Tuesday, July 10, 2012

Pricing Drought Stressed Corn Silage

Arriving at a fair and equitable price for corn silage is difficult due to the number of factors involved that are dynamic and biologically variable. Some factors include production costs, grain price, harvesting costs, costs of handling, hauling and storage of forage, grain drying costs, fertility and organic matter value of stover, and forage quality (especially starch content and neutral detergent fiber digestibility-NDFD). The amount of moisture has a major influence on its feed value and needs to be considered to accurately determine fair silage prices. Some growers will want to calculate the price based on corn grain yield (as the alternative harvestable crop) and some dairymen will want to calculate the price based on alternative forages (primarily alfalfa as the alternative forage source). In either case the final price is affected by supply and demand within a region. Before any decision, consult an insurance agent for additional impact on indemnity payments for sale of silage versus grain.

For a worksheet and guidelines to assist determining pricing solutions for drought affected corn silage, click here

Also, a Corn Silage Pricing Decision Aid (written as an Excel spreadsheet decision support system) can help arrive at an equitable price between buyers and sellers.

Further Reading

Hesterman, O.B., and  P. R. Carter. 1990.  Utilizing Drought-Damaged Corn. National Corn Handbook, NCH-58.

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