Pricing Drought Year Silage

November 6, 2012 09:46 AM
 

Iowa State University Extension economist William Edwards gives insight on pricing drought year silage. Growers may be willing to sell standing corn to be harvested either by the producer or a custom operator. Sellers need to consider asking a price that would help recoup losses while the buyer must stay below the feeding value of the corn itself.

Edwards writes, "One ton of normal, mature standing corn silage at 60 to 70 percent moisture can be valued at about eight times the price of a bushel of corn. For a $6 corn price, a ton of silage would be worth about $48 per ton. However, drought stressed corn may have only 5 bushels of grain per ton of silage instead of the normal 6 to 7 bushels. A value of about six times the price of corn would more appropriate. For silage with little grain content, a factor of five times the price of corn can be used.

If the crop is sold after being harvested and transported, those costs must be added to that value, typically $5 to $10 per ton, depending on whether it is done by a custom operator or the buyer, and the distance it is hauled. A buyer would only consider the variable costs for harvesting and hauling, whereas a custom operator would need to recover fixed costs, as well (click here for the full report)."

To find out what your silage or standing crop may be worth, ISU provides an electronic spreadsheet for calculating the value of corn silage for both the purchaser and the seller. Remember that insurance adjustments must be made before the crop is cut, but with hay and other roughage demanding a premium this year, that back-40 corn that didn't turn out so well may give you bartering fodder or even a valuable product that you can turn into cash.

(Click here for the spreadsheet)


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