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FMS introduces First Flexible Pricing Solution That Maintains Profits as Ingredient Prices Fluctuate

For feed manufacturers who risk dwindling margins if their finished goods pricing is out-of-step with the constant price fluctuation of ingredients, Feed Management Systems, Inc. (FMS) has created Pennent® Pricing on Sivado. This is the first flexible and customizable pricing solution developed exclusively to provide animal feed manufacturers with a clear picture of what it costs to produce a specific formula and how that formula should be priced for customers

April 10, 2013

Pennent® Pricing on Sivado is the second application built on FMS’s next-generation technology platform, Sivado, which enables broad data integration, data sharing and communication. Pennent® Pricing on Sivado leverages these capabilities in a new and unique application that—for the first time—enables feed manufacturers to efficiently manage complex pricing inputs while automating repetitive tasks and making it easier to provide more frequent price changes. 

John Conboy, FMS’s Global Portfolio Manager for Manufacturing and Operations explained the challenge: “Pricing finished goods in today’s feed industry is a complex and challenging task. Pricing, if not monitored and updated on a regular basis, can lead to dwindling margins and ultimately affect your bottom line. In today’s environment, the frequency at which items need to be re-priced has increased dramatically due to the global and volatile nature of the ingredient market. This volatile market is the new norm and you must adapt your business to ensure you can keep up.”

According to a Wells Fargo & Co. agricultural economist, this year’s high feed costs have dramatically cut into cattle feedlot profits. Reeling from the worst drought since the 1930s, the Midwest corn output sent the price of a main feed ingredient to an all-time high in August—driving up cattle futures to another record high in January.  “This is exactly the type of scenario that feed manufacturers could address with Pennent® Pricing on Sivado,” Conboy said. 

Pennent® Pricing on Sivado enables a feed manufacturer to manage changes in an ingredient’s price without draining resources. Key capabilities include:

  • Ability to determine accurate pricing from consistent, manageable pricing components.
  • Flexibility to utilize customer, site, product and process-specific pricing options.
  • Visibility to historical pricing information.
  • Ability to integrate with accounting and ERP systems

Pennent®, a Feed Management Systems brand, is the world’s leading manufacturing and operations solution for the global animal feed and nutrition industry.

VIDEO: Pennent Mill Manager on Sivado was introduced at a launch event on October 18, 2012. View key discussions on the industry, FMS, Pennent Mill Manager and the Sivado platform. Pennent Mill Manager is the first "operational hub" for feed manufacturers, linking formulation, purchasing, manufacturing, operations and financial data to create a single view of all business operations data.