Introduction
The storage option you chose must be part of your overall operational plan. It is usually not a simple short-run decision. This decision involves the location of facilities, the trade off between capital and labor, and purchase versus raised feeds. These decisions should be made with a 10-year or longer planning horizon in mind.
Temporary highbred systems for feeding and storage can be used in an emergency, but they are usually not feasible over the long haul, because of the economics of scale. Therefore a long run plan is necessary. A good time to assess your overall feed storage plan is when you are expanding or when your current facilities are either worn out and need major repairs or obsolete. The types of facilities available can then be matched to that long run plan.
Therefore, the first question you need to ask about a storage system is, "Will it fit into my long range plan?" Other questions to ask are: Will this permit a larger business volume at reduced costs? What are the risks? Resale value?
The costs associated with storage and the dry matter losses in filling through unloading were calculated using a spreadsheet originally developed by:
| Dr. Brian J. Holmes, Professor and Extension Specialist |
| Biological Systems Engineering Department |
| University of Wisconsin-Madison |
| 460 Henry Mall |
| Madison, WI 53706 |
| (608) 262-0096 |
| BJHOLMES@FACSTAFF.WISC.EDU |
That spreadsheet was modified for used in this paper.
The first assumption that we need to make when comparing costs of various storage units is that there is little or no difference in the quality of the unspoiled silage that is removed from storage. The amount of spoilage will differ, and that will be taken into account in the storage costs. However, the difference in quality is directly related to the timing of the harvest and the management of that task and not the system used to store the crop.
There are two types of cost that need to be determined. They are fixed (ownership) and variable (operational) costs. The lumpiness of agricultural investments causes ownership costs to be a larger share of the total cost for smaller operators.
Five general types of forage storage units will be looked at tower silos
(steel, cast in place, and stave), horizontal silos (both bunkers and piles),
bags, wrapped bale silage, and dry hay. The costs of these storage structures
vary TREMENDOUSLY as well as whether they were purchased new or used, however
an attempt has been made to find a medium cost and look at new and used
in some cases. Also some of the variation is due to the accessories included
and/or insulation and site preparation costs. A sampling of costs required
to store 400 tons of dry matter are presented in Table 1. Note:
The structure costs for all the tower silos are for two 20X80-foot structures,
a concrete pad for all others except dry hay which has a 3 sided building
with a macadam base.
|
Table 1
Investments
|
|||||||||||
|
Storage Type |
Structure
|
Unloader
|
Unloader
Tractor*
|
Blade or
Bagger
|
Blower or
Wrapper
|
ß --------
Tractor*
|
|||||
| Steel/Glass Tower (Used) |
$80,000.
|
$26,000
|
$5,000.
|
$3,000
|
|||||||
| Steel/Glass Tower (New) |
$160,000.
|
$54,000
|
$5,000.
|
$3,000
|
|||||||
| Cast in Place Tower (Old) |
$30,000.
|
$7,000
|
$5,000.
|
$3,000
|
|||||||
| Cast in Place Tower (New) |
$60,000.
|
$18,000
|
$5,000.
|
$3,000
|
|||||||
| Stave Tower (Used) |
$40,000.
|
$7,000
|
$5,000.
|
$3,000
|
|||||||
| Stave Tower (New) |
$80,000.
|
$18,000
|
$5,000.
|
$3,000
|
|||||||
| Above Ground Bunker |
$44,000.
|
$4,800.
|
$8,000
|
$2,800
|
|||||||
| Packed Pile |
$21,560.
|
$4,800.
|
$8,000
|
$2,800
|
|||||||
| Silo-Bagger (9 ft) |
$18,743.
|
$4,800.
|
$25,000
|
$3,000
|
|||||||
| Silage Bale Wrap |
$7,200.
|
$3,000.
|
$15,000.
|
$2,250
|
|||||||
| Dry Baled Hay |
$21,600.
|
$1,000.
|
$1,000
|
||||||||
In addition to the values presented in Table 1, there are several other factors that need to be assigned values. Among those are the factors that determine the ownership costs. Table 2 shows the ownership costs for the various types of capital items. The years of useful life on the wrapper and Silo-Bagger was increased to 20 years when the use of those items was halved in the high capital systems. The salvage value of tractors, blowers, Silo-Baggers, and wrappers was set at 30 percent. The salvage value of silos and silo unloaders was set at zero.
Table 2 – Ownership Cost Calculations
|
Wrapper
|
Blowers
|
Buildings
|
Silo
|
|
| Item: |
Silo-Bagger
|
Tractor, Etc.
|
Silos
|
Unloader
|
|
Depreciation
|
14.00%
|
7.00%
|
5.00%
|
10.00%
|
|
Interest
|
5.20%
|
5.20%
|
4.00%
|
4.00%
|
|
Repairs
|
4.00%
|
3.00%
|
1.00%
|
5.00%
|
|
Taxes
|
0.00%
|
0.00%
|
1.50%
|
0.00%
|
|
Insurance
|
0.50%
|
0.50%
|
0.50%
|
0.50%
|
|
Ownership Cost %
|
23.70%
|
15.70%
|
12.00%
|
19.50%
|
|
Interest Rate
|
8.00%
|
8.00%
|
8.00%
|
8.00%
|
|
Years Useful Life
|
10
|
10
|
20
|
10
|
|
Salvage Value
|
30.00%
|
30.00%
|
0.00%
|
0.00%
|
The dry matter losses were allocated as shown in Table 3.
Forage storage costs per ton of dry matter (see pages 6-8) ranged from $102 for a new steel-glass oxygen-limiting structure, filled only once a year, to $21 per ton for big square baled hay stored inside an old barn or shed. It was assumed the forage was placed in the steel-glass oxygen-limiting structure at a lower moisture than it would have been placed in other silos and therefore had a 3 percent more field loss than other silos. Dry hay was assumed to have a 10 more field loss than the forage harvested for other silos.
Table 3 – Forage Dry Matter Losses
| Dry Matter Loss (%)* |
Filling
Plus *
|
Seepage
|
Gaseous
|
Spoilage
|
Unloading**
|
Total
|
||||||
|
Steel/Glass Tower
|
5
|
0
|
5
|
0
|
1
|
12
|
||||||
|
Cast in Place Tower
|
2
|
1
|
8
|
1
|
1
|
13
|
||||||
|
Stave Tower
|
2
|
1
|
8
|
1
|
1
|
13
|
||||||
|
Above Ground Bunker
|
2
|
1
|
8
|
5
|
2
|
18
|
||||||
|
Packed Pile
|
2
|
1
|
8
|
15
|
2
|
28
|
||||||
|
Silo-Bagger (9x200 ft)
|
2
|
0
|
5
|
0
|
2
|
9
|
||||||
|
Silage Bale Wrap
|
2
|
0
|
5
|
0
|
1
|
8
|
||||||
|
Dry Baled Hay
|
12
|
0
|
0
|
0
|
1
|
13
|
||||||
| * Steel/Glass Tower (OL) filled with 55% moisture feed; all other at 65%. | ||||||||||||
| ** Midwest Plan Service #7 6th Edition, 1997 | ||||||||||||
Forage storage costs, in a new steel-glass oxygen-limiting structure, filled twice a year, drops to $59 per ton of dry matter. Whereas, emptying and refilling a barn or shed with big square bales reduces the cost per ton of dry matter by about $2 per ton to $19.
Building a new tower silo is the expensive way to store feed. However, if you have a tower system in place, using it may be relatively inexpensive. Tower silos become very competitive if you discount the initial investment, thereby lowering the ownership costs. They are 40-60 percent of the total storage cost associated with a new tower silo.
An on-site steel-glass oxygen-limiting structure (no charge for investment) that is filled twice, has a cost of $33 per ton of dry matter feed fed.
Table 4 - Cost of Storage in Bags (200 x 9) at two silo-bagger investments
The storage cost per ton dry matter of feed declines as the number of bags filled increases. Table 4 shows the economics of scale. If you are using bags as a supplement to an existing system, you usually can not afford to purchase a Silo-Bagger.
Storage cost per ton are only one of several factor you may wish to consider when making long range plans. Other factors to consider are:
a) volume of feed to be handled
b) obsolescence
c) labor cost and availability
d) machinery and equipment needs for loading and unloading
e) spoilage and other losses
f) conveyors and other related equipment
g) number of rations to be feed
h) number of feeding stations
i) distance from feed storage to animals
j) convenience
Poor management is not considered in the study. However is should be noted that the effect of poor management will be less pronounced with tower silos and bags than with bunker silos.
The cost of the big baler to make silage bales, should it be included or should it be harvesting cost just like the chopper and wagons? This is just one of the adding a system problems.
Duel systems, all towers or all horizontal are usually somewhat complementary, however if you have a tower system and plan to do a few bags, an entire new set of equipment maybe necessary. Converting from bunkers to bags or visa versa can work well because the equipment is complementary and the base can be used in both. Since storing bags on a good base reduces unloading loses, this option may reduce overall storage costs.
The spreadsheet template used for the analysis is available at:
http://www.uwex.edu/ces/forage/articles.htm
Silage Storage & Bunker Silos