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Marketing your business based on feed quality delivered

Mike Rankin Published on 08 September 2010

Developing a fair and equitable method of charging for custom harvesting forage has long been a popular point of discussion. Most operations charge clients on a per-ton, per-hour or per-acre basis.

In the open market, we know that forage quality plays an important role for determining the value of alfalfa, and to a lesser degree, corn silage.

This brings to question the utility of harvested forage quality as a pricing consideration for the custom harvester. In other words, “Should you market your business based on feed quality delivered?”

There are two ways to think about this concept. The first is simply to use forage quality as a “talking” or “advertising” point when trying to obtain new clients or keep existing ones.

This approach is routinely used in marketing circles; for example, “With a name like Smuckers®......it has to be good.” With this strategy there are no guarantees or price structure adjustments, but the thought is being conveyed to the client that you’re confident enough in your operation to deliver a quality product based on timeliness and dependability.

The more risky and complicated approach is to actually use forage quality as a factor to set or adjust the price charged for crop harvesting on a per-ton basis. Before traveling down this road, some careful thought and consideration is needed. First, there needs to be a breakdown of the factors that impact forage quality and, more importantly, a determination of those factors that are in your control. Further, we need to realize the factors impacting alfalfa forage quality are not the same as those for corn silage.

Alfalfa
In most cases the custom harvester is going to have little control over the crop up to the point of when it is harvested. Alfalfa variety selection might have an impact on harvested forage quality, but it won’t be as large as some of the other factors. Further, variety selection will definitely have an effect on yield, as is the case for soil fertility. Pests, weeds or insects such as potato leafhopper, will impact both yield and quality.

The growing environment plays a huge role in harvested forage quality. For the arid and irrigated areas of the U.S., this may be more of a predicable factor. However, for most areas the variability in the amount and timing of rain or temperature fluctuations is the anti-known.

Lower temperatures and moisture deficit generally favor higher forage quality, but there are an unlimited number of possible interactions. What we do know is that growing environment is often the reason why forage quality is not always what we expect.

Plant maturity, or time of cutting, plays a large role in harvested forage quality as well as yield. This is no great revelation for anyone working in the forage industry. Any thought of using forage quality as a primary factor for charging clients must be accompanied by the ability to control time of cutting. However, there is a significant “Catch-22” here. Harvesting earlier to improve forage quality comes with the tradeoff of lower yield.

In Wisconsin, for every five-day delay in first cutting harvest, the average drop in Relative Feed Value (RFV) is 20 points and the average increase in yield is 0.25 tons dry matter (DM) per acre.

Hence, you have to determine if the added revenue from higher forage quality will be offset by fewer tons harvested. If charging based on forage quality, expectations for yield and quality between the custom harvester and client need to be closely aligned and pricing structures set up accordingly.

The time between cutting and harvest (chopping or baling) also impacts alfalfa forage quality. It’s during this time frame that plant cell solubles (carbohydrates) and dry matter are lost to respiration.

Although this will always occur to some degree, these losses become significant if wilting is delayed by rain or poor drying conditions. The recent push toward wider swaths to hasten drying time is founded on the principle of reducing respiration losses.

For custom harvest operations, this factor is also impacted by the size and number of machines being operated to get the crop harvested in a timely manner.

Finally, there are mechanical factors that impact forage quality. For example, Wisconsin studies show an increase in yield of 0.13 to 0.5 tons per acre and a reduction of 1 to 7 RFV points for each 1-inch cutting height reduced from 6 to 2 inches.

Corn silage
Being a direct-cut crop, the factors impacting corn silage quality are somewhat different than alfalfa. The pre-harvest factors of hybrid selection, soil fertility and pest control are similar in scope, although the specific considerations are different. For example, brown midrib hybrids are significantly higher in digestibility, but often lower-yielding, than standard corn hybrids. Again, in most cases the custom harvester has little control on pre-harvest factors.

Like alfalfa, corn silage quality can be manipulated by cutting height. Further, there is the kernel processor factor. Having a kernel processor on the corn chopper has reached the point of being standard equipment and an expected “service” of the custom harvester, whether the crop is priced for quality or not. The impact of a properly set (2 to 3 mm roll clearance, greater than 90 percent kernel breakage) kernel processor is undeniable, especially as whole-plant moisture declines.

Without question the most important factor impacting corn silage quality is whole-plant moisture, or time of harvest. Once again, any thought of using forage quality as a pricing criteria needs to be accompanied by the ability to dictate harvest time and the capacity to harvest a lot of acres in a short period of time.

Assuming the target is 65 to 68 percent moisture, an average drop of 0.5 percent moisture per day translates to about a week’s worth of optimum harvest window for a given field. Corn silage harvested above 70 or below 60 percent moisture is a recipe for disaster from a forage quality standpoint.

If considering a quality criteria or guarantee for pricing corn silage, instead of using milk per ton or digestibility, simply offer a moisture range for a base price, with dockage for a crop that is too wet or dry.

Final considerations
For the dairy and livestock producer, feed quality has a direct impact on animal performance and profitability. He/she at the very least hopes for a high-quality crop, and in many cases expects quality feed to be delivered. If it’s important to the client, it in turn must be a made a priority for the custom harvester. For this reason, forage quality becomes a legitimate if not necessary marketing and advertising tool for your business, assuming you have what it takes in terms of equipment and labor to “deliver the goods.”

In most cases, the custom harvester is hired because they can get the job done more efficiently and better than the farm operation can do it themselves. Using forage quality as a primary pricing tool is possible, but extremely risky unless full control is given over the harvested crop (as would be the case on owned or rented acres by the custom operator). Considerable thought must be given before adopting these types of arrangements.  FG

Mike Rankin is a Crops and Soils Agent at the University of Wisconsin.

PHOTO
Any thought of using forage quality as a primary factor for charging clients must be accompanied by the ability to control time of cutting. Photo courtesy of Mike Rankin.

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