Pricing Corn Silage Update (August 2015)

1. Estimate grain yield using the Thomison (2013) method (see link below) or other approach.

2. On average, in the lower Midwest, you get about 1 ton of corn silage (35% dry matter (DM)) per 7.5 to 8 bushels of corn.  Therefore, if the estimated grain yield is140 bu/acre, expected silage yield would be 140/8 = 17.5 tons.

3. However, under abnormal growing conditions this may underestimate forage yield (i.e., there will be less than 8 bu of grain per ton). See methods in the corn silage pricing article (link below.)

4. Based on nutrient values, corn silage is currently worth $40 to $45/ton (at 35% DM) as it comes out of the silo.  You need to deduct shrink and storage (estimated at $9/ton) and cost of harvest and filling (estimated at $6.90/ton – chop, haul and fill for a bunker silo, see Ohio Custom Rates link below). This means the maximum a dairy farmer should pay for standing corn is ~$24.10/ton. However, the big assumption is that the nutritional value of the standing crop is equal to normal corn silage. If grain yield is lower than normal relative to forage yield (the silage will have less starch and more fiber than normal corn silage), the value has to be discounted additionally.

5. Finally, the buyer is assuming both harvest risk and fermentation risk (will the stuff ferment well?)  This risk has a price although it is hard to calculate. Basically, an additional discount should be applied to the standing field price.  See the standing corn pricing articles.

NOTE: These discounts assume the corn silage is chopped at the correct DM. If it is harvested at the incorrect DM (either too wet or too dry), the value of the silage is lower.

References

Estimating yield: 

http://corn.osu.edu/newsletters/2013/c.o.r.n.-newsletter-2013-25/estimating-corn-yields-prior-to-harvest           

Corn silage pricing articles (look under main heading “Forages”):

http://dairy.osu.edu/resource/OSU%20Dairy%20Pubs.html   

Pricing Standing Corn for Silage Harvest – 2014

http://ohioagmanager.osu.edu/category/financial-management/      

Ohio Farm Custom Rates 2014:

http://aede.osu.edu/sites/aede/files/publication_files/Ohio%20Farm%20Custom%20Rates%202014_0.pdf          

Crop Observation and Recommendation Network

C.O.R.N. Newsletter is a summary of crop observations, related information, and appropriate recommendations for Ohio crop producers and industry. C.O.R.N. Newsletter is produced by the Ohio State University Extension Agronomy Team, state specialists at The Ohio State University and the Ohio Agricultural Research and Development Center (OARDC). C.O.R.N. Newsletter questions are directed to Extension and OARDC state specialists and associates at Ohio State.