Silage Cost of Production

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Retrieved: August 4, 2020, 2:36 pm

Editor’s note: The following is part one of a two-part series that will help you to evaluate the advantages and disadvantages of silage production across Canada.

Hay is a major forage source over the winter-feeding season in the cow/calf sector, but an increasing number of producers are considering silage if they aren’t already using it.

According to the 2016/17 Western Canadian Cow-Calf Survey, most respondents practiced some type of extensive feeding method, such as in-field feeding, for most of the winter. While all respondents used rolled bales (baled hay or straw) as part of their feeding program, about 30% also used other winter-feeding methods and materials including silage and chopped hay with a bale processor. In the east, the 2015/16 Ontario Cow-Calf Survey shows that 91% of producers winter their cattle using baled hay, while 45% reported feeding silage. According to the 2016/17 Atlantic Cow-Calf Survey, average days on feed by feed type (non-exclusive to one feed type) are 83 days on silage, 74 days on baled hay, and 52 days on crop residues.

Advantages and Disadvantages of Silage

A major benefit to putting up silage is that, provided the crop is at the right stage, it can be harvested in almost any weather condition. Lengthy dry down times can be avoided and harvest operations can continue even in cool or moist conditions. When harvesting silage, it is recommended that the crop be at 60-65% moisture level to maximize quality and packing effectiveness.

Compared to most other systems, such as baling dry hay, silage has fewer harvesting losses and more nutrients can be harvested per acre. Ensiling permits the use of a wider range of crops including grasses, legumes, grains, corn and salvage crops that have suffered weather damage or weed infestation. Also, silage harvest can typically be done in a much shorter timeframe compared to hay.

The major disadvantage of silage compared to hay is that it requires more capital investment or cash costs. Due to the high costs of planting and harvesting equipment, many livestock producers choose to not own the equipment, but rather hire custom operators. As custom operators are usually booked well in advance, producers need to plan seeding and harvest well ahead of time and make sure they have custom operators lined up. Also, silage has limited market potential, because trucking costs restrict the distance hauled, so it must be produced near the location where it will be fed.

Cost Considerations

The costs of producing barley or corn silage on a per acre basis are typically higher than dry hay production.  Using Manitoba as an example in western Canada, total production costs of barley silage and corn silage on an operation that owns the associated equipment are estimated at $292/acre and $447/acre respectively, which is 20% and 85% higher than the cost of producing dry alfalfa grass hay ($242/acre). Higher costs for barley and corn silage production is mainly associated with seed and treatment, fertilizer, machinery and labour.

When changing the assumption from owned equipment to using custom operators, machinery and fuel expense drop, while custom costs are added. Using the mid-point of surveyed custom work rates, estimated total production cost drops to $286/acre for barley silage and $440/acre for corn silage, which remains 18% and 82% higher than the cost of producing dry alfalfa grass hay. There is a similar story in Ontario, with the total cost of corn silage production estimated at $549/acre in 2019 which is 59% higher than the cost of producing alfalfa-timothy hay at $346/acre.

It should be noted that there can be a wide variation in custom work rates depending on the region, yield, harvest conditions and other factors. Producers should estimate costs based on their own farm situation.

More information on custom rates

Ontario, Survey of Custom Farmwork Rates Charged in 2018

Manitoba, Farm Machinery Custom and Rental Rate Guide

Saskatchewan, 2018-19 Farm Machinery Custom and Rental Rate Guide

Alberta, Custom Rates Survey 2017-Hay and Silage

 

Yield Matters

As silage production is an expensive process per acre, trying to achieve optimum yield is a key factor to lower silage production costs on a per ton basis.

Using the projected 2020 Manitoba cost-of-production numbers, production cost on a dry matter (DM) basis is estimated at $104/ton for barley silage ($38/wet ton, yield at 7.5 wet ton/acre, DM% at 37%), and $109/ton for corn silage ($31/wet ton, yield at 14 wet ton/acre, DM% at 29%), compared to $99/ton for alfalfa-grass hay ($87/wet ton, yield at 2.79 wet ton/acre, DM% at 87%) (See Table 1). In order to reduce the cost per ton for silage to a cost similar to dry hay, the tipping point of barley silage yield is 7.83 wet ton/acre and corn silage yield is 15.40 wet ton/acre.

Table 1. Estimated Costs*, Manitoba

Alfalfa-grass Hay Barley Silage Barley Silage
(yield +4%)
Corn Silage Corn Silage
(yield +10%)
$/acre $242 $280 $280 $435 $435
$/ton (as fed) $87 $38 $37 $31 $29
$/ton (dry matter) $99 $104 $99 $109 $99
Yield (wet ton/acre) 2.79 7.50 7.83 14.00 15.40
Yield (DM ton/acre) 2.44 2.76 2.88 4.03 4.43
DM Content % 87% 37% 37% 29% 29%

* assume using custom operations in silage production

Ration Is Part of The Answer

Achieving the optimum silage yield levels requires the right combination of temperature, moisture conditions, fertility and seed variety, which is not possible in every growing season for every operation.  But not being able to produce silage at a lower cost than hay doesn’t necessarily mean silage is not an economical feed option. Blending silage with less-expensive feeds such as straw can keep overall feed cost low while meeting the animal’s nutrition needs.

While silage production isn’t necessarily cheaper than hay, producers can use silage to build a ration that is more economical than a hay-based ration.

Using Table 1 cost estimates, and an assumed price of straw at $64/ton, a silage-based ration made of 33lb barley silage and 19lb cereal straw would cost $1.18/cow/day. This is cheaper than a hay-based ration comprised of 16lb alfalfa grass hay and 16 lb cereal straw, which would cost $1.21/cow/day. (Note that this only includes the cost of main feed ingredients; other expenses such as vitamins, minerals, yardage, labour are excluded).

Size Matters

The 2018 Saskatchewan Forage Market Price Survey reported producers who turned to silage as a feeding option are those with large cow herds (250+), mixed operations that own large equipment already, or those in areas where land prices are high.

How big does a beef operation need to be to economically feed silage? While there is no simple answer to the question, we can look at how big the cow herd needs to be to consume the silage produced.

Assuming a silage-based feed ration requires 33 lbs (or 12 lbs DM) of barley silage per day for a beef cow in mid-pregnancy with a body condition score of 3.0, and silage yield is at 8 ton/acre (or 3 ton/acre DM); production from one acre of land can support three cows over a 150-day winter feeding period.

If a producer can harvest about 100 acres of land in one day at 3 ton/acre DM yield (using custom silage services with a big chopper (e.g. 700 hp motor), two semis and one tandem hauling), one day of harvest would yield 300 tons of DM, which is enough to feed 300 cows over the winter. This may explain why many producers who turned to silage as a feed option are those with more than 250 head of cows.  While the above analysis assumes all silage produced on the operation is fed in the same year, it should be noted that silage can be held over from one year to the next as well.

Decision-making tools

Compared to traditional hay production, the benefits of silage include less dependence on weather conditions and less time required during harvest, as well as the ability to mix with other more economical feedstuffs to reduce overall cost of feed. However, for many producers who are used to hay production, growing, harvesting and feeding silage could be a steep learning curve.

From a cost perspective, it is important to identify the added costs associated with silage production (e.g. additional fertilizer, labour) and the equipment changes required for feeding silage (e.g. a mixer wagon and a second tractor); and consider factors such as average hay yield, current cost of production, as well as targeted silage yield, and yield potential in the area. There are decision making tools available to calculate and compare costs of production for hay and silage.

Even if silage has a higher production cost compared to hay, a silage-based feed ration mixed with less-expensive feeds such as straw may provide a more economical feeding option, depending on current price level, feed quality, and the animal’s nutritional needs.  Producers can use BCRC’s decision making tool Winter Feed Cost Comparison Calculator to compare the costs of main feed ingredients in different rations.

While the above discussion mainly focuses on cost factors, it should be kept in mind that there are other critical factors to consider, such as variety selection, harvest and storage management. To learn more, visit the links below.

Learn More:

2020 Cost of Production: Silage – Manitoba Agriculture, Farm Management

Evaluating Corn Silage – Beefresearch.ca

Increasing Silage Yield and Quality – Beefresearch.ca

Silage Variety Yield and Quality Differences – Beefresearch.ca

Stored Forages – Beefresearch.ca

References:

Alberta Crop Report: Alberta 2018 Greenfeed and Silage Production SurveyGovernment of Alberta

Beauchemin, K., Baron, V., Guyader, J., and Alemu, A. (2018). Keys to Producing High Quality Corn Silage in Western Canada. Proceedings from the 2018 Western Canadian Dairy Seminar. Available here.

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