Valuing standing crops to sell/purchase and ensile for livestock feed is a perennially challenging question. Sellers want to maximize net income from their crops while buyers strive to minimize their feed expenses. In spite of the apparent challenges, it is possible to determine a price that is fair to both.
The most reasonable pricing strategy is to determine the fair market feed value of the crop and adjust that value by harvest costs. An adjustment should then be made for whichever party is assuming the risk of getting a quality feed harvested and into storage.
Feed value of a good crop that could be harvested as a grain crop or a forage crop will be considerably different than the feed value of a crop that will not make a harvestable grain crop. This could be a crop that was planted late and will not mature before expected frost or a drought-stressed crop that may make little or no grain but will have some value as a forage crop. “Valuing Corn for Silage…How much is it worth?” walks you through the process of valuing both “normal” and stressed crops for silage (web address below).
Two additional articles, “Pricing Standing Corn…” and “Pricing Standing Soybeans for Silage” were developed in 2002 to guide farmers through the process of pricing silage crops based on nutrient (feed) values. Market values of feed nutrients have changed over time, and these resources will be updated with 2005 prices in August.
Resources available at dairy.osu.edu:
Valuing Corn for Silage…How much is it worth?
http://dairy.osu.edu/resource/feed/Valuing%20Corn%20for%20Silage%202003.pdf
Pricing Standing Corn for Silage
http://dairy.osu.edu/resource/feed/Pricing%20silage%202002%20Final.pdf
Pricing Standing Soybeans for Silage
http://dairy.osu.edu/resource/feed/Pricing%20Standing%20Soybeans%20for%20Silage-Revised.pdf