Feed Strategy - November 2019 - 23

FeedStrategy ❙ 23

requires extended credit lines is to incorporate the cost
of financing into margins. This is the most common
method, easily accepted by customers and, in some
cases, the ability for them to buy on extended credit
overpowers any concerns over other issues. As it
happens, in the animal industry margins for farmers
are already very slim, and spending them on securing
an extended credit line might be a survival reaction but
certainly not the way to make real money. Of course,
there are nutrition suppliers that can absorb the cost of
financing an extended credit line, passing it on to the
marketing budget - if the customer is an influential
enough entity - or if they have other businesses that
can help for a period of time.

Lower expenses required
If someone cannot finance the extension of a lengthy
credit line to customers, the other alternative is to
alter the ratio between cost and price by lowering the
expense required for the proffered product. This can be
done, quite honorably, by finding alternative suppliers
or partners, by buying raw materials in volume or
through extended credit or by focusing on product
codes that are more profitable. Finding a new market
is also an option, but that requires a totally different
line of thinking and action. In the end, the cost of
products sold on extended credit line must be lowered

FINDING A NEW
MARKET is also an
option, but that
requires a totally
different line of
thinking and action.
to absorb the cost of financing. The same markets also
suffer from a higher-than-normal default rate and, as
such, the cost of insuring invoices is making matters
even worse. Some suppliers simply refuse to sell to

ALSO, THERE ARE
THOSE who opt to
remain in business
by offering less for
the same amount of
money.
certain buyers because they cannot afford the cost of
insurance.

Offer less for the same amount of money
Finally, if none of the above can be accomplished, there
are those who opt to remain in business by offering
less for the same amount of money. They will simply
skimp on quantity or quality in hardly perceivable ways
that may or may not affect animal performance. This
is not something that anyone will admit publicly, but
having lived on this world for 50 years and worked in
three continents for 30 of those years, I can attest that
this is not as rare as some may want to believe. In some
regions of the world this is the norm, and it is not only
accepted and recognized by customers, but it is also
taken into account when doing business. This is not the
way I do business, nor do I condone it, but denying such
business practices exist is tantamount to questioning the
diverse nature of humanity.
In closing, I would like to bring up another
example that proves there are many ways to do business, and that human ingenuity can overcome any
hurdle. I recall a potential customer who refused to
update their pig nursery program to a more proper
- and less expensive - version, only because their
current supplier was helping them dispose of one
of their business byproducts. This was a
clear quid pro quo case where both sides
exchanged benefits and accepted losses. It
was not a very profitable solution for either,
but they both still survive in a very difficult market. ■

Ioannis Mavromichalis, Ph.D., is an animal nutrition industry consultant. To contact, Mavromichalis,
email imavromichalis@icloud.com.
November 2019 ❙ www.FeedStrategy.com


http://www.FeedStrategy.com

Feed Strategy - November 2019

Table of Contents for the Digital Edition of Feed Strategy - November 2019

Feed Strategy - November 2019
Contents
In the Mix
FeedStrategy.com
Climate change and animal feed: mycotoxin risk mitigation
How to adapt to the changing mycotoxin landscape
Scientists seek new ways to combat spread of mycotoxins
Feed additives that will succeed in 2020 and beyond
Marketing nutrition by extending credit
More feed, fewer mills: feed industry consolidation
How to target protein content in late-lactation cow diets
Critical junctures in early chick nutrition confi rmed
How pelleting influences particle size in animal feed
Products
Advertisers’ Index
Feed Strategy - November 2019 - CT1
Feed Strategy - November 2019 - CT2
Feed Strategy - November 2019 - Feed Strategy - November 2019
Feed Strategy - November 2019 - Cover2
Feed Strategy - November 2019 - CT3
Feed Strategy - November 2019 - CT4
Feed Strategy - November 2019 - Contents
Feed Strategy - November 2019 - In the Mix
Feed Strategy - November 2019 - FeedStrategy.com
Feed Strategy - November 2019 - Climate change and animal feed: mycotoxin risk mitigation
Feed Strategy - November 2019 - 5
Feed Strategy - November 2019 - 6
Feed Strategy - November 2019 - 7
Feed Strategy - November 2019 - How to adapt to the changing mycotoxin landscape
Feed Strategy - November 2019 - 9
Feed Strategy - November 2019 - 10
Feed Strategy - November 2019 - 11
Feed Strategy - November 2019 - Scientists seek new ways to combat spread of mycotoxins
Feed Strategy - November 2019 - 13
Feed Strategy - November 2019 - 14
Feed Strategy - November 2019 - 15
Feed Strategy - November 2019 - Feed additives that will succeed in 2020 and beyond
Feed Strategy - November 2019 - 17
Feed Strategy - November 2019 - 18
Feed Strategy - November 2019 - 19
Feed Strategy - November 2019 - 20
Feed Strategy - November 2019 - 21
Feed Strategy - November 2019 - Marketing nutrition by extending credit
Feed Strategy - November 2019 - 23
Feed Strategy - November 2019 - More feed, fewer mills: feed industry consolidation
Feed Strategy - November 2019 - 25
Feed Strategy - November 2019 - 26
Feed Strategy - November 2019 - 27
Feed Strategy - November 2019 - How to target protein content in late-lactation cow diets
Feed Strategy - November 2019 - 29
Feed Strategy - November 2019 - 30
Feed Strategy - November 2019 - Critical junctures in early chick nutrition confi rmed
Feed Strategy - November 2019 - 32
Feed Strategy - November 2019 - 33
Feed Strategy - November 2019 - How pelleting influences particle size in animal feed
Feed Strategy - November 2019 - 35
Feed Strategy - November 2019 - 36
Feed Strategy - November 2019 - 37
Feed Strategy - November 2019 - 38
Feed Strategy - November 2019 - Products
Feed Strategy - November 2019 - Advertisers’ Index
Feed Strategy - November 2019 - Cover3
Feed Strategy - November 2019 - Cover4
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