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There is a lot of talk and hype about the rising price of farmlandthroughout North America. Farmland will always be a goodinvestment, but in this volatile economic environment, it may beprudent to look at investing in the land you already have ratherthan buying more. The return could be significantly better. We"ve had successive wet years in parts of the Corn Belt. Toomuch water can significantly reduce yields, increase soil erosion,cause nitrogen loss and inhibit nutrient uptake. There are several soil and water conservation practices (some withcost-sharing opportunities) that can add to the value of your farmwith competitive returns on investment. Make it pay. Having adequate drain tile really paid off last year. On ourfamily farm in eastern Iowa, my father invested in a Vermeer tilingmachine in 1965 and my brothers and I installed nearly 70,000 tilesduring a 20-year period. Although I thought we had adequatedrainage this year, we made a decision to add to the existinginvestment. We wound up essentially pattern-tiling the whole farm. Analyzing the yield map records convinced us to expand on thetiling success we had already achieved. The yields were 300 bu. per acre over the tile lines, and withinseveral rods on either side the yield would drop 100 bu. Drainagepays. Or to put it another way, lack of good drainage reduces yourbottom line. Our farm"s drainage systems are on the top end, so tilingcosts less than on some farms where one would have large expensesto get adequate outlets. But a $450 to $500 per acre investmentcould pattern-tile a farm with good outlets for the drainage lines. To make a tiling decision, do a few calculations to seewhat"s feasible for your farm. For offsetting income, I useda 12-year study by The Ohio State University. This research showeda 20 bu. to 30 bu. per acre increase in corn yields and a 7 bu. to15 bu. per acre increase in soybean yields. Based on that data, I assumed a 25 bu. increase for corn and a 10bu. increase for soybeans. My grain price assumptions were $5 cornand $12.50 soybeans, both coincidentally figured to a $125 revenueincrease per year. The net present value was $185, which meant that with a 10-yearpayback, the cost of the investment is returned and I increase mywealth by $185 per acre in today"s dollars, assuming theopportunity cost on my investment was 10%. By using a math calculation called Modified Internal Rate of Return(MIRR) to measure my rate of return, I can compare different investment strategies, as long asthe projects are similar in size. The MIRR on this tiling project was 33.95%. That"s a lotbetter than the stock market over the past year and better than the10% to 12% return from stocks over a long period of time. I am an expert from customsiliconerings.com, while we provides the quality product, such as Slip Clutch Disc , Oil Seal Viton, Rubber Vibration Dampers,and more.
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