Determining Corn Silage Value
Uncertainty abounds in the countryside as dairy producers scavenge to fill their silos, bags and bunkers with the best feed available. However, the compromised quality of corn silage in a land that is typically brimming with forages is leaving both buyers and sellers scratching their heads on how to determine a fair price for this year’s crop.
Vita Plus dairy specialist Randy Greenfield covers considerations for pricing corn silage. He believes that the price on drought-stressed corn silage will fall somewhere between the price of wheat straw and the price of normal, high quality corn silage. In his area of southwest Wisconsin, he sees unharvested wheat straw priced in the field around $65 per ton of dry matter (DM) and good corn silage pricing in around $160 per ton of DM. While the condition of the corn crop varies throughout the state, he rationalizes that most drought-stressed corn will be priced somewhere between those values. Some field estimates place the dollar value of drought-stressed corn silage in the Midwest between $90 to $150 per ton of DM; energy values are estimated to be between 65 and 85 percent of normal corn silage.
Greenfield takes two approaches to determining the value of corn silage. Depending on the development of the grain, it may be more accurately priced as either grass hay/silage or as corn silage. Think about the situation from the grower’s perspective; he says, “If I’m growing corn and I had planned on combining it and selling it for grain this fall, if now that crop has zero potential for grain, you really need to price this stuff as a grass hay or grass silage product.”
On the other hand, if there is potential of yielding 30 to 50 bushels of corn per acre, then make estimates based on the grain value and price as corn silage. If the ears did not develop and the crop cannot be marketed as grain, it is basically a total loss for the grain producer. Consider, however, that there is some value to the grower in plowing the crop under as fertilizer, roughly $15 to $20 per ton of DM for the corn crop that is on the field.
Otherwise, he suggests, look at pricing based on the local market for hay that has been harvested and delivered to the farm. Greenfield uses $1 to $1.30 per point of relative feed value (RFV), adjusted for DM and the local price.
For example, a crop with basically no grain, and therefore, no starch, came in at 29.34 percent DM with a RFV of 79. Assuming the local market price for hay is $1.25 per point, that equates to a value $98.75 per ton of DM, or $28.97 per ton in the field. Subtracting $9 per ton for getting the crop off of the field by means of custom harvesting brings us to the value of $20 per ton that it might be worth. He notes, however, that the cost of custom harvesting could change this year depending on factors like yield and tons per acre.
For the dairy producer purchasing silage, a forage analysis test is worth the investment, Greenfield points out. “If you are using a sample analysis of the forage to determine the price, I would definitely recommend doing a wet chemistry analysis,” he says. He recommends this over the near infrared reflectance (NIR) analysis for a more accurate measure of RFV from which to base a price.
The other option is to price drought-stressed corn as corn silage. Though the yield could be low, the grower still has the option to hold off harvesting for silage in favor of harvesting for grain. Greenfield suggests using a spreadsheet like the Corn Silage Pricing Decision Aid, which can be downloaded from UW-Extension’s Forage Resources website (www.uwex.edu/ces/crops/uwforage/dec_soft.htm). Values for bushels per acre estimate and a DM estimate on the silage must be entered in order to predict wet tons per acre. In the given scenario assuming yield of 30 bushels of corn per acre and 35 percent DM, the spreadsheet calculates 7.31 tons of wet corn silage per acre.
On this particular model, one column shows the seller’s perspective, while the other shows the buyer’s side. “If I am looking at my crop and I know for certain that I could get 30 bushels to the acre and my selling price is $8.20, my gross value of the corn crop is $246 per acre,” he states. Estimates for additional costs such as harvesting, trucking, drying and shrinkage can also be added into the formula. Those costs are subtracted from the gross value, while the fertilizer value of the stover can be added. The spreadsheet calculation comes out to $29.49 per wet ton.
A second column shows the buyer’s side, estimating how much a producer could pay per ton of corn silage given the market conditions. Greenfield adjusted the purchase price of corn to $8.70 per bushel, and costs like harvesting and storage loss were entered. In this case, those costs took off $113 for a total value of around $230 per acre of corn silage, or $31.50 per ton on a wet basis.
Comparing these two perspectives, he feels this gives the buyer and seller some common ground to work from. “We are $2 apart on the value per ton. I think most reasonable adults could arrive at a fair price given those two estimates,” he says. “There is way too much variation in what is going on out there this year, and I would encourage you to work through a spreadsheet like this to come up with a fair value.” He adds, “Ultimately, supply and demand still rule.”