Tile Is One Way to Add Value to Farmland
Low on-farm income has farmers wondering how they can add value to their operation in the wake of low commodity prices. Expansion isn't always an option without adding a significant amount of debt, but tiling may be.
After installing tile, producers may see a yield bump due to less plant stress, less disease, better plant stand, and lower compaction. Other benefits can include earlier planting, better harvest conditions, and less wear and tear on equipment.
While an owner-operator reaps the most benefit from installing tile, a tenant can also benefit. If this is an option you'd like to explore, it's probably best to sit down with your landlord and negotiate a longer rental agreement to ensure you see the benefit of the tile.
Farmer-tenants need to prepare themselves with the benefits associated with tile when going to speak to a landlord. While there are a variety of reasons, here are a couple to push that landlord in the right direction:
- More consistent yields. Tiled fields can help crops better use available resources and provide less financial risks if yields remain consistent.
- Less soil compaction. You want to take the best care of the land as you possibly can, and that means reducing soil compaction.
As far as the financial payoff to put tile in, take into consideration that it is a long-term investment. The investment varies depending on if the land has a main tile line driving directly through the property, or if the tile needs to connect a half mile away to the neighbors main line.
“The biggest cost differential will be the size and distance of the main tile line,” says Jacob Handsacker, Hands On Excavating LLC. Handsacker explained that if the main tile line was through the property, the landowner could see a cost from $600 to $750 per acre. But if the line was a half mile away with the neighbors, that’s when landowners could see a $1,000-per-acre price.
"Farmers that tiled this past spring and ended up having a very wet planting season could see an immediate difference after installing the tile,” says Handsaker. Owner-operators can instantly start to see the return following season but to see the complete return on investment expect it to be 6 to 10 years down the road.
Spot Tiling on Hill Ground
If a landowner can’t afford to pattern tile the whole field, spot tiling may be something to consider. The tiling contractor can go in and spot tile so that costs aren’t incurred across the whole field. Spot tiling can be especially beneficial for growers that have rolling land where there are low spots but don’t have consistent trouble across the field. Spot tiling is as popular as pattern tiling, especially with today’s thin margins.
When it comes down to adding value and needing to expand, investing in tile is a solid investment without taking a significant financial risk. Because of the added value of adding tile to your farmland, this will play a part into the overall value of the land when it’s time to sell.
Written by David Whitaker, the owner of the auction and real estate company Whitaker Marketing Group. Dubbed the "Iowa Land Guy," Whitaker specializes in farmland auctions and also farms with his family outside Ames, Iowa. If you or someone you know is interested in selling a farm, contact a Whitaker Marketing Group land agent and they would be happy to answer questions or provide a free evaluation of your property.