How Did Your Corn Grow in 2022?
Each year as Tax Day passes and businesses close their accounting records on the previous year, those engaged in agricultural production have the opportunity to assess their financial results and draw comparison against similar enterprises.
Accounting firms and financial consultants often provide to their clients the means for summary and comparison to performance of peer enterprises.
Another source of this information is the records aggregated in FINBIN, available from the Center for Farm Financial Management, University of Minnesota.
The basis for this discussion are 2022 results from 250 farms with corn silage production enteterpises1 drawn from FINBIN and can be applied to similar enterprises associated with producing feed for dairy herds.
2022 Compared to 2021
Returns to enterprises raising corn for silage were slimmer in 2022 compared to results from 2021. Net return over total costs (including charges for labor and management) slid from $204 per acre in 2021 to $154 per acre on 2022.
Despite increased yields recorded in 2022, the total cost of producing a ton of corn silage increased by 27%, from $34 per ton (as fed basis in these records) in 2021 to $43 per ton in 2022.
Comparing “The Best” to “The Middle”
A contrast of results from “The High 20%” (quintile of growers which produced the highest returns per acre from their corn silage enterprise in 2022) to the “The Middle”, those growers financial results for which settled to the middle (40-60%) quintile finds some interesting information.
Land rent, seed, fertilizer, crop chemicals and crop insurance expenses accounted for about 60 percent of Direct and Overhead Expenses for an acre of corn silage in 2022. Producers in each of these quintiles spent nearly the same amount of money ($512-$515 per acre) on these items.
Direct Expenses for growers in “The High 20%” were $82 less per acre than for those in “The Middle”. Expenses for the categories of Repairs; Fuel & Oil; Custom Hire, as well as Packaging and Supplies accounted for 85% of this difference.
What Else Was Different?
Corn silage yields were similar – 23.4 tons for “The High 20%”; 22.3 for “The Middle”. “The High 20%” received a value of $58-59 per ton for their production. Everyone else in this dataset received a value of $47-$50 per ton.
How does $59 corn silage work into your dairy enterprise? GPS Dairy Consulting uses the SESAME program (The Ohio State University) to compare the value of nutrients in feed ingredients. SESAME reports for the Midwest US from the final quarter of 2022, the time at which 2022 corn silage would have been available to feed, indicate that corn silage priced at $59 per ton was rated as ‘A Good Buy”, the nutrients in corn silage worth more than the price paid.
- FINBIN (2023). Center for Farm Financial Management: Univ of Minnesota.
Retrieved April 27, 2023 and adapted from http://finbin.umn.edu
Bio: Don Deetz, PhD, PAS offers more than twenty years of experience in providing dairy nutrition and management counsel to dairy operators, primarily in the upper midwest and northeast regions of the United States. Don provides exclusive, independent counsel in the areas of nutrition and management programs, featuring evaluations of herd production, health and reproductive performance records; forage inventory evaluations; planning and implementation of forage plans; and implementation of programs for growing dairy heifers.
