A tough year to harvest and price corn silage
|By Mike Rankin|
Until recently, it’s been a challenging year on the crop side of the ledger. In the rearview mirror are events such as widespread alfalfa winterkill in some regions and relentless rain events in many others.
From a corn perspective, maturity is all over the board due to late planting, and within field variability is equally as great. An early frost could spell doom for a lot of cornfields.
On the flip side, there may be more standing corn available for purchase from traditional grain operations as many will rightly surmise: “Why take a chance on making dry grain when I can get full value as a standing crop for silage?”
“Most late-planted corn will likely be immature and killed by frost,” said Joe Lauer, extension corn agronomist for the University of Wisconsin. During a recent phone conversation, he noted, “Patience will be required to allow the corn to dry to the proper moisture for storage and preservation.”
Lauer emphasized that starch content will be most affected with late-planted corn but also indicated this can be easily remedied by adding more grain corn into the ration. “Stover quality changes only slightly once the plant has silked,” he said.
What this all adds up to is that timing silage harvest will be a convoluted mess on many farms as some corn will mature on time, other fields will be late, and still other fields may be in the “wait for dry down to occur after a frost” mode.
Filling bunker and pile silos may also be a challenge where all of the corn won’t be ready at the same time. Decisions will need to be made as to whether to start a new pile or risk reopening up an existing pile. Some may choose to just fill a bag with any late-cut corn.
None of this will make life easy for custom chopping operations either.
“Dairy farmers will have to work closely with their custom choppers and let them know when the field was planted, when it silked, the current stage of development, and what the moisture is,” Lauer emphasized. “Harvest season will be extended this year, and any information that can be passed along to custom operators will help with planning and proper timing of silage harvest.”
Pricing this year’s crop
With variability in corn maturity and quality comes variability in price. Many approaches have been suggested for reaching a fair selling price for standing silage corn; through my former extension career years, I’ve tried just about all of them.
Most farmers want a method that’s simple yet justifiable. Research tells us that there are 7 to 8 bushels of corn grain in a ton of normal corn silage. The same research also documents variation in this number caused by whole plant moisture, the actual grain yield of the crop, and the actual grain-to-stover ratio. This ratio will be all over the board in 2019.
Often, it's suggested to simply multiply the price of grain corn times 7, 7.5, or 8 to get the comparative price per ton for wet silage. This will frequently get you in the ballpark but perhaps not in the right seat. It usually is a good estimate because the cost of grain harvest (a savings) is near equally offset by the value of additional nutrients and organic matter removed in the silage crop (a cost).
When pricing corn for silage, it’s best to first approach the transaction from the seller’s perspective. Generally, the seller is not going to price the crop for less than what could be made if it was harvested and sold for dry grain. The possible exception might be where there's certainty that the crop won't reach maturity to make a dry grain harvest possible.
To derive the fair market price for corn silage, calculate the potential gross income from grain (price x yield); subtract grain harvesting costs including combining, trucking, drying, storage, and harvest loss; then add back the fertilizer value of the stover being removed. The result from these calculations is then divided by the estimated corn silage yield to give an equivalent price per ton that equals the net grain return.
These calculations are often more work than many people want to deal with. Luckily, some extension personnel have developed spreadsheets to make this process much more bearable. Here are a couple of good examples:
The University of Wisconsin-Extension also has made available a mobile phone app that essentially does the same thing as a spreadsheet. It can be downloaded for both Android and Apple platforms (search for “corn silage pricing”).
Grain price drives the process
Keep in mind that the seller's equivalent net return for grain price is essentially a floor, or minimum price. From the buyer’s perspective, there may be reason to pay more or the need to look for cheaper alternative feeds.
Corn grain price is the primary silage price driver. Both buyer and seller need to first agree on how the base grain price will be determined. Some options include local price on a given date, average of local price on several dates, or using a futures market price. Once a base price is determined, some adjustments may still need to be made.
Harvest moisture is an important factor that is often overlooked when selling silage. If the base price is set for 65 percent moisture corn silage, an adjustment must be calculated if the silage is actually harvested wetter or drier than 65 percent.
Make price adjustments for immature corn. The easiest way to do this is to take a percentage of the normal price (for example: use 70 to 80 percent of a normal corn price based on lower silage quality).
Finally, sell by the ton; estimating silage yield and selling by the acre will almost always result in someone getting the short end of the cornstalk.