Profit Profiler

Profit Profiler is a financial and production analysis tool that allows you to identify bottlenecks with the goal of improving your farms profitability. The service will evaluate a period of one year that corresponds with your financial fiscal year end. Projections will use that base and show the impact of change for another year. It will allow you to identify the measures that identify progressive profitable dairymen

Your business will be compared to other progressive dairy businesses of similar size, production level and/or geographic location. You can choose which group to compare your business to.

Profit Profiler answers these questions:

What are the strengths and weaknesses of my business?
How do I compare to other progressive herds?
How would my inventories, labor requirements, cropping, financial and profit picture be impacted if I changed....
Provides a solution to expansion plans that may bog down because an accurate breakdown of the herd's current production, financial and profit picture is not available.

How does Profit Profiler work?
The dairyman needs to provide the requested financial, production and farm information. The program will calculate over 140 benchmarks for your dairy business, compare it to the average of similar herds and provide you a ranking in 39 key measures compared to the peer group.

The benchmarks combine both financial, labor, livestock production and cropping results to show strengths and opportunities in costs and production of:

Forages
Grains
Milk and components
Replacements
Labor

The 'WHAT-IF' option
Utilizing the 'WHAT-IF' option, you can see the financial impact of changing parameters such as production parameters, reproduction efficiency, udder health, replacement management or variable costs.

The program will calculate the new cost of production based on these changes, cost of additional quota and give back a report which compares current profitability to expected profit after changes are made.

The 'WHAT-IF' option is a very powerful decision making and planning tool.

What do you get back?
The program provides three 1-page reports including a overview of the business financial health, a breakdown of the cost of production for forages, grains, milk cows, and replacements and a report comparing your farm with others on production parameters from crops, livestock and farm investments.

Each report looks at the business from a different perspective. From the entire package you will be able to identify your production and financial strengths, and opportunities to improve profit.

Report 1 is an overview comparison of your business to the other businesses in the group. Whole farm profitability and economic ratios are compared. Some measures are:

Total variable cost
Total fixed cost
Debt per kg fat sold
Financial ratios
Milk sold per person
Principle and interest payments per kg of fat
Costs and returns over costs expressed as per hl milk or fat sold and per person

Report 2 shows cost of production for cows, replacements, forages and grains. In addition, you can compare the profitability of your dairy business with your whole-farm business. Some measures are:

Forage cost per acre
Grain cost per acre
Cost to raise a heifer
Cow cost per hl sold
Cow cost per kg fat sold
Actual home-grown feed cost
Return over cost per hl
Return over cost per kg fat
Cow and replacement feed, health and labor cost as percentage of milk sales
Total milk cow and replacement cost as percentage of milk sales
Profitability of the entire dairy enterprise as well as the whole farm business

Report 3 compares physical production numbers for each enterprise, investment, labor efficiency and shows you what percentage of your expenses is spent in crops, livestock, labor or debt. Some measures are:

Acres fed per cow
Forage cost per cow
Performance of 1st lactation animals
Milk and fat sold per cow
Milk revenue per person
Percentage of feed purchased
Return per cow or kg fat from milk cows only
Enterprise comparison
Comparison of your machinery, building and quota investment per cow to see how your peers are investing compared to you.

What do you need to provide?
The program has a list of 107 measures needed from your financial, production and other farm records. If you can document it in electronic format, the program can receive it directly or if not, a paper form is provided.

As it is a comprehensive evaluation, the measures include acreages, crops, labor, assets, revenue, expenses and a breakdown of these income statement items into four enterprises. This is so actual costs and returns of each enterprise will allow more accurate projections.

Each analysis includes a visit to your home to collect information and discuss results. The analysis takes about two to three hours to complete and a qualified DHI staff (or trained Financial Advisor), will assist you in collecting and editing the information. They will also take the time to go over the results with the you and other advisors of your choice.

While is not always easy to get all the information, DHI will be there to assist you.

Quality and confidentiality is KEY
All information is edited to be sure that only high quality data is used in the comparisons. In most cases, some discussion occurs to make sure everything is entered correctly. This assures reliability in the results.

All information is treated with extreme confidentiality with only approved DHI personnel having access to it. Reports are identified only by a user code which you will be given when you enroll. Any future correspondence will use the user code provided.

CanWest DHI will create benchmarks from the results from time to time but at no time will an actual farm business be used as an example. Averages will contain an approved minimum # of farms so as to render identifying any individual business impossible.

Value to the dairyman
CanWest DHI has a history of maintaining quality data and producing useful management measures. This is another important measure. Knowing how your business compares with other progressive dairymen is important. Seeing if you are progressing financially at the same rate as your peers is as important if not more so. The 'WHAT-IF'' option (which uses your own numbers), allows you to see what the financial and profit impact would be if you made one or more changes. This is most important!

Value to the Financial Advisor
Having a reference that identifies key benchmarks of overall business performance of progressive dairies is a valuable knowledge when consulting with clients. Other benefits include:

Having these benchmarks broken out by percentiles will give you a better understanding of just where your client is and how reasonable any proposed change may be.
Adding a Profit Profiler analysis to expansion proposals will give decision makers more comfort with decisions being made.
Adding Profit Profiler analysis to your service package increases your value to the client.
Profit Profiler benchmarks are invaluable when training new staff in the dairy business.
The use of both tables and graphs allows most people to see certain measures more clearly and understand concepts

Profit Profiler Dairy Financial Analysis Service is available to all dairymen. You do not have to be on a DHI testing program to use this service.

This type of "information" is invaluable in identifying opportunities for improved profit. It can easily translate into thousands of dollars.

The Profit Profiler fee
$895.00 per year provides:

Key reports
Unlimited peer group comparisons and 'WHAT-IF' reports upon request
Assistance to gather inputs requested and resulting reports

For more details contact Bill Grexton at 1-800-549-4373 ext 254 or by email at bgrexton@canwestdhi.com