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How does the cost of Corn Silage measure up?

Ben Hamm, P.Ag.Farm Management Specialist

What we already know…

• Doing your cost of production for your own farm is the starting point for profitability.

• Determining your cost per lb DM will allow you to build an effective marketing plan.

• Each year is different! Profitability and risk is dependent on the relationship between yield/price/costs with your financial situation. (Plan for Prosperity)

Advantages of Corn Silage• Tonnes!!! Excellent energy source• Less land needed • Silage can be harvested in almost any weather conditions • Higher output of nutrients per acre than grain • Can salvage crops damaged by hail, frost and high weed

competition • Large quantities of uniform quality feed can be stored • Handling is mechanized from the field to feed • Control of intake and ability to get mineral into the cows• Free summer

Disadvantages of Corn Silage

• Disadvantages • Requires more labour and equipment • Has an odour that may be offensive if stored

near populated areas • Capital investment required for storage

facilities, forage harvester • Has limited market potential. Long distance

transportation is inefficient because silage is heavy and deteriorates with exposure to air.

Advantages of Baled Silage• Use the same equipment as dry hay• Requires less labour and energy for harvesting compared to

chopped silage system• Requires 1/2 to 1/3 the drying time compared to dry hay

– Only 13 to 20 hours vs 40 or more for dry hay• Permits harvest at optimum stage despite weather• Opportunity to utilize crops that are hard to dry down –

high yielding alfalfa• Less leaf loss – 5% compared to 20 to 30%

– Increased feed value• Less feed loss at feeding due to increase in palatability

Disadvantages• Increased cost due to plastic and wrapper cost• Harder on baler – heavier bales• Hard on loaders and front axels of loader tractors – increased repair

bills??• Bales can spoil if plastic punctured by rodents, wildlife, birds, wind,

and hail• Low moisture forage will not ferment- less than 40% increase risk

of mold• High moisture forage will producer sour silage- greater than 70%• Freezing problems• Have to be used up within 3 days if taken out of plastic• Harder to sell- heavy bales, have to be used up immediately• Shorter storage life compared to chopped silage • Used plastic to deal with

Fertilizer Cost

Without Storage Loss

Without Storage Loss

With Storage Loss

With Storage Loss

Cost of Protein

Cost of TDN

Most importantly balance the ration!

$/lb DM TDN with 20 ton Corn Silage

$/lb DM Protien with 20 ton Corn Silage

2018? Good, Bad or Ugly?

CAUTION:Objects in the Mirror are

Closer Than They Appear!

Price vs Cost - Fertilizer Pricing• Price – How much money do I need to hand

you to buy my fertilizer.• Cost – What did I have to give up to get this

price.• Expense vs. Investment:

• Investment provides a return over what you’ve paid, an expense will not.

• Questions:• Is it really cheaper for you to buy in the fall (cost of

money, bins etc.) than in the spring?• Is it really cheaper to buy from the ‘new’ dealer 20

miles down the road for $5 per tonne less?

Cash Rent Based on Gross Revenue

• Average range of cash rent across western Canada is 18 to 22%of gross revenue.

• But how much is too much???

Breakeven Land Rent Calculation

Gross Revenue- Operating Cost- Equipment Cost- Labour Cost / Owner withdrawal- Storage Cost = Cash for Land Rental

Land Rent Based onInvestment Return on Land Value

(Landowner check & balance)

Land market value $1925 per acrex Long Term Investment Rate (5yr) 2.75 %+ Property taxes $10.00 per acre Total Cash Land Rental $58.00 per acre

Farm Software & Worksheets (Forage)

• http://www.gov.mb.ca/agriculture/business-and-economics/financial-management/farm-software-and-worksheets.html

• Farm Machinery Custom & Rental Rate Guide Calculator - 2016/17

• Standing Hay Cost Calculator • Feedplan• Hay storage cost planner• Hay Production Cost 2018• Silage Production Cost 2018• Pasture Production Cost• Cropland Rental Rate Planner

Obviously you’re telling me…• The more accurate your own numbers,

the greater your chances are for profitability.

• It’s vital to know the risks and rewardsof your forage crop.

• Before seeding, compare forage mixtures for profit probability.

• After seeding, update your actual coststo keep on top of profitability

Questions ?For more informationVisit our website: www.manitoba.ca/agriculture

Follow us on Twitter: @MBGovAg

View our videos on YouTube: www.youtube.com/ManitobaAgriculture

Contact us:Ben Hamm, P.Ag. Roy Arnott, P.Ag.benjamin.hamm@gov.mb.ca roy.Arnott@gov.mb.caVita Ag Office Killarney Ag Office204.392.9350 204.523.6424