Ongoing drought conditions in Nebraska have continued to support hay and forage prices. While eastern parts of the state had a good first cutting of hay, areas further west haven't fared so well. Sandhills meadows will likely on average have more production than last year, but yields will still be below long term averages.
At the same time, nationally a record number of acres were planted to corn in 2013 and the central and eastern Corn Belt have received ample precipitation that has eliminated drought conditions in those regions. December corn futures are currently in the 5.00-per-bushel range and will likely fluctuate through the rest of the summer. These conditions have developed an interesting situation in regards to the price relationship between a bushel of corn and a ton of good quality alfalfa hay in Nebraska.
A historical rule of thumb for pricing corn silage at 65% moisture has been to value it at 8-10 times the price of a bushel of corn. Another common pricing point of reference has been that corn silage is equal to 1/3 the price of alfalfa hay. So what is a fair value for corn silage under current market conditions and how might that price impact the decision on whether to harvest a field for silage or as grain using historic rules of thumb?
Corn - $5.50/bushel Alfalfa Hay - $200/ton
Corn Silage - 9 x $5.50/bushel = $49.50/ton
Corn Silage - 10 X $5.50/bushel = $55.00/ton
Corn Silage - 1/3 X $200/ton = $67.00/ton
175 Bushel Corn at $5.50/bushel = $962.50 per acre
175 bushels of corn per acre should yield approximately 22 ton of silage at 65% moisture.
22 ton of silage per acre at $55.00/ton = $1210 per acre
There are a lot of different factors to consider when evaluating whether to harvest corn for grain or for silage. Both methods of harvest have advantages and disadvantages depending upon operations goals and objectives. Tight forage supplies in many parts of Nebraska combined with current corn market conditions may heighten the attractiveness of harvesting corn for silage this year rather than for grain.
Three webinars addressing the harvest and use of silage in cattle operations will provide additional information on this topic.
Dr. Keith Bolsen, Silage Specialist and Professor Emeritus from Kansas State University, recently recorded a webinar on “Keys for Harvesting and Storing Quality Silage.”
Coming up in August Dr. Galen Erickson, UNL Extension Beef Feedlot Specialist, will present additional webinars titled “Silage Pricing and Nutrition - Economics of use in Forage Fed Cattle” and “Using Elevated Levels of Silage in Finishing Diets and Addressing Shrink.” Please join us live on August 13 and August 20 at 12:30 Central Time to learn more about the use of silage in cattle operations.