i
F Hi
A
MANAGEMENT
PRICING CORN
SILAGE IN
THE FIELD
Roland Freund
Multicounty Farm
Management Agent
Each year at this time we have
many farmers with dairy or beef
cattle to feed who are short of for
age. At the same time, their neigh
boring crop farmers have com
fields which they are willing to sell
as silage. If they can agree upon a
price that is fair, then trading com
silage can be a good deal for both
parties.
This is especially true in a year
when early frost could threaten
grain yields in com fields. To anal
yze such a situation it is necessary
to look at the transaction from the
viewpoints of both the com grower
and the cattleman.
Corn Grower’s
Perspective
Before com growers 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.
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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 com
growers to determine the gross
income potential for com as grain.
But this is not what the grain is
worth when it’s standing in the
Held. Harvest cost, drying, and
hauling must all be deducted first
to give the net income from grain.
This is the minimum which com
growers could accept. If com
growers can get more than grain
income by selling it in another
form, that alternative may be a bet
ter deal for them.
Cattleman’s
Perspective
Buyers of a com field need to
know how much feed and the value
of the feed they are getting. Corn
silage yield in an even stand can be
measured by sampling techniques.
With uneven fields or 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 maller% (D.M.%)
and pay for dry matter tons than to
try to estimate 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 filled struc
ture, 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 ear com and 4 hun
dredweight of fibre equivalent to a
fair quality grass hay. This means
that in one D.M. ton of com silage
there is approximately 0.57 tons of
ear com and 0.57 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; harvest
ing, hauling, and ensiling. In addi
tion, there are ensiling losses and
quality adjustments which need to
be considered. The resulting value
is the maximum price that the cat
tleman should pay.
Buyer Beware!
Recognize that there is usually a
big difference between minimum
and maximum price in such a deal.
Careful calculations and honest
negotiations should ensure that a
price is struck which is advanta
geous 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 county extension office and
request that your figures be run
through the “Pricing Com Silage”
program.
Lancaster Farming, Saturday. September 5. 1992-Al7
NAJ -Asks For Hearing
REYNOLDSBURG, Ohio
National All-Jersey Inc. (NAJ), a
national dairy farmer organiza
tion, has requested USDA to hold
a public hearing to consider a
multiple component pricing prop
osal for the Chicago Regional,
lowa, and Upper Midwest federal
order.
The request for the hearing is
supported by Alto Dairy Coopera
tive, First District Association,
Lakeshore Federation, Land
O’Lakes, Swiss Valley Farms,
Tri-State Cooperative, and Wis
consin Dairies. These organiza
uons represent a substantial prop
ortion of producers in the three
federal orders.
The proposal for multiple com
ponent pricing (MCP) in these
orders prices producer milk on the
basis of butterfat, protein, and
other solids content. Under the
plan, handlers purchasing milk for
Class I use will continue to pay for
milk on a fat and skim basis. Milk
used for Class II and Class 111 pur
poses is priced on a component
basis.
There are five key features to
Providing that the information
supplied is reasonably accurate,
the printout will give both parties
the information which they need to
negotiate a com silage deal.
Example
Area of field- 45 acres
Shelled Com yield- 117 bu
Silage fills 24x80 silo.
294 D.M.T.
Shelled com harvest price
s2.2o/bu.
Ear com harvest price- S7O7T,
Fair grass hay- $6O/T.
Corngrower’s Calculations
Grain gross sales-
117x2.20=5257
the MOP plan being proposed.
First, the basic formula price
(currently the M-W) will not
change.
Second, as noted above, three
components are priced: butterfat,
protein, and solids-not-fal other
than protein (other solids).
Third, the butterfat and protein
prices arc determined from pro
duct prices for butler and cheese,
respectively.
The other solids price is
residual.
Fourth, component prices are
announced on a per pound basis,
rather than as differentials. And,
fifth, milk used in Class I will con
tinue to be priced on a fat and
skim basis.
In comparison to muluple com
ponent pricing plans currently in
use, this plan incorporates several
innovations in pricing. It prices
not just two, but three milk com
ponents of value.
The protein price is derived
from the cheese market and it is
not a residual. The protein price is
not a function of the average pro
tein content of milk in the market.
Harvesting cost-
Grain haul-
Drying charge-
Total deductions-
Potential income from
gram
Stover value-
Comgrower’s value per
acre-
Cattleman’s Calculations
Yield = 294
45 = 6.5 D.M.T./AC.
0.57 Tons Earcom @ $75
= $42.75
0.57 Tons Grasshay @ $6O
= $34.20
Feedvalue/Acre = $6.5x77
= $5OO
Harvest cost- $5O
Hauling cost- $25
Ensiling cost- $lO
Storage loss (10%) $5O
Total costs, losses $135
Cattleman’s maximum value
$365 per acre
At various moisture levels this is
equivalent to a price per wet ton;
60%- $22.50
65%- $20.00
70%- $16.85
and
75%- $14.00
$23
$lO
$29
$62
$195
$33
$228