MU guide looks at reconsidering silage pricing

Drought throughout much of Missouri has renewed interest in how to price silage. An updated University of Missouri Extension publication looks at silage costs and revenues.

Given current corn and input prices, MU Extension economists Ray Massey and Joe Horner say that farmers should reconsider long-standing rules of thumb for pricing. Massey and Horner are the authors of "Pricing Corn Silage." The newly updated guide is available for free download at extension.missouri.edu/g4591.

Silage—the harvest of corn plants at 60%-70% of whole plant moisture when kernels are at half milk line to black layer—can be made from corn planted for silage or as a grain crop. Silage's value increases in times of drought and anticipated reduced grain yields.

Massey says the guide is intended to help farmers estimate the breakeven price to justify harvesting a corn crop as silage rather than grain. The Silage Cost Analyzer, an accompanying Excel spreadsheet, lets farmers input farm-specific information to estimate breakeven prices.

Typically, farmers price silage using the rule of thumb that silage value per ton is 8-10 times the price of a bushel of corn. A factor of eight to nine is used to price silage in the field; a factor of nine to 10 is used for pricing it in storage. A higher factor is used for lower-priced corn and a lower factor for higher-priced corn.

This rule of thumb needs to be reconsidered in light of current corn and input prices, Massey says. Currently, silage priced in the field may be closer to seven times the price of a bushel of corn.

In addition, the rule of thumb may err in valuing silage because it does not consider the dry matter percentage of the silage, which has a large effect on the value of silage to livestock producers considering the purchase.

The publication also looks at drawbacks of harvesting silage rather than grain. One often overlooked cost of silage is the removal of phosphorus and potassium from the soil. If soils are low in these nutrients, this can be an additional expense. In contrast, silage can be used in intensive manure-spreading areas to purposely remove crop nutrients from soil.

Download the guide and spreadsheet at extension.missouri.edu/g4591.