Level Up Hort

How operating efficiency targets differ between agricultural industries

Operating efficiency is an important metric measured in Planfarm’s business analyses, as it highlights how effectively resources within a farm business are being utilised and provides insight into the farm’s productivity and profitability.

As part of the analysis process, Planfarm consultants often set operating efficiency targets for their clients to work towards and help make strategic and informed decisions (i.e. resource allocation and farm management), adapt to changing market conditions, and maintain profitability in their industry.

For the majority of broadacre farmers, this target is set at 65%, ensuring that for every $1 of income made, the business retains $0.35 to cover business overheads, mitigate fluctuations in environmental and market conditions, and reinvest into their business. Planfarm has recently branched into horticulture consulting, working with horticulture businesses across WA and interstate, and it has
become apparent that the target of 65% is not necessarily achievable in other industries and therefore isn’t a one size fits all figure.