A24- Lancaster Farming, Saturday, August 20, 1988
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MANAGEMENT
BY ROLAND P. FREUND
Regional Farm Management
Agent
Each year atBHHHHI
this time we have^^HHH
many farmers
with dairy orl
beef cattle to
feed who are
short of forage.
At the same time
their neighboring crop farmers
have com fields which they are
willing to sell for silage. If both
parties can agree upon a price that
is fair, then trading com silage can
be a good deal for both of them.
This is especially true in a year
when drought results in shortage of
forage and poor grain yield in com
fields. To analyze such a situation
it is necessary to look at the trans
action from the view points of both
the comgrower and the cattleman.
Corngrower’s Perspective
Before comgrowers can decide
what they must get if they sell com
as silage, they need to work out
what the field would give them if
they sell it as grain. They must
know GRAIN YIELD potential
and the PRICE they can expect at
harvest time. Grain yield can be
determined by sampling and yield
checking the field. Price can be
established by what the mill is
offering for contract deliveries at
normal harvest time. These two
facts enable comgrowers to deter
mine the gross income potential
for com as grain.
But this is NOT what the grain is
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worth when it’s standing in the
field. HARVEST cost, DRYING,
and HAULING must all be
deducted first to give the net
income from grain. This then is the
MINIMUM which graingrowers
should accept. If they can get more
than this by selling it elsewhere,
that alternative may be a better
deal for them.
Cattlemen’s Perspective
Buyers of a cornfield need to
know how much feed, and the val
ue of the feed that they are getting.
CORN SILAGE YIELD in an
even stand can be measured by
sampling techniques. With uneven
fields in droughty conditions this is
a guessing game. Because there is
about twice as much water as there
is dry matter in silage, it’s more
important to know the DRY
MATTER% (D.M.%) and pay for
dry matter tons than to try to esti
mate moisture levels and count
wagon loads. The simplest and
most accurate system to determine
yield is to start with an empty silo, ‘
measure the level of silage in the
structure and use silo tables to
arrive at the DRY MATTER
TONS in the silo. Take care to
check if the tables are for once only
filling, for settled height, or for
settled and refilled capacity.
When cattlemen are feeding
normal well-eared 35% D.M. com
silage (65% moisture), in each ton
the cattle are eating about 4 hun
dredweight of earcom and 4
hndredweight of fibre equivalent
to a fair quality grass hay. This
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GATES 8 .
Hot Dip Galvanized ’ •
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BALE BAGS
** Now In Stock!
58”x56”x164”
means that in one D.M. Ton of
com silage there is approximately
.57 tons of ear com and .57 tons of
hay. So, the PRICE OF EAR
CORN and the PRICE OF GRASS
HAY can be used to calculate com
silage value.
The cattleman is going to have
expenses handling this silage
which must be deducted:
HARVESTING. HAULING, and
ENSILING. In addition there are
ENSILING LOSSES and QUAL
ITY adjustments which need to be
considered. The resulting value is
the MAXIMUM price that the cat
deman should pay.
Example
Area of field- 45 acres
Shelled com yield- 37 bu.
Silage fills 20x50 silo, 118
D.M.T.
Shelled com price- $3.20/bu.
Ear com price- SlOO/T.
Fair grass hay- $7O/T.
Corngrower’s calculations
Grain gross income- 37x3.20 =
$llB
Harvesting cost- $23
Grain haul- 2
Drying charge- 9
Total deductions 34
Potential income from grain $B4
Stover value- 13
Comgrower’s minimum value/
ac. $97
Cattleman’s calculations
Yield » 118/45 » 2.62
D.M.T./Ac.
0.57 Tons Earcom @$ 100=557
0.57 Tons Grasshay @s7o *
$4O
Feedvaluc/D.M.T. Comsilage =
$97
Feedvalue/Acre = 2.62x97 =
$254
Harvest cost- $45
Hauling cost- IS
Ensiling cost- 9
Storage loss (10%) 25
Total costs, losses $94
Cattleman’s maximum value
$l6O per acre
At various moisture levels this is
equivalent to a price per wet ton:
60%- $25.65%- $22,70%- $l9,
and 75%- $l6.
Buyer beware!
Recognize that there is usually a
big difference between minimum
and maximum price in such a deal.
Careful calculations should ensure
that a price is struck which is
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advantageous to both parties.
To assist in these computations
Penn State Extension has a compu
ter template in each extension
office. Do not hesitate to contact
your office and request that your
Drought Relief Bill
(Continued from Pago A 1)
bied for a support price increase of
$1 during congressional hearings
on the relief bill. But federation
officials say they aren’t disap
pointed at the eventual result
“We’re pleased that in a very
budget-minded Congress, we got
what we got,” said Mike Brown, a
NMPF economist
Earlier in the year, before
drought relief became a major
issue, the federation launched a
campaign to eliminate the possibil
ity of a 50-cent support price cut in
which it enlisted the support of
member cooperatives and farmers
throughout die country. The new -
legislation effectively ends that
campaign as well as lobbying
efforts for another whole herd buy
out or milk diversion program to
reduce production below the
5-billion-pound trigger.
Currentiy, farm milk prices are
on the rise as seasonal factors and
the drought tighten the supply
demand equation. The Minnesota-
Wisconsin [nice the benchmark
for setting minimum prices in the
nationwide federal order system --
climbed 18 cents in July, to $10.52
a hundredweight. Some analysts
predict it will reach $11.20 before
the end of the year.
The M-W will fall, however,
during the next spring flush. The
temporary increase should keep
milk prices 25-35 cents higher than
they would otherwise be during
this period. Brown said.
The bottom line? Maintaining
current profit margins, if any,
would appear to be the best most
producers can manage over the
next year as higher than antici
pated milk prices are more than
offset by higher feed costs. In July,
soybean meal prices as high as
$360 a ton helped push the milk
feed price ration down to a national
average of 1.15, well below the
f CORDON ’•
. VAPONA INSECTICIDE
• Reg. $5.59/Gal.
NOW $4.88/Gal.
• NEW BACK-RUBBER
OILER
Reg. $6.79/Gal.
. AMINE 400- 2,4-D NOW f^p /Gal
WEED KILLER Reg. $11.59/Gal NOW $9.88/Gal.
Good For Pastures, Lawns & Postcmcrgcnce Planting
figures be run through the “Pricing'
Com Silage” program. Providing
the information provided is reaso
nably accurate, the printout will
give both parties the information
which they need to negotiate a
deal.
level thought to be profitable for
milk production. The govern
ment’s August crop report, which
estimated a com crop 35 percent
below,last year’s 7.3 billion
bushels and a soybean crop 23 per
cent less, promises prices will
remain high through at least the
first half of 1989, Brown said.
Obviously, the impact of the
drought will vary among produc
ers according to the amount of feed
they buy and the extent of crop los
ses they experience. According to
the federation, the “average”
60-cow herd owner may pay as
much as $15,000 more for feed
next year while receiving only
about $5,000 in government disas
ter benefits.
Those benefits will be available
only to livestock producers who
grow their own feed. A provision
that would have extended assis
tance to purchased feed as well did
not make it into the final version of
the drought bill.
The bill does contain a broad
program of assistance to crop far
mers. Producers whose losses
exceed 35 percent of their average
yields are eligible for payments --
in cash -- that will make up 65 per
cent of the value of these losses.
Losses in excess of 75 percent will
receive 90 percent compensation.
Other provisions include:
~ a revamped assistance prog
ram for livestock producers who
suffer crop losses. This will super
cede the Emergency Feed Program
and Emergency Feed Assistance
Program already on the books.
- a package of credit measures
for farmers, banks and rural
businesses. This includes extend
ing eligibility for low-interest
emergency loans from the Farmers
Home Administration to farmers
without crop insurance coverage.
- assistance for tree growers
and landowners who preserve
wildlife habitat.
GORDON’S
CHEMICALS
ACE
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