Pricing Corn Destined for Feeding as Silage, Snaplage, Earlage or Grain
Grain production regions allow cattle producers to harvest grain crops as grain (dry or high moisture) or green chop to be preserved as silage for cattle feeding (feed crop). Corn grain production is particularly well suited for this purpose. Harvesting the ears and shank (earlage) or husk, grain, cob, and shank (snaplage) represent options intermediate to harvesting grain or chopping the whole plant.
The energy content of feeds from harvesting the whole corn plant, ear, and husks, ear, husks and shank, or grain at high moisture to preserve through fermentation depends on the forage: grain ratio of the crop. Generally, as determined from feed analysis, energy concentration is lower for silage, intermediate for snaplage and earlage, and highest for high-moisture corn grain. Concentrations of crude protein change relatively little between these crops; yet the proportion of nitrogen content represented by true protein is greater from the dry grain and lower from the fermented crops (silage, earlage, snaplage or high-moisture corn).
The energy content of the crop (feed value), costs associated with planting, cultivating, and harvesting the crop, or market price of corn grain complicate pricing the feed crop from corn acres.
From a corn-grower perspective, pricing the corn plant, portion thereof, or grain should reflect the gross value (market price) of the dry corn grain contained in it. Although this approach neglects the costs of producing corn grain, it is a starting point.
From a cattle feeder perspective, pricing the corn plant, portion thereof, or grain should 1) reflect costs of producing the feed crop up to harvest and its preservation or 2) be based on the feed crop energy value as determined from chemical analysis. The latter uses dry corn grain as a reference value to determine the opportunity price of the feed crop based on the energy content and price of dry corn grain. Most computer formulation programs and all nutrition consultants associated with cattle feedlots regularly determine the opportunity price of corn harvested as one of these feed crops.
For family- or corporate-run operations or for cattle feeders wishing to purchase corn standing in the field to harvest as one of these crops requires negotiation between seller and buyer. In this scenario, a corn grower, or the agriculture division of a family- (or corporate-) run operation might wish to price corn standing in the field based on the crop's gross value or production costs.
Therefore, we developed an Excel-based calculator (UNL Corn Crop Harvest for Feed Calculator) to determine 1) the value of the corn crop based on projected or actual bushels of corn contained in the crop or 2) the worth of the corn crop based on projected or actual costs of production. The calculator permits the user to include or exclude harvest and post-harvest costs to determine standing or harvested crop value (price) and worth (cost). Situations where harvest costs may be excluded are when standing corn is priced for a buyer to harvest or to have corn harvested as one of the alternative crops. Alternatively, the user can include all costs associated with harvest as may be the case in a family- or corporate-run livestock-crop operation.
For continuity, cost items listed in the calculator (leftmost column) reflect those commonly reported in state farm business management reports. Reference examples of cost items were drawn from the 2022 Minnesota or Nebraska Farm Business Management Association reports and include corn grain raised by all farms reporting or those with owned or rented acres reporting (middle column). Government payments were excluded from the reference value or the calculator. Sections specific to costs associated with irrigation were provided for use on irrigated corn acres. The calculator itself is in the rightmost column. All calculations are in protected cells. Therefore, the user can only edit cells shaded in white (black font).
The reference column is editable to change four items to be included as reference customizing the user’s experience:
1) The moisture content of corn grain (drop-down menu),
2) yield (bushels) per acre,
3) acres under consideration,
4) a reference corn grain price is generally an elevator bid where corn grain would be trucked to sell.
The calculator column is editable to change:
1) State or region (self-reference),
2) crop year (self-reference),
3) feed crop to price (silage, earlage, high-moisture grain, or grain).
Choosing a feed crop with the drop-down menu does not automatically select crop moisture or corn grain content in the feed crop (choosing grain as the feed crop assumes dry corn grain harvest and changes the units to bushels). The user must choose expected or actual crop moisture and corn grain content (dry matter basis). Common moisture content for silage, earlage or snaplage and high-moisture corn is 65%, 35% and 25%, respectively. Grain content in silage, and earlage or snaplage ranges from 40% to 50%, 70% to 80%, respectively.
The user can then enter cost items associated with production of the feed crop using items listed from the reference chosen (left column) or using their own estimates or actual values. Costs associated with harvest and post-harvest handling of the feed crop should be entered if the total cost of the crop is to be determined or left blank if a buyer and seller are negotiating standing crop price. The Nebraska Farm Custom Rates hosted by UNL Center for Ag Profitability (Nebraska Farm Custom Rates Report | Center for Agricultural Profitability (unl.edu)) provides state-wide estimates of costs of harvesting and handling corn silage or earlage.
Entering the actual or expected corn grain crop moisture under the reference column is needed to determine if the elevator bid applies or it must be adjusted for moisture content of grain. The reference example in the calculator was set at 15.5% moisture (trade level) so that the weight of a bushel of grain is at 56 lb. In the example, the elevator bid, and market value (gold-shaded cell) are the same ($5.25/bu). This value becomes the reference price to appraise the value of the feed crop.
The example contained as default in the calculator is for earlage (drop-down menu) harvested in 2023, containing 33% moisture and 80% corn grain in the crop. Using the reference price of $5.25 for corn grain returns an equivalent value of $118.93/ton to compensate the corn grower for the corn grain contained in the earlage crop. An additional statistic is at the end of this section: bushels of corn contained in each ton of feed crop harvested.
For any individual or corporation wishing to price standing corn relative to a reference corn grain price, this is all the information needed to determine the value of the feed crop derived from corn acres. If the example above represented reality, a corn grower willing to accept $5.25/bu for corn grain yielding 196 bushels/acre would receive an equivalent gross return from permitting a cattle feeder to harvest corn as earlage for $118.93/ton. Gross return per acre is listed under row 15 at $1,029 and is equivalent regardless of crop choice.
Alternatively, if a cattle feeder or corn grower wishes to consider the costs of producing corn grain or its alternative feed crop, either using the values provided as reference or entering values obtained from the operation, direct expenses and overhead expenses, including those associated with harvesting corn as grain or by chopping the whole plant or harvesting material for earlage or snaplage will permit determination of the crop’s worth (cost per ton associated with production).
In the example included with the spreadsheet, we used the reference values from a NE corn grain operation on rented acres. Corn grain from the reference example is worth $5.36/bu while earlage derived from that example would need to be priced at $130.62/ton to break even with costs of production.
Using these relationships two estimators were derived: multiplying bushel yield per acre of corn grain by 5% (0.05) yields an approximation to the tons of earlage or snaplage harvest expected. Alternatively, dividing the bushel yield per acre of corn grain by 8 returns an approximate value of the tons of silage harvest expected.
Interviews with the authors of BeefWatch newsletter articles become available throughout the month of publication and are accessible at https://go.unl.edu/podcast. You can subscribe to the BeefWatch newsletter here: http://go.unl.edu/Beefwatch_subscribe.