Corn silage pricing considerations

Randall Greenfield, Vita Plus Published 8:33 a.m. CT July 22, 2019
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Corn silage is one of the easier forage values to calculate because its value is based on
corn grain, which is regularly traded on the market. (Photo: Carole Curtis file photo)

I often get requests to help assign fair prices for forages to be sold or bought by dairy
producers. Corn silage is one of the easier forage values to calculate because its value is
based on corn grain, which is regularly traded on the market.

The old thumb rules for pricing corn silage are still used extensively:

 For fermented, shrunk and stored corn silage, multiply the price of corn by a
factor of 10 to get a price per wet ton.

 For a crop of corn silage still standing in the field, multiply the price of corn by
a factor of 7 to 8 to get a price per wet ton.

Both these thumb rules assume a dry matter (DM) content of 35% (65% moisture). The
price of corn may take more thought than these simple formulas imply. Whose price of
corn will you use? The seller’s or the buyer’s?

While these rules are a quick and easy way to come up with a price, a more thorough
approach might make sense for your situation. The University of Wisconsin
Extension has an excellent spreadsheet that compares the value of a corn crop from both
the buyer’s and seller’s perspective, using grain production and sales as the alternative
to harvesting as silage.

Because it’s more accurate, the spreadsheet requires estimates of the actual costs of corn
production and harvest. I suggest using the midpoint of the two resulting values as the
selling price.

Here are several other considerations to keep in mind when pricing forages:

Moisture
The thumb rules assume 35% DM, and the UW spreadsheet asks for the expected DM
of the silage. This can easily be adjusted for the actual moisture by a simple conversion.
The buyer should not pay for more water. As the moisture content of the silage
increases, it contains less DM, so the price per ton goes down. Conversely, the drier the
silage, the more DM in a ton of silage, so the price should go up.

As a silage gets drier, other things can change. Most notably, fiber digestibility and
starch levels decrease. This decreases the amount of energy that the cows will be able
to utilize from the silage. A cap on DM content to allow for price adjustments may make
sense, especially if it’s a standing crop being sold and the seller has control of the
harvest timing.

Starch
Corn grain makes up a significant portion of the crop’s mass and can carry an even
greater portion of the value. The starch content of the silage is a major determinant of
its energy content. While the price of corn silage is not often adjusted for its starch
content, it should at least be considered, especially in crops that have had major
stressors.

Fiber digestibility/BMR
The other major portion of the crop that determines its value is the fiber. The extent to
which the fiber is digestible by the cow ends up being a large determinant of the silage’s
ultimate value to the buyer. Again, the price of corn silage isn’t usually adjusted for
fiber digestibility, except for brown midrib (BMR) silage. BMR corn silage contains
less lignin (an indigestible fiber component) than conventional hybrids and has some of
the highest fiber digestibility values available to us today. These hybrids do carry more
cost because of higher seed cost, agronomic risks and lower yields. The seller will need
a higher price to justify growing BMR corn for silage. The higher cost of BMR silage
should be balanced by better cow performance on the buyer side.

Shrink
Be sure it’s understood which party is carrying the cost of fermentation shrink, which
can be an 8% to 10% loss or more. If the crop is sold standing in the field, the buyer
will incur the shrink, as the tons being weighed are fresh and unshrunk. If it’s being sold
out of storage, the shrink was incurred by the seller.

Weights
The best method to determine the amount of silage is to scale each load being sold. This
is not always possible. An alternative is to weigh and count several representative loads.

Finally, almost any selling arrangement can be successful from both the buyer’s and
seller’s perspectives as long as the method of pricing is discussed and understood by
both parties well in advance of the actual sale.
Randall Greenfield (Photo: Vita Plus)

Greenfield is a dairy specialist with Vita Plus