Source: Karen Johnson, University of Minnesota Extension - Wright, McLeod and Meeker Counties, ande9495@umn.edu. 320-484-4303
It is the time of year when farmers begin harvesting their corn silage. Depending on your situation, you may be trying to determine what the ideal price for corn silage should be. There are a number of factors to consider when trying to determine that price. Factors include knowledge of the expenses such as the cost of fertilizer and field operations, the moisture and corn content of the silage and markets (grains, straw, and silage). This can make obtaining a fair price hard to come by if you are not aware of the resources around you.
Consider the viewpoint of both the buyer and seller when trying to determine a fair price. The buyer will look at the price in terms of quality vs quantity and harvesting costs. The seller has the viewpoint of the value of the standing corn minus the grain harvest costs.
Generally speaking, there is an old rule of thumb that silage value per ton is 8 to 10 times the price of a bushel of corn. The factor of 8 has typically been used when pricing standing corn silage; the factor of 10 is used when corn silage is already in storage. However, this rule of thumb may need adjusting as the current corn and input prices have changed.
The environment may also play a role in the amount of grain in a silage sample. Testing samples for moisture and feed quality is one way to help decide what the silage is worth and can help eliminate some of the questions around quality. Also, remember that storage and labor costs are tied up in the price of grain. If you are not the one doing the work, make sure to properly adjust the price based on the harvest costs that would have occurred in harvesting the grain.
There are many different ways to price corn silage other than the old rule of thumb. Many of these options are easily found online and free to use. Penn State, Iowa State, and Wisconsin all have their own versions of corn silage pricing calculators and can all be found using a simple internet search. Each one takes a slightly different approach to pricing corn silage, so make sure to experiment with them to decide which one best fits your needs and situation.
Whether you are the buyer or the seller, it is important to do your homework to best determine a price that is fair for both parties. For more information, please feel free to contact Karen Johnson at 320-484-4303 or ande9495@umn.edu.