Do a little Googling on the internet looking for silage price reports, and guess what you’ll find?
Nothing. At least nothing that’s official.
So, in the absence of a reported market price, determining a fair price for corn silage becomes a negotiation between buyer and seller. As in most negotiations, the fair price is what the seller and buyer agree to, but there are many variables to consider in negotiating that price.
The biggest factors in determining price are the feed value of the silage, which is of interest to the buyer, and replacing the potential corn grain value, which is of interest to the seller. The feed value can be determined by the cost of alternative feed; i.e. corn grain and forage or by a feed analysis.
In addition to the corn price and potential corn yield there are other factors to consider. These include moisture and maturity at harvest, additional nutrient removal with silage harvest, alternative forage price and potential harvest and storage losses.
A rule of thumb for pricing is using a factor of 8 times the corn price for standing corn and 10 times the price of corn for harvested silage per ton for typical silage. To help fine-tune pricing, consider using a spreadsheet or silage price calculator which can help take many of those considerations into account.
One such tool is available on the Iowa State Ag Decision Maker website.
The spreadsheet helps determine a minimum price from the view point of the seller and a maximum price for the viewpoint of the buyer. Use the spreadsheet and make the following assumptions for harvesting and storage costs and additional fertilizer costs:
- $35 per acre for grain harvest and $85 per acre for silage harvest
- 5 cents per bushel to handle and store grain and $2.50 per ton to handle and store silage
- 20 cents per bushel drying cost for the corn
- Fertilizer cost for phosphorus and potassium is 35 cents per pound. Forage price for alternative forage is $60 per ton
Then estimating a 180-bushel corn grain yield at $3.75 per bushel or a 23 tons per acre corn silage yield at 35% dry matter, the average of minimum price and maximum price is $30.75 per ton of silage. This is 8.2 times the corn price as unharvested or $36.75 per ton of silage which is 9.8 times the corn price or as a harvested crop.
As a comparison, using the same set of assumptions but a lower estimated 140-bushel corn yield and price of $3.50 per bushel or a lower estimated 18 tons per acre of corn silage yield at 35% dry matter, the average of minimum and maximum price is $28 per ton or 8 times the price of corn as unharvested silage and $35 per ton or 10 times the price of corn as harvested silage.
Source: Iowa State University, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.