Pricing Corn Silage

corn silage

by Joel Bagg, Forage Specialist, & Greg Stewart, Corn Specialist, OMAFRA 

“What’s corn silage worth this year?” Grain corn prices have dropped considerably after unprecedented high prices last year, bringing corn silage prices down with them. With current grain corn and hay prices, corn silage still looks fairly attractive as an alternate forage. After excessive rain in some parts of the province this spring, the corn crop is quite variable in yield. In areas that were frost damaged, corn silage may have a lower grain to stover ratio.

Local supply and demand and negotiation between buyer and seller ultimately determines the price of corn silage. Price determination must be tailored to each individual situation. It is important that you make your own assumptions for your situation and calculate your own costs, in order to determine what you feel is an acceptable price. Then negotiate the best you can.

Corn Silage A Good Late-Season Forage Option

Approximately eighty-three percent of the corn acres in Ontario are planted with the intention of combining them as grain. Many of these corn acres are readily available for harvest as silage if needed. This gives the corn growing parts of the province a good late-season option when forage inventories get tight. Dairy producers can often increase the percentage of corn silage in the ration if necessary. Silage piles and silage bags provide flexible storage options, but some planning is required.

Example Calculations

One method to determine the price of corn silage is to compare it to the value of grain corn to determine a minimum price. As a seller, you would not want to sell it as corn silage for less than you could net selling it as grain. Buyers feeding corn silage to livestock might be prepared to pay more, depending on what alternate feedstuffs are available. From a livestock nutrient point of view, corn silage may be worth more in the ration than is reflected in the market.

These calculated corn silage values are not necessarily the cost of production, or the feed nutrient values, but reflect the market value of the alternate harvesting options (ie. harvesting as grain corn).

Tremendous variation in yield and quality can occur between fields. Many fields will have good yield and quality potential, while others do not. Higher yield reduces harvesting costs per tonne. Higher yielding corn fields also contain a higher proportion of grain relative to stover, usually making them greater in digestible energy. A “thumb rule” is 7.7 bushels grain per tonne (7.0 bu/ton) of silage at 65% moisture for a good crop. As an example, look at the fields in Table 1, Pricing Corn Silage Example Calculations. Example #1 has good yield, while Example #2 yields about two-thirds of that.

The expected grain value should be adjusted for custom combining, drying, and trucking charges to give a value of the crop in the field. The additional soil nutrient value (P and K) removed in the non-grain portion of the silage (stover) is significant, at about $3.50 per tonne of corn silage harvested (@ 65% moisture). Calculating the cost per lb or tonne of dry matter can help put corn silage in perspective relative to what the market is willing to pay for hay. If the seller is going to fill the silo for the buyer, custom silo filling charges should also be added. Storage costs, fermentation shrink and spoilage losses are not included. Refer to:

  • Guide to Custom Farmwork and Short-Term Equipment Rental

http://www.omafra.gov.on.ca/english/busdev/facts/10-049.htm

  • 2013 Field Crop Budgets

http://www.omafra.gov.on.ca/english/busdev/facts/pub60.htm.

Because of lower grain corn prices this year, corn silage price calculations have dropped by almost one-half from last year, returning to more historic levels. Percent moisture will have a significant impact on price, so it is important to sample and get reliable moisture numbers. Nobody wants to pay for water when they think they are buying feed. An error of only 5% moisture (ie. estimating 65% when it is actually 70%) is equivalent to almost $4 per tonne. (Refer to “Harvesting Corn Silage At the Right Moisture” http://fieldcropnews.com/?p=7953.)

Other Considerations

The local supply and demand of corn silage and alternate forages will influence the price. The availability of silage storage and the economics of feeding are considerations. Sellers with a potential Crop Insurance claim should contact Agricorp (1-888-247-4999) before harvest to determine how selling corn as silage will impact the claim. Good yield and quality estimates are important and should take into consideration actual weights and percent moisture. The removal of the stover organic matter could be considered as well.

This example is meant to be a general guide for farmers and should be used as a starting point in negotiations between the buyer and seller. Make your own assumptions and do the calculations specific to your situation.

 

Table  1 – Pricing Corn Silage Example Calculations

 

Example #1

“normal”

Example #2

“stressed”

 Assumptions
estimated grain yield

bushels / ac

tonnes / ac

 

165

4.19

 

115

2.92

bushels grain (15.5% moisture) per tonne silage (65% moisture)

7.7

7.2

corn silage yield (65% moisture)tonne / acre

21.4

 16.0

grain price (#2 grade, fall delivery, local)

$155.50 / tonne

($3.95 / bu)

$155.50 / tonne

($3.95 / bu)

 Calculations
gross grain value / acre

(grain yield X price)

651.75

454.25

– drying

(24% moisture @ $22 / tonne)

-92.18

-64.24

combining

-40.00

-40.00

– trucking (@ $9.00 / tonne)

-37.71

-26.28

= gross value / acre

before grain harvesting costs

481.86

323.73

+ extra P & K removed in stover(~$3.50/tonne of corn silage @ 65% moisture)

+74.90

+55.90

Value Standing
per acre

556.76

379.63

per tonne silage (65% moisture)

26.02

23.77

$ / tonne dry matter

74.33

67.92

¢ / lb dry matter

3.4

3.1

+ silo filling

($225/hour, 2.5 acres/hour)

+90.00

+90.00

Value Harvested
per acre

646.76

469.63

per tonne silage (65% moisture)(before fermentation shrink, spoilage & storage costs)

30.22

29.41

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