, they track them regularly, and they use them to drive continuous improvement in their operations. 

Ready to get your farm’s KPIs working for you? At CMK Accountants, we help dairy farmers identify, track, and benchmark the KPIs that matter most to their operations. From setting up simple tracking systems to conducting detailed benchmarking analysis, we’ll help you turn your farm’s data into actionable insights. 

Let’s have a conversation about your numbers. Contact us today to discuss how KPIs can help you make better decisions, improve profitability, and build a more resilient farming operation. 

Contact CMK Accountants: 06 765 6178 | cmk@cmk.co.nz | Visit us in Stratford, Hawera, or New Plymouth 

Because when it comes to dairy farming, what gets measured gets managed – and what gets managed gets improved.