The Rural Voice, 1999-12, Page 56PERTH ifRit
County Pork Producers NEWSLETTER
Where does your farm stand?
Any opinions expressed herein may
not necessarily reflect the views of
the Perth County Pork Producers'
Association.
The pork industry is going through
one of its most turbulent times in
history. Producers can't help but be
feeling anxious about where things
will settle out after the events of the
past year. Part of the reason for this
anxiety may lie in the fact that we
may not have analyzed our operations
financially to find out whether we are
competitive to other operations. This
problem is further compounded by
the fact that current industry
benchmarks are not accurate or
comprehensive enough to allow for a
proper comparison.
Currently, there are two analysis
projects which have been conducted
for several years. They are the
Ontario Farm Management Analysis
Project (OFMAP) conducted by
OMAFRA, and the Ontario Data
Analysis Project (ODAP), which is
prepared by Ken MacEwan and Lynn
Marchand from Ridgetown College.
The two projects are very similar in
how they are produced and in the
information in which they provide to
the participants. Both surveys
required input of the financial results
of an operation, and these inputs are
usually provided in such a way as to
provide analysis for different
enterprises or the farm (for example,
revenues and costs for the cropping
enterprise are split out from the
livestock enterprise to provide
enterprise analysis for both). If the
operation prepares its financial
information on a cash basis for
income tax purposes, then accrual
adjustments are made so as to
provide an accurate financial
position.
The report produced by these
projects provides an income
statement, balance sheet, and reports
on each enterprise in your operation.
From these statements, information is
used to analyze the financial strength
and profitability of your. farm. For
example, per cent return to assets,
equity, and owner's labour are
calculated. 'Cost efficiency is
determindd by calculating the capital
turnover on your farm, (how many
years of farm production it would
take to equal total farm assets), and
the. cost per dollar of farm
production. These and many other
measures of financial performance
can be compared to the average of the
participant's operations. A report
which summarizes the key areas. of
the statements for the past five years
for your operation gives participants
a quick review of how their operation
has been performing financially. •
A look at the summary of the 23
farm operations involved in the 1998
project confirms that last year was a
disastrous year for pork producers.
The average net farm income for the
farrow -to -finish farms.was $48,069.
Further investigation shows that the
top 10 farms averaged net income of
$49,679 while the bottom 10 farms
lost $156,704. The average per cent
loss of equity equaled 8.5 per cent
from 62.3 per cent down to 53.7 per
cent. Cost per dollar of farm
production ranged from $1.83
(meaning that these farms produced
$1 of production at a cost of $1.83),
to $0.65, showing a wide range of
cost control. The information
provided by these projects allow
participants an opportunity to
critically analyze their operations
with others to determine how
competitive they are.
Richard Yantzi, President
519-655-2766
• The Rural Voice is provided to Perth
County Pork Producers by the PCPPA.
One of the main weaknesses of
these projects is the fact that not
enough operations are involved to
make the comparisons accurate. More
participants in the program would
increase this accuracy and also allow
for comparison with operations closer
in size. To this end. representatives
from Ontario Pork and OMAFRA
have joined forces to firm a Cost of
Production/Benchmark Committee.
The objective of the committee is to
co-ordinate the efforts of the present
surveys of the Ontario pork industry,
and establish general standards to be
used to provide industry benchmarks
for use by producers in managing
their operations. The project would
include the three conventionaltypes
of hog operations, sow-weaner,
farrow -to -finish, and finisher as well
as the SEW style of pig production.
The committee is hoping to gather the
data then allow producers to be able
to compare their operation to the data
gathered from farms of similar type
and size, which will provide a very
important management and decision
making tool.
Ontario Pork is currently looking
for producers .who would be
interested in participating in this
project. If you would like your name
added to the list of producers
involved, please contact Keith
Robbins at Ontario Pork. The number
to call is 1-877-668-7675. Get
involved and find out where your
farm stands.0
— Submitted by Jim Van Herk
PERTH COUNTY PORK PRODUCERS'
PORK PRODUCTS
• Smoked Pork Chops • Fresh Pork Chops • Stuffed Loin Chops
• Smoked Sausage • Smoked Cheddar Sausage • Bacon Burgers
• Teriyaki Pork Steaks • Vittorio's BBO Sauce
AVAILABLE FROM.
Fred de Martines (Sebr.) 393-6812
Martin van Bakel (Dublin) 345-2666
Walter Bosch (Monkton) 356-9000
Ted Keller (Mitchell) 348-9836
DECEMBER 1999 53