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November 14, 2019
Featured Finance

What to Consider Before Purchasing a Farmland

Agriculture is a major economic activity in the United States. Agricultural and food industries contributed $1.03 to the American gross domestic product in 2017, according to the United States Department of Agriculture (USDA). The number of people who buy farmlands has risen over the years. Some of them apply for loans intended for farmland purchases through banks. Yet, many people lack a clear understanding of what to look for when buying a farmland. Here are four things new landowners should consider when choosing a farmland.

 

1. Purpose

Different land parcels are appropriate for different uses. For example, land which is on a stony region is ideal for residential use. Also, you might need a huge farmland if you will be living with in-laws or relatives. Many people use their land in several ways. You can rear chicken in one section of farmland and keep cattle in the remaining space.

 

2. Water Supply

Water supply is essential for agricultural and residential land. Also, it determines the types of crops you can grow on your farm. Specialty crops need a lot of water. It is recommended to grow them in areas that have high rainfall intensity. Check the quality and quantity of water available before you irrigate your crops. A standard water source supplies 27,000 gallons of water per week. Moreover, it should sustain your crops in the summer. Ponds, local municipals, streams, and wells are the main water sources in America.

Filter out surface water to remove organic matter that might clog your irrigation system. Municipal water is expensive compared to other water sources. Thus, it is wise to use it sparingly during emergencies. Liaise with a local water resources board to get a permit to irrigate from a river or stream. For example, the Oklahoma Water Resources Board controls surface water irrigation in Oklahoma.

 

3. Barns and Fences

Each farmland should have a rigid fence. It helps in containing livestock and protecting costly farm equipment. There are different types of farm fences. They have varying maintenance requirements and prices. Check the fence of the farmland to determine sections that need repair. Learn how to install and repair different fences to cut down the maintenance costs of your fence. Also, check the barns on the farm. It should support different structures such as poultry cages and tool sheds.

 

4. Soil

Most farmlands in the U.S. have a variety of soils. Loams have good drainage and it suits many crops. Clay soils are poorly drained hence making them ideal for root crops. Land with a steep gradient is prone to erosion. It can support certain fruits. Space out your farm structures if you are interested in large-scale livestock production. It improves ventilation and illumination in your land.

Many people get excited when buying farmland. Some farmers have different ideas on how they can use their land. It is important to consider the purpose of the land before you apply for loans for farmland purchases. Also, conduct a soil survey to determine the right crops to grow. Most crops need enough water supply during growth and flowering stages. It is advisable to choose farmland which is near a reliable water source such as a river or dam.

If you need help in applying for a farm loan, American Ag Finance will guide you through the whole process. We have over 65 years of experience, and we design our loans to meet your financial needs. This way, you’ll only have to focus on growing your business.

 

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