Pricing Corn Silage In 2010

"What's corn silage worth this year?" Local supply and demand and negotiation between buyer and seller ultimately determines the price of corn silage. It is important that you make your own assumptions for your situation and calculate your own costs, in order to determine what you feel is an acceptable price. Then negotiate the best you can.

Corn Silage A Good Late-Season Forage Option

Approximately 85% of the corn acres in Ontario are planted with the intention of combining them as grain. Many of these corn acres are usually readily available for harvest as silage. Corn silage provides the corn growing areas of the province a good late-season option when forage inventories get tight or forage quality is reduced.

The corn crop is excellent in most areas of the province this year. However, with advanced maturity some of the corn silage was harvested at moistures less than optimum. Refer to OMAFRA Factsheet 07-047 "Harvesting Corn Silage At the Right Moisture" www.omafra.gov.on.ca/english/crops/facts/07-047.htm.

Example Calculations

One method to establish the price of corn silage is to compare it to the value of grain corn to determine a minimum price. As a seller, you would not want to sell it as corn silage for less than you could net selling it as grain. Buyers feeding corn silage to livestock might be prepared to pay more, depending on what alternate feedstuffs are available. From a livestock nutrient point of view, corn silage may be worth more in the ration than is reflected in the market.

These calculated corn silage values are not necessarily the cost of production, or the feed nutrient values, but reflect the market value of the alternate harvesting options.

Tremendous variation in yield and quality can occur between fields. Many fields will have good yield and quality potential, while others do not. Higher yield reduces harvesting costs per tonne and increases the proportion of grain and therefore energy. Higher yielding corn fields contain a higher proportion of grain relative to stover, and are usually greater in digestible energy.

The expected grain value should be adjusted for custom combining, drying, and trucking charges to give a value of the crop in the field. The additional soil nutrient value (P and K) removed in the stover is very significant, at about $5.50 per tonne of corn silage. Calculating the cost per lb of dry matter can help put corn silage in perspective relative to what the market was willing to pay for standing hay. If the seller is going to fill the silo for the buyer, custom silo filling charges should also be added. The Crop Budgeting Aids and the Custom Rate Survey are available from OMAFRA at www.gov.on.ca/OMAFRA/english/busdev/agbusdev.html. Storage costs and fermentation shrink are not included.

Other Considerations

The local supply and demand of corn silage and alternate forages will influence the price. The availability of silage storage and the economics of feeding are considerations. Sellers with Crop Insurance should contact Agricorp (1-888-247-4999) before harvest to determine how selling corn as silage will impact a claim. Good yield and quality estimates are important and should take into consideration actual weights and percent moisture. The removal of the stover organic matter could be considered as well.

This example is meant to be a general guide for farmers and should be used as a starting point in negotiations between the buyer and seller. Make your own assumptions and do the calculations specific to your situation.

Table 1 - Pricing Corn Silage Example Calculations (Minimum Values)