Figuring the cost of corn silage is no small task
Calculating the cost of corn silage comes down to estimating market price and yield.
During the roller coaster growing season of 2012, growers have had to consider drought, heat, questionable pollination and near record prices when pricing this year’s corn silage crop. With the volatility of the season, farmers are struggling to figure their cost of production. No matter whether the forage is being sold by the ton or the acre, the starting point is to estimate a market price and have an estimate of yield.
There are several different methods for estimating yield for corn silage. None of the methods are foolproof and all will carry their own set of challenges.
Measuring all loads removed
A scale can be used to weigh an average load and then multiplied by the total number of loads removed. As long as the corn silage has uniform moisture and loads don’t have tremendous variation, the weights can be a starting point.
Test strip method
Four random, replicated strips are left across the field and then weighed using a scale to figure tons removed. This helps to minimize some of the gross tonnage variability within a field.
Standing corn method
Four random strips are left across the field, similar to the previous method, except a combine is used to harvest the grain portion. Just like the test strip method, variability within a field can make a large difference in the bushels of grain harvested. This will provide you with the economic value of grain that was removed in the corn silage, but will not provide a real feed value of the corn silage that was harvested.
Some other factors should also be considered when pricing corn silage. These include who will cover or avoid the cost of:
- Silo filling
- Silo storage
- Delivery to the bunk
- Storage losses
The question of when to price the corn should be driven by local cash prices. The price can be set at the day of harvest, a pre-set date, or possibly a future date or trigger point between November and March. The option of pricing over a 12-month spread where 1/12 of the corn is sold at a specific day of the month will help mitigate some price risk. This can also be done similarly over a 10-month installment option. Both options can help spread income and price risk for both the buyer and seller.
No matter what option a producer wants to use for pricing corn silage, remember it still comes down to estimating market price and yield.