Pricing Drought Damaged Corn for Silage

Corn that has suffered severe drought damage can be harvested as silage instead of as grain. This option is dependent upon proximity to livestock operations, especially beef and dairy operations.  Drought stressed corn silage can still have significant feed value if harvested at the right stage and stored correctly.  This article will discuss several methods to calculate a value of silage coming out of the field.  

Before any harvesting activities take place, remember to contact your crop insurance adjustor to view and release the crop. 

Grain producers may be willing to sell the corn standing in the field, to be harvested by the livestock producer or a custom operator.  The buyer and the seller must agree on a selling price.  The seller needs to receive a price that would give as good a return as could be received from harvesting the corn as grain given its harvest condition.  The buyer would need to pay a price that will not exceed the feeding value of the corn crop harvested.  The price can be negotiated within the range of those two values. 

If the crop is sold after being harvested and transported, those costs must be added to that value.  The costs are typically $5 to $10 per ton, depending on whether it is done by a custom operator or the buyer, and the distance it is hauled.  A buyer would only consider the variable costs for harvesting and hauling, whereas a custom operator would need to recover fixed costs, as well. 

An electronic spreadsheet for estimating a value for corn silage, for both the buyer and the seller, is available at the Ag Decision Maker website: www.extension.iastate.edu/agdm.   This spreadsheet includes examples for pricing corn silage in typical and drought production scenarios.  

Another way of pricing corn silage is using a multiplier. One ton of normal, mature standing corn silage at 60% to 70% moisture can be valued at about 7 times the price of a bushel of corn. For a $6.00 corn price, a ton of silage would be worth about $42 per ton.  This price does not including harvest, hauling, or storage cost. 

Drought stressed corn may have only 5 bushels of grain per ton of silage instead of the normal 6 to 7 bushels.  However, the stalks will contain more sugar and comparative feed value should be assessed.  For silage with little grain content, a factor of 5 times the price of corn or 40% times the price of hay can be used. 

Other methods can be used to value corn silage that base the price on local markets or nutrient composition. Market value can be used if there is a local market for corn silage. Nutrient valuation based pricing not only takes into consideration grain-to-forage ratio and dry matter percent of corn silage, but can also include starch, NDF digestibility, and other nutrient component valuations in the price. There is no one correct method to valuing corn silage, but both the buyer and seller must come to an agreement on the method to use and a fair price. 

Iowa State University Extension specialists have compiled this list of resources to help you with drought-related decisions including calculations to estimate silage yield and tips on testing silage moisture. Visit www.extension.iastate.edu  or contact your county ISU Extension office for more information.