January 2025 - Journal Final - Flipbook - Page 12
Business
The Hidden Value
OF INFORMATION
Jim Marzolf
Executive Vice President
Pipestone Business
Jim Marzolf is a Minnesota native who graduated from the University
of Wisconsin with a B.S. in Animal Science; followed by an Executive
MBA from Purdue University. Jim brought his experience in livestock
production, 昀椀nance, and business management to Pipestone in 2019
and serves as Executive Vice President of Pipestone Business.
The decision to invest in improving your production and 昀椀nancial information systems may initially seem like
an added expense you can do without. However, accurate and actionable information is crucial for identifying
inef昀椀ciencies and opportunities for improvement. The following examples illustrate how better information enabled
farmers to quantify the value of problems or solutions, driving signi昀椀cant management changes that directly
enhanced their 昀椀nancial performance.
A
Reducing Feed Ingredient Costs
A farmer was
able to work with
his feed supplier
to reduce feed
costs by nearly
10%. The farmer
and his 昀椀nancial
advisor identi昀椀ed
this opportunity
by reviewing their
monthly 昀椀nancial
statements and industry benchmarking tools. The feed supplier changed their ingredient procurement and
feed pricing practices to reduce the farmer’s total feed cost by $10+/head. Such savings accumulate rapidly
across an entire operation and underscore the value of detailed 昀椀nancial analysis.
B
Correcting Feed Inventory Discrepancies
Over six months, periodic physical feed
inventory measurements revealed that soybean
meal and other inventory on hand was 9.6% less
than the inventory the 昀椀nancials were showing.
Further investigation uncovered a malfunctioning
load cell in the feed system, leading to actual
soybean meal usage being 9.6% greater than
anticipated. Monthly 昀椀nancial statements and
inventory reconciliation brought this issue to
light. Correcting the error had a signi昀椀cant
economic impact, amounting to $8.84 per
head from wean to 昀椀nish. This highlights the
importance of regular monitoring and the ability
to trace discrepancies back to their root cause.
12 | PIPESTONE JOURNAL
