Expert: Have Goals Set Before Purchasing Farmland

2/1/2014 7:00 AM
By Katelyn Parsons D.C. Correspondent

COLLEGE PARK, Md. — There are a number of factors to consider when purchasing farmland. For new and beginning farmers, finding the perfect farmland can be a struggle.

At the recent Future Harvest CASA Farming for Profit Stewardship Conference, Sue Ellen Johnson, former director of agriculture and rural economy for the Piedmont Environmental Council, delved into the factors producers should consider when purchasing farmland.

According to Johnson, the most important factor when purchasing farmland is “your goals.”

“I have two stories,” Johnson said. “One goes back to the dot-com era. Dot-com millionaires moved to the Hudson River valley, where I was working at the time. They built farmhouses with big barns before deciding what their goals were. Then they would call and ask what they should grow to create a cash flow. This lack of planning caused many of these businesses to fail.

“The next story is a happy story,” she said. “These people had no money at all. They went to work on a vegetable farm that had the same goals they wanted to fulfill. After three years of building their skills, they were matched up with a farmer that had 38 acres of bottomland that would be excellent for vegetables. They are currently 15 years into a 40-year lease that makes a six figure income between the landowner and the leasers.”

These stories are reminders why goals are important when selecting farmland.

“There are many factors to consider,” Johnson said. “Water, infrastructure, the location, the roads and distances to markets, as well as the community and farm services nearby, all are things to consider.”

And they all relate back to one’s goals.

“The amount of land you need will vary depending on what type of farm you want,” she said. “A cow-calf operation will need about 500 acres to make a median income of $40,000 to $60,000, while to make the same income, you would only need five acres for vegetables.”

There are more things to consider as well, including the quality of the land, permits needed and lifestyle, according to Johnson.

“There are tools that you can use to evaluate soil quality,” she said. “The National Resources Conversation Services offers a soil web survey that evaluates the farmland you are interested in. It gives you a soil map and you can find out what the soil is potentially good for.”

This service is available at http://websoilsurvey.sc.egov.usda.gov/App/HomePage.htm.

Johnson also recommends going to the farmland and taking samples of the soil to send to labs that analyze soil content. From there, the potential buyer can make an informed decision about the quality of the land and what the soil could possibly need to be useful.

“You also need to think about zoning and permit issues,” Johnson said. “You need to plan before you buy. If your plan isn’t going to work with a board, then you need to reconsider where you are buying the land.”

She also warned against buying farms that may have been former dump sites. Spills of hazardous materials may cost a landowner a lot of money to clean up.

“You should consider if you really want farming for a livelihood or for the rural lifestyle,” she said. “If it is the latter, you need to consider your options whether that means leasing the land out or other options.”

Johnson also warned against farm defragmentation.

“Farm defragmentation where you break up large tracks of farmland, leads to a loss of agricultural capacity,” she said. “You need to think about what your part is in the agricultural economy.”

There are many options to consider before investing in a farm.

“Before purchasing land you need to get experience, visit a working farm, explore your options, consider your skill and network to find the best farm for you,” she said. “You should also consider leasing. Many people want to own their own land, however, leasing sometimes can be a better option. Leasing land can run from $1,000 per acre for vegetable land to $50 to $60 per acre for pastureland.”


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10/24/2014 | Last Updated: 3:30 PM