September 5, 2017 at 3:32 p.m.

Consider several factors when pricing silage

By By Ron Johnson- | Comments: 0 | Leave a comment

WILTON, Wis. - Farmers buying or selling silage made from drought-stressed face a problem. How can they arrive at a fair price for the feed?
Doing that can be tough, said University of Wisconsin-Extension agronomist Joe Lauer, during a recent field day near Wilton, Wis. Lauer told a couple of dozen farmers that several factors come into play.
They include the cost of growing the corn, grain prices, and harvesting, handling, drying and storage costs. Don't forget to add in the fertilizer value of the stalks and the value of the nutrients in the corn. Lauer said to pay special attention to the starch, neutral detergent fiber digestibility.
Of course, the amount of water in the corn plays a large role in figuring out a fair price, too.
"The amount of moisture has a major influence on the feed value and needs to be considered, to accurately determine fair silage prices," Lauer said. "Some growers will want to calculate the price based on corn grain yield, and some dairymen will want to calculate the price based on alternative forages, such as alfalfa. In either case, the final price is affected by supply and demand within a region."
The corn specialist added this reminder: "Before making any decision, consult an insurance agent for the additional impact on indemnity payments by selling silage versus grain."
Lauer offered an example of a corn silage transaction. Assume that in a good crop year, good corn silage is worth $40 to $50 a ton in a bunker silo. On the other hand, for dairy cattle, poor silage is worth 15 to 20 percent less, for a price of $32 to $43 per ton.
"For dairy herds producing over 80 pounds of milk a day, drought-stressed silage is probably worth 70 percent of the value of good silage," Lauer said. "That puts drought-stressed silage in the range of $28 to $35 per ton, stored in a bunker silo."
Custom harvesters normally charge somewhere around $3 to $5 a ton to chop corn and pack it into a bunker silo. But poor silage can take 1.5 to 1.75 times longer to harvest per ton, Lauer said. The longer time is due to lower yields and more travel time to chop a ton. That extra cost might add $1.5 to $2 per ton, boosting the price of poor silage to $25 to $37 a ton.

Estimating yields
One way to estimate the yield of corn silage is to base it on the amount of grain, also called a "grain equivalent."
Said Lauer, "For drought-stressed corn, about one ton of silage per acre can be obtained from each five bushels of grain per acre." For example, if a cornfield averages 37 bushels per acre, figure on it yielding about 7.4 tons of silage per acre.
But if little or no grain is expected from a field, a rough estimate of the expected silage yield can be gotten this way: Assume that one ton of silage at 30 percent dry matter will be chopped for each foot of plant height. Don't include the tassel in the measurement.
For example, suppose drought-stressed corn averages six feet tall below the tassel. If the corn is chopped to leave foot-tall stubble, five feet of corn will be harvested. So for one ton of silage for each foot of plant height, the yield will be five tons per acre.
Another way to calculate what a field will yield for corn silage is to choose a representative area for sampling. Don't select the worst-looking spot or the best-looking.
Next, measure the inches between the rows. Then, starting midway between two plants, cut a specific length of row. If the corn is 20 inches between rows, cut 13 feet of row. If the rows are 30 inches apart, cut eight feet, eight inches of row. For 36-inch rows, cut seven feet, three inches of row. And for 40-inch rows, cut six feet, six inches of row. Each of the four distances just stated represents one two-thousandth of an acre.
Now weigh the corn that has been cut. What that corn weighs in pounds tells you the tons of silage per acre that can be expected.
Lauer recommended repeating the whole process in six or seven representative areas of the field. Add all the numbers from the test areas and use the average number of tons for an estimated field average.

Other considerations
The agronomist talked about a couple of other things to keep in mind when buying or selling for drought-stressed corn.
For buyers, "Start with the price you're willing to pay for ready-to-feed silage," Lauer said. "When pricing it in the field, take into account these discounts: a lower feed value due to drought stress, the cost of harvesting it and making silage, transportation costs, and any feeding loss."
For example, if ready-to-feed silage is valued at $55 a ton, deduct 10 percent ($5.50) of the feed value because the corn was damaged by drought. Take another $12 per ton off the price as the cost of making silage. That leaves a maximum value of the corn in the field of $37.50 per ton.
Farmers selling corn should take a different approach, according to Lauer. They should start with the value of the corn if it was to be harvested for grain. They also should take into account the value of the fertilizer that will be removed if the whole plant is harvested.
If corn is estimated to yield five tons of silage per acre and 37 bushels of grain per acre, the value of the fertilizer removed is $80 an acre (five tons multiplied by $16 of fertilizer value per ton). Meanwhile, the value of the grain is $222 per acre (37 bushels multiplied by $6 per bushel).
Next, deduct $28 an acre for harvesting and marketing. When that has all been done, in this example, the corn - as it stood in the field - was worth $274 an acre, or $54.80 per ton of silage.[[In-content Ad]]


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