Blog Series: Part 3 of Considerations to Make Your Farm Business Successful
Part 3—Understand Your Risks before Purchasing Land
Introducing a new blog series. This is the third blog of a four-part blog series full of valuable information for your farm business.
You are in the third part of learning how to make your farm business successful and you have gained knowledge on business planning as well as considerations to make before purchasing big ticket items. You’re now ready to start searching for the right piece of farmland.
Finding the right farmland involves more considerations than most capital expenditures, and can have a major effect on your profitability. Prepare to spend time researching various aspects of the land and evaluating its compatibility for your operation. Finding the right farmland to meet your goals may take several months of visiting multiple sites.
While doing your research, consider the following aspects:
- What was the prior use of the land?
- Is the soil type right for you & is it healthy soil?
- Does the property have good drainage?
- Does it have access to water?
- What is the property zoning?
- Does the land’s topography meet your needs? How much of the property is usable?
- What is location in comparison to distributors, retailers and markets? Proximity to major roads
Previous Land Use
Understanding the land’s previous use could be a big influence on whether you decide to purchase the property or not. For instance, the property could be contaminated with toxic chemicals from a previous industrial operation or have been sprayed with a long residual herbicide that would affect your upcoming crop growth. It’s important to know what may be hiding in the soil. Do your research and talk to the prior owner, if possible. A third party environmental survey may also be helpful in identifying any unseen issues.
Understanding the soil composition of the property is important as not all soils are created equally, and some are more suitable than others for growing crops. Therefore, it is important to find out what type of soil is on the property in order to make sure it aligns with your planned crops. The USDA provides free online soil maps and data that can be a helpful tool to learn about the soil type.
It is equally important to understand the soil health of the property as well. This will provide you the knowledge about how much amending of the soil will be needed. This could be an added expense if the soil does not have the right nutrients and acidity for your crops. Once you’ve identified a property reach out to your local extension agent regarding soil testing options to learn more about the soil health.
Farmland with poor drainage can adversely affect crop growth and lead to diseases such as blight, root rot and mold. Also inadequate drainage allows salt to accumulate in the soil hindering the plants ability to uptake water and nutrients resulting in poor growth.
Check with a local surveyor to learn more about the drainage on the property. Also check to see if the property has direct access to a drainage ditch. Additionally, the USDA or other online tools may be able to provide aerial views to help you see drainage issues.
Access to Water
Water is a critical component to the success of your farm. Consider the property location and if water is accessible. In your planning process determine the quantity and quality of water available for irrigation. Is there an existing well on the property or will a new well be needed? Are consumptive use permits for existing wells current or will new permits be required? While wells are extensively used in Florida for crop irrigation, if there is not one on the property the time and cost of obtaining permits and putting in the well should be taken into account.
Make sure you have an understanding of what you can and can’t do on the property before purchasing it. The land zoning classification could significantly impact your plans for the farm especially if it is zoned residential only. Be sure to check the local counties website for tax and land information. Generally you can find zoning information there. Remember, you may need the parcel id number to look the property up.
The topography of the land should also play a key role in your decision prior to making a purchase. It is recommended to visually survey all of the property to understand all aspects of its topography. Once you have done that, consider the amount of open pasture versus wooded acreage. Is it on a large hillside? For instance, excessively sloped property is susceptible to erosion problems. In your decision making process, consider the financial impact from the inability to utilize the hillside property or additional cost incurred to clear wooded acreage.
In addition, make sure you identify if the property has any wetlands and consider how much acreage is actually useable. Wetlands are highly protected in Florida so make sure you learn about the wetland conservation provisions to avoid possible illegal alterations.
Location! Location! Location!
If the property location is far from distributors, retailers and markets this could be a competitive disadvantage. The farther the property is from major roads, the more potential expense for fuel and labor hauling heavy equipment and crops several times a year. Consider your goals, if agri-tourism is your plan consumers may be less likely to travel far from populated areas. In addition, consider if the access to the property, is there both legal and physical access. Additionally is that access via a paved county maintained road, or will the expense for maintaining the road fall to the owner?
With these considerations at top of mind, you can now search for farmland with confidence, equipped with the right information to make the best decision to help achieve and exceed your business plan goals.