FMS launch solution for profitable feed ingredients

This is the first flexible and customisable 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. 

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 utilise customer, site, product and process-specific pricing options.

• Visibility to historical pricing information.

• Ability to integrate with accounting and ERP systems

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 explains 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.