- Reach out to dairy and livestock producers now to set up a contract: know how much grain you can sell and at what price.
- Get a lawyer or outside legal advisor involved to protect both producers.
- Consider keeping this relationship more long-term as it could be attractive for grain and livestock producers alike.
With so much late-planted corn, it’s likely many farmers are struggling with wet grain. If dryer space runs thin, you don’t want to take quality hits, or your elevator is full—consider talking to local livestock producers, especially dairy farmers.
“Even if elevators aren’t full this might be a great option,” says Emily Carolan, Pioneer sales manager in western Wisconsin. “A lot of dairy producers had to plant more alfalfa, sacrificing some silage acres. Because of this, grain producers and dairy producers can work together more in the next couple years.”
In addition to fewer silage acres, tonnage is variable across the U.S. and, in many areas, starch content is low. That means dairy producers need corn to fill out starch needs. More specifically, dairies need high moisture corn.
“Anywhere from 28% to 35% makes the best high moisture corn to feed,” says Ted Koehler, Syngenta Enogen ruminant nutritionist. “Silage in the Midwest is running 28% to 30% starch and it’s normally 33% to 35%, that means there is less corn in the silage and they’ll need to supplement it with corn grain.”
If you sell wet grain to dairies or beef operations, you don’t have to pay for propane or the elevators for drying costs. In addition, depending on the location it could save time and freight costs for grain and dairy producers alike.
Start the conversation
“Drive up their driveway that’s the No. 1 connection you can make, face to face,” Carolan says. “We see a lot of ads on Facebook and Craiglist but that doesn’t seem to be as effective.”
Before going to the farm Carolan recommends you have a price in mind that’s appealing for both you and the livestock producer. In addition, know how much moisture is in your grain and how much you can deliver and when.
If you don’t know where dairies are or who to ask for, Koehler recommends talking to some of your trusted advisors at co-ops or retail, they likely work with or know livestock producers in the area.
“Once you get past that hurdle it’s a matter of ‘how do we set up a contract?’” Koehler says. “I would include someone other than just the two farms for the safety of the livestock and grain producer—some kind of legal document so everyone is protected.”
Don’t be surprised if the dairy or livestock producer wants grain in large quantities, rather than dropping off a truckload a week. Because they have to grind and process the grain it’s often easier to do it all at once, instead of in small loads.
Pricing wet grain
There are many ways you can reach a price, the important thing to consider is that it needs to be appealing for all parties.
“if you go to any grain retailer and say I want to contract to buy X number of bu. per month I want to contract they’ll give you a price,” explains Koehler. “And let’s say there’s a 20-cent margin between buying and selling corn. Instead of going to the elevator, the grain and livestock producers could split that down the middle. It gives the grain producers a little advantage and the livestock producer shares in that win.”
Alternately, Carolan says when the grain producer visits the dairy or beef operation, they could simply take the average cash grain price from all of the local elevators. This keeps you competitive and provides the benefit of delivery that the livestock producers might not get from an elevator.
Ultimately, pricing will be a conversation and decision that comes down to you and the livestock producers you’re working with. Be flexible, and know what your bottom line is to make the best decision.