A guide to pricing haylage and baleage

By Lauryn Krentz, Vita Plus dairy and youngstock specialist

“My neighbor is selling haylage.  What is it worth?”

This question has been posed to dairy and forage consultants countless times.  The answer depends on numerous factors – both subjective and objective.  When broken down, the process isn’t as daunting as it may initially seem.

The objective factors are the easiest to assess.  For our purposes, let’s assume that – when quality is similar – 1 pound of haylage, baleage, or dry hay is valued the same on a dry matter (DM) basis.  This allows us to find a reference feed as a starting point.  (There may be some arguments on how these different feeds physically interact in a total mixed ration (TMR); this is a subjective factor and something each farm will need to consider.)

Local hay auction prices are a good place to find reference values.  Pricing is usually reported in terms of packaging (often small square, large round or large square bales). To find a reference value for pricing haylage, the large square bale is most relevant.  In terms of quality, ideally, these outlets would show an actual lab analysis of the crop.  More commonly, a relative feed value (RFV) or relative feed quality (RFQ) index may be reported along with a breakdown of hay type (often alfalfa or grass).

Let’s work through an example:

Your neighbor has an analysis of the haylage he is interested in selling.  It is alfalfa haylage that is 40% DM and 145 RFV.  According to the April 1 University of Wisconsin-Madison Extension Hay Market Report, this would qualify as Grade 1 (125 to 150 RFV) alfalfa hay.  I like to average the RFV range when I find a reference, which means our reference bales would be at 137.5 RFV on average.  The average price is $101 per ton for 85% DM Grade 1 large square bales.

Now we start the adjustments:

The first step is finding an adjustment factor for the DM differences between our reference bales and the haylage.  If your neighbor’s haylage is 40% DM and the reference bale is 85% DM, simply divide 40 by 85 to get the adjustment factor of 0.47.  This means that correcting for DM only, the neighbor’s haylage is worth 47% of the University of Wisconsin-Madison price on an as-fed basis.  Therefore, the moisture-corrected value would be $101 x 0.47 = $47.47 per ton as fed.

This is a good ballpark number since our reference bale value is within the same quality range, but we can get more specific.  Our neighbor’s haylage is a little higher at 145 RFV than the 137.5 RFV average that we used for our reference bale value.  To find the correction factor, divide the reference bale RFV by the RFV of the haylage in question (145 / 137.5) to get a factor of 1.05.  Next, multiply this factor by our moisture-corrected price (1.05 x $47.47) to get our quality-corrected price of $50.06 per ton as fed.

Other subjective factors will likely come into play, including distance, pickup versus delivery, and shrink from storage and transportation.  You and the seller will need to discuss and decide how these considerations will impact the final price.

You may have an opportunity to get even more specific using a commodity-based pricing structure to help put value to the nutrients in the haylage. Your local Vita Plus consultant has software tools to evaluate the value of a forage in a ration.  The price for haylage can be weighted on the nutrient value it brings to the table as compared to commodity prices and even dry hay that could be purchased at auction.  This whole-ration approach can help you determine a fair deal compared to alternative feed sources.  If you’d like to dive deeper into these considerations, please reach out to your local Vita Plus consultant.