Corn silage is commonly priced per ton standing in the field at seven to eight times the market price per bushel of corn. Kristen Schulte, Iowa State University extension farm management field specialist, says selling the corn based on its grain value and exchanging the non-grain bio-mass for dairy manure produced on the buyer’s farm can be mutually beneficial to the buyer and the seller.
“The corn silage seller benefits by selling at adjusted local market price with less labor and without harvest, drying, transportation or storage costs," Schulte said.
She explained that the buyer benefits from the purchase of a high volume, energy-rich feed that has a value per ton of dry matter that is more cost effective than other grain or forage alternatives. “It also provides an opportunity to dispose of excess manure for dairies needing additional land for manure disposal.”
Schulte calculated that the crop producer selling their corn as silage can reduce costs up to $30 an acre over harvesting the crop as grain by not needing to harvest the grain, transport, store and/or dry the corn.
Although the cost of seed, fertilizer, chemicals and miscellaneous expenses such as insurance remain the same if the corn is harvested for silage or grain, the seller would save about half on machinery cost ($110 versus $45) and eliminate the drying cost, calculated at a rate of $45 per acre.
When corn is sold as silage instead of grain the grain farmer loses about $80 per acre in stover nutrient loss (above limited manure application). “However, the use of cover crops and/or timely application of dairy manure bartered in the transaction could reduce this cost,” she said.
Schulte explained that trading corn stover for dairy manure can be a win-win situation. Based on Iowa State University’s 2013 estimated cost of production, the value of the nutrients removed in the corn silage, excluding grain, is about $6 per ton. A ton of dairy manure solids contains 12 pounds nitrogen, 6 pounds phosphorus and 12 pounds potassium.
While harvesting corn silage removes an estimated 193 pounds of nitrogen, 84 pounds of phosphorus and 216 pounds of potassium, application of 14 tons of manure solids meets the phosphorous loss from the silage. An additional commercial fertilizer application of 25 pounds of nitrogen and 48 pounds of phosphorus will meet the nutrients removed with the stover. The cost of the fertilizer is equivalent to the cost of the stover nutrient loss.
She offered the example that at a corn price of $4.50 per bushel and a harvest of 175 bushels an acre, the crop is worth $3.92 per bushel after adjusting for corn harvesting, drying, handling and storage, or $686 per acre. “If re-applying manure was not part of the contract, an additional $144 an acre will be added for the value of the nitrogen, phosphorous and potassium removed with the stover.”
Schulte explained that the percentage of dry matter is important. When priced at the field, if silage at 40 percent moisture is valued at $47 per ton, then silage at 30 percent is valued at $35. “This assures that the grower will receive the same gross payment regardless if harvested at varying moisture levels.”
If basing payment on per ton harvested, Schulte says it is critical to have accurate dry matter testing and yield estimates. “Price adjustments will be needed for corn silage at varying moisture levels,” she said.
Whatever method used, Schulte encouraged both parties to put the agreement in writing to prevent misunderstandings. FG
Kelli Kaderly-Boylen is a freelance writer based in Iowa.
