After light crops of first-cut silage and many livestock farms buffer-feeding cows with fodder to stretch grazing rotations, there are likely to be more farmers looking to purchase additional forage ahead of the winter.
Therefore, where farms are in a fortunate position to have surplus grass this summer, this could be a valuable commodity that can be cashed in later in the season.
Every autumn, there are multiple ads selling silage at a range of prices. In some cases, there will be silage sold below the cost of production
When it comes to selling silage, how many farmers take the time to work out what it costs to make?
Every autumn, there are multiple ads selling silage at a range of prices. In some cases, there will be silage sold below the cost of production.
The problem with costing out silage production is that the input costs are spread over several stages, some of which are rarely considered.
Inputs
For instance, fertiliser is often purchased on credit, then paid for later in the year along with fertiliser used for grazing ground.
Silage ground is often sprayed to control weeds before cutting, yet this is rarely factored in to costs. Diesel and time taken for slurry and nitrogen applications, as well as rolling swards, are also rarely considered as a cost.
If all these factors were paid for in one cheque, it would give many farmers a different outlook on silage production
Land rent also needs to be included. After the contractor’s fee, the price of a plastic cover is often overlooked.
If all these factors were paid for in one cheque, it would give many farmers a different outlook on silage production, especially when it comes to selling forage.
Cost effective
That said, silage diets are the backbone of winter feeding programmes on Irish cattle farms. While it can be expensive to make, good quality silage is still a cheaper feed compared to purchased concentrate.
Every 1kg of silage dry matter costs around 2.5 more than grazed grass, but is anywhere from three to four times cheaper than 1kg DM of a compound ration.
Silage costs on a per tonne basis will be lower as yield increases. But there is a balancing point between yield and feed quality that farmers should work towards.
There is little benefit in having bulky crops of grass that merely serve as gut fill, as higher levels of concentrate feeding will be required to drive weight gain and milk production.
And vice versa. Having top quality silage is a positive, but you still require enough in reserve to last the winter.
The cost and time to mix, haul and spread slurry using a 2,000 gallon tanker is taken as €20/ac
As an example of working out costs, assume a farmer harvested 50ac of first-cut silage in late May on rented land.
Three bags of cut sward costing €330/t were applied, along with 3,000 gal/ac of slurry. The bagged fertiliser cost €49/ac, plus €3/ac to cover fertiliser spreading.
The cost and time to mix, haul and spread slurry using a 2,000 gallon tanker is taken as €20/ac.
Land is rented at €180/ac, which over a 10 month rental period works out at 60c/day. Assuming silage ground was closed off for 55 days to grow and harvest the crop, the ground charge is €33 for first-cut.
Contractor charges come to €90 for mowing, rake, lift and buck-raking. Combined, the outlined inputs costs come to €195, as outlined in Table 1.
Cost/tonne
Normally, a well-grown crop of ryegrass harvested at the end of May should yield around 10t/ac, but given low grass growth this spring, the example assumes a yield of 8t/ac.
At the outlined yield and inputs, the cost to produce first-cut silage is €24/t. If silage had been harvested in early May at 6t/ac, the cost of the crop rises to €32.50/t.
1 Selling a standing crop of silage
When it comes to selling silage, there are two options open to farmers. First off is to sell as a standing crop of grass. Second is to sell silage later in the year.
In recent weeks, several farmers have expressed an interest in selling a standing crop of grass to another farmer, who then covers the harvesting costs.
The question being asked is what value to put on standing grass. This should be a mutual agreement between both parties, but at the very least, the farmer selling grass needs to cover the inputs costs.
Second-cut
Take the example of a farmer looking to sell 30ac of standing grass. This time, 2,500 gallons/acre of slurry has been applied to silage ground at a cost of €15/ac.
As the nitrogen content of slurry applied in summer is less than half that of a spring application, 80 units of chemical nitrogen is being applied.
This is approximately three bags/ac of cut sward, purchased at €310/t. Factoring in a €3/ac spreading cost, chemical fertiliser amounts to €49/ac.
Using three bags/ac of CAN will reduce the fertiliser bill.
Ground rent should be factored in to this example, as the grass produced is not being utilised by stock, either as grazed grass or winter feed on the farm of origin.
For a 55 day period from mid-June at 60c/day, ground rent is €33. Totalling up the basic inputs, the cost of growing grass to the point of harvesting is €97/ac.
Agreement
There is no profit margin allowed for in this example, just the breakeven cost of inputs outlined. Inputs will vary from farm to farm.
The purpose of the example is to work out what it costs to grow the grass before selling. These costs and a margin can then be discussed between the two farmers completing the transaction.
The second option is to sell baled silage. Assuming the farmer doesn’t sell the standing crop and ends up baling grass, what are bales worth to sell?
Again, the price must cover the cost of production and for the sake of the example, the cost to mow, bale and wrap a bale is €11 and includes plastic.
On top of the €97 input costs, at a yield of 10 bales per acre, the cost to make bales is typically €21, based on the outlined costs.
Read more
Farm Profit Programme: improvements paying off in Tomintoul
Main beef unit at AFBI condemned
After light crops of first-cut silage and many livestock farms buffer-feeding cows with fodder to stretch grazing rotations, there are likely to be more farmers looking to purchase additional forage ahead of the winter.
Therefore, where farms are in a fortunate position to have surplus grass this summer, this could be a valuable commodity that can be cashed in later in the season.
Every autumn, there are multiple ads selling silage at a range of prices. In some cases, there will be silage sold below the cost of production
When it comes to selling silage, how many farmers take the time to work out what it costs to make?
Every autumn, there are multiple ads selling silage at a range of prices. In some cases, there will be silage sold below the cost of production.
The problem with costing out silage production is that the input costs are spread over several stages, some of which are rarely considered.
Inputs
For instance, fertiliser is often purchased on credit, then paid for later in the year along with fertiliser used for grazing ground.
Silage ground is often sprayed to control weeds before cutting, yet this is rarely factored in to costs. Diesel and time taken for slurry and nitrogen applications, as well as rolling swards, are also rarely considered as a cost.
If all these factors were paid for in one cheque, it would give many farmers a different outlook on silage production
Land rent also needs to be included. After the contractor’s fee, the price of a plastic cover is often overlooked.
If all these factors were paid for in one cheque, it would give many farmers a different outlook on silage production, especially when it comes to selling forage.
Cost effective
That said, silage diets are the backbone of winter feeding programmes on Irish cattle farms. While it can be expensive to make, good quality silage is still a cheaper feed compared to purchased concentrate.
Every 1kg of silage dry matter costs around 2.5 more than grazed grass, but is anywhere from three to four times cheaper than 1kg DM of a compound ration.
Silage costs on a per tonne basis will be lower as yield increases. But there is a balancing point between yield and feed quality that farmers should work towards.
There is little benefit in having bulky crops of grass that merely serve as gut fill, as higher levels of concentrate feeding will be required to drive weight gain and milk production.
And vice versa. Having top quality silage is a positive, but you still require enough in reserve to last the winter.
The cost and time to mix, haul and spread slurry using a 2,000 gallon tanker is taken as €20/ac
As an example of working out costs, assume a farmer harvested 50ac of first-cut silage in late May on rented land.
Three bags of cut sward costing €330/t were applied, along with 3,000 gal/ac of slurry. The bagged fertiliser cost €49/ac, plus €3/ac to cover fertiliser spreading.
The cost and time to mix, haul and spread slurry using a 2,000 gallon tanker is taken as €20/ac.
Land is rented at €180/ac, which over a 10 month rental period works out at 60c/day. Assuming silage ground was closed off for 55 days to grow and harvest the crop, the ground charge is €33 for first-cut.
Contractor charges come to €90 for mowing, rake, lift and buck-raking. Combined, the outlined inputs costs come to €195, as outlined in Table 1.
Cost/tonne
Normally, a well-grown crop of ryegrass harvested at the end of May should yield around 10t/ac, but given low grass growth this spring, the example assumes a yield of 8t/ac.
At the outlined yield and inputs, the cost to produce first-cut silage is €24/t. If silage had been harvested in early May at 6t/ac, the cost of the crop rises to €32.50/t.
1 Selling a standing crop of silage
When it comes to selling silage, there are two options open to farmers. First off is to sell as a standing crop of grass. Second is to sell silage later in the year.
In recent weeks, several farmers have expressed an interest in selling a standing crop of grass to another farmer, who then covers the harvesting costs.
The question being asked is what value to put on standing grass. This should be a mutual agreement between both parties, but at the very least, the farmer selling grass needs to cover the inputs costs.
Second-cut
Take the example of a farmer looking to sell 30ac of standing grass. This time, 2,500 gallons/acre of slurry has been applied to silage ground at a cost of €15/ac.
As the nitrogen content of slurry applied in summer is less than half that of a spring application, 80 units of chemical nitrogen is being applied.
This is approximately three bags/ac of cut sward, purchased at €310/t. Factoring in a €3/ac spreading cost, chemical fertiliser amounts to €49/ac.
Using three bags/ac of CAN will reduce the fertiliser bill.
Ground rent should be factored in to this example, as the grass produced is not being utilised by stock, either as grazed grass or winter feed on the farm of origin.
For a 55 day period from mid-June at 60c/day, ground rent is €33. Totalling up the basic inputs, the cost of growing grass to the point of harvesting is €97/ac.
Agreement
There is no profit margin allowed for in this example, just the breakeven cost of inputs outlined. Inputs will vary from farm to farm.
The purpose of the example is to work out what it costs to grow the grass before selling. These costs and a margin can then be discussed between the two farmers completing the transaction.
The second option is to sell baled silage. Assuming the farmer doesn’t sell the standing crop and ends up baling grass, what are bales worth to sell?
Again, the price must cover the cost of production and for the sake of the example, the cost to mow, bale and wrap a bale is €11 and includes plastic.
On top of the €97 input costs, at a yield of 10 bales per acre, the cost to make bales is typically €21, based on the outlined costs.
Read more
Farm Profit Programme: improvements paying off in Tomintoul
Main beef unit at AFBI condemned
SHARING OPTIONS