Economics and Budgets

Buying and selling silage

Buyers of silage should be sure to test the forage prior to sale. Price should be set based on dry matter content and nutritional value. Often other transaction costs such as delivery, handling, and storage must also be considered. If the silage is purchased in the field, harvest costs must be deducted from the "market" price or the agreed upon value of the forage must be discounted for these costs.

Producers interested in selling silage must first consider whether the prevailing price for silage will cover their costs of production. Costs of production include the direct cash expenses such as seed, fertilizer, fuel, chemicals, and hired labor, as well as indirect costs such as machinery repairs and ownership costs, land rental, and the value of unpaid labor. The easiest way to estimate cost of production is to total all costs for the silage enterprise and divide by the total amount of silage produced. This results in a total cost per ton of silage. Machinery costs should be prorated based on hours of use. Thus, if the planter is also used to plant soybeans, then only a portion of its annual cost should be allocated to corn silage.

Sellers of corn silage should have a forage test available for prospective buyers. This documents the nutritional value of the silage, which often results in a higher price.

There are also alternative marketing strategies for corn silage. The first is to store the purchased crop on the farm until later in the spring when forage supplies are tight. The silage should command a higher price at that time. Sellers should be careful to market their crop prior to the availability of new crop hay, however, and should also be sure that any price premium received at that time of year covers storage and interest costs. Another alternative is to sell silage earlier in the year with the provision that the crop will be stored on the farm and delivered as needed to the buyer. Again, the seller should make sure that hauling and storage costs are included in the price of the silage. Some producers take this system a step further and deliver complete rations to buyers, mixed to their specifications. Both types of transactions
should include a written contract.

Corn silage prices are affected by the availability and price of alternative feeds. Hay and haycrop silage can be substitutes for corn silage with an adjustment of the grain portion of the ration. Consequently, corn silage value depends on hay prices and grain prices. The market value of the nutritional content of corn silage increases as hay and corn prices increase, but decreases with soybean meal price increases. This last phenomenon is because corn silage must be supplemented with protein feeds, while legume hays and silages need much less protein supplementation.

Appendix Table 1. Approximate bunker silo capacity

W x H x L (ft) Total silo volume (cu ft) Silage capacity1 (cu ft) Corn silage2 (tons DM)
20 x 8 x 40 6,400 5,760 40
20 x 8 x 80 12,800 12,160 85
20 x 12 x 40 9,600 8,160 57
20 x 12 x 80 19,200 17,760 124
40 x 12 x 80 38,400 35,520 249
40 x 12 x 120 57,600 54,720 384
40 x 12 x 160 76,800 73,920 518
40 x 16 x 80 51,200 46,080 323
40 x 16 x 120 76,800 71,680 502
40 x 16 x 160 102,400 97,200 682
40 x 20 x 80 64,000 56,000 393
40 x 20 x 120 96,000 88,000 617
40 x 20 x 160 128,000 120,000 841
60 x 16 x 120 115,200 107,520 754
60 x 16 x 160  153,600 145,920 1,023
60 x 16 x 200 192,000 184,320 1,292
60 x 20 x 120 144,000 132,000 925
60 x 20 x 160 192,000 180,000 1,262
60 x 20 x 200 240,000 228,000 1,598

1The entire volume cannot be filled with silage; the front surface is assumed to have a 45-degree slope.

2Based on dry matter densities of 14 lb/cu ft for corn silage, which is representative of good bunker silo management (i.e., adequate packing).

Source: Ishler et al., Pennsylvania State University, 1993.

 

Appendix Table 2.  Estimated wet forage capacities of bunker and trench silos containing 35 to 40% dry matter silage.1

Silo capacity (tons)2
Silo length (ft)
Silo depth
and average silage
density
Silo
width (ft)
Silage/
4 inches of
removal (tons)
Per
linear
foot (tons)
60 80 100
8 ft
32 lb/cu ft (density ranges from 30 to 36 lb/cu ft)
20 0.85 2.56 125 173 221
24 1.02 3.07150 207 265
30 1.28 3.84187 259 331
12 ft
36 lb/cu ft (density ranges from 34 to 38 lb/cu ft)
24 1.73 5.18 249 353 456
36 2.59 7.78 373 529 684
48 3.46 10.37 498 705 912
60 4.32 12.96 622 881 1,140
16 ft
40 lb cu ft (density ranges 37 to 42 lb/cu ft)
36 3.84 11.52 507 737 968
48 5.12 15.36 676 983 1,290
60 6.40 19.20 845 1,229 1,163

1Capacities are dependent on average densities of silage.  Silage density increases with increasing moisture content, shorter cut length, packed silage depth, and degree of packing.

2Capacity is calculated on the assumption that the far end at the silo is vertical and the front has a 2 to 1 slope, i.e., twice as long as the height of silage in the silo.

Source: Silage Manual, Alberta and Saskatchewan Agriculture.

Appendix Table 3. Approximate tons of dry matter in next four feet of silage in top-unloading upright silos during feedout.

  ------------------------------Silage diameter (ft)-----------------------
Depth of silage
already unloaded
12 14 16 18 20 24 28 30
0 2 2 3 4 5 7 9 10
4 2 3 4 5 6 8 11 13
8 2 3 4 5 7 10 13 15
12 3 4 5 6 8 11 15 17
16 3 4 5 7 9 12 16 18
20 3 5 6 7 10 14 18 22
24 4 5 7 9 11 15 21 23
28 4 5 7 9 11 16 22 26
32 5 6 8 10 12 17 23 27
36 5 6 8 10 12 18 23 27
40   7 8 10 13 19 27 30
44   7 8 11 13 20 27 31
48   7 9 12 13 20 27 31
52   7 9 12 14 21 27 33
56 7 10 12 15 21 28 33
60   7   13 15 21 31 34
64       13 16 21 30 34
68           21 30 33
72           21 27 31
76           21 28 31

 

Appendix Table 4. Corn silage energy estimates from fiber anlysis.

Prediction equations
Midwest: %TDN = 87.84 - (0.70 x ADF)
New Hampshire: NEL = 0.996 - (0.0126 x ADF)
New York: %TDN = 31.4 + (53.1 x NEL)
               NEL (mcal/lb) = 0.94 - (0.008 x ADF)
Pennsylvania:  %TDN = 31.4 + (53.1 x NEL)
                    NEL (mcal/lb) = 1.044 - (0.0124 x ADF)
Spartan Balancer: NEL = 1.02 - (0.0128 x ADF)

Further Reading

Wisconsin

Note: Web resources for Wisconsin are maintained by Mike Rankin and Team Forage. Please see http://www.uwex.edu/ces/crops/uwforage/Silage.htm for an up-to-date listing.

Corn Silage Pricing Decision Aid
This spreadsheet developed by Ryan Sterry, Polk Co. Agriculture Agent; Lee Milligan, St. Croix Co. Agriculture Agent; and Joe Lauer, UW-Extension Corn Agronomist, helps to determine a price for standing and harvested corn silage.

Corn silage enterprise dollars
From Greg Hadley, UW Extension Farm Financial Management Specialist.  This spreadsheet is designed to allow the user to compare last year's enterprise budget (Worksheet 3) and cost of production (Worksheet 4) to the typical WI and MN farm that contributes their records to FinBin (http://www.finbin.umn.edu/).

Corn Silage Adjusted Dry Matter Pricing Program
From Greg Hadley, UW Extension Farm Financial Management Specialist.  This spreadsheet helps to determine the moistue-adjusted price for corn silage based on a set price at a given moisture concentration.

Dairy Feed:  A New Cash Crop
A presentation given by Mike Rankin, Fond du Lac Co. UW-Extension Crops and Soils Agent, at the 2006 Fertilizer, Ag Lime, and Pest Management Conference.

 Economics of Alfalfa and Corn Silage Rotations
This paper, written by Extension Educator Ken Barnett, looks at the economics of various rotation options using alfalfa and corn silage.

Buying and Selling Corn Silage: What's a fair price?
This paper, written by Greg Blonde, Waupaca Co. Agricultural Agent, evaluates several methods to value corn silage.

Pricing Drought Stressed Corn Silage
by Dr. Joe Lauer, UW Extension Corn Agronomist et al.

Negotiating the Value of Immature Corn Silage
by Dr. Joe Lauer, Wisconsin Crop Manager Article,  September, 2004

Calculating Grain and Silage Yields for Loan Deficiency Payments
by Dr. Joe Lauer, Wisconsin Crop Manager Article,  October, 1999

Calculating the value of corn silage
by Dr. Joe Lauer, Wisconsin Crop Manager Article, September, 1994

Contracting Corn Silage Acres  
Mike Rankin, Crops and Soils Agent, UW-Extension-Fond du Lac County
Includes a table for pricing corn silage at various moisture levels.

Choosing Between Alfalfa and Corn Silage ...or when do you trade Medicago for Maize?
Mike Rankin, Crops and Soils Agent, UW-Extension-Fond du Lac County

Estimate the Value of Standing Corn for Corn Silage
Gary Frank, Farm Management Specialist, UW-Madison, Center for Dairy Profitability

Equipment Sharing and Other Joint Ventures
Gary Frank, Farm Management Specialist, UW-Madison, Center for Dairy Profitability

Corn Silage vs. Alfalfa Spreadsheet
This spreadsheet, developed by Monroe County Agriculture Agent, Jim Leverich, offers dairymen the opportunity to compare expense and income for producing and feeding different amounts of corn silage and alfalfa.


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