The Steps to a Successful Cropland Purchase

Steps to Success

Now that I've shown you a little of what we do.  The next step is how do we go about implementing it.  Well, there are three steps to a successful cropland purchase.  Identifying good land, look into crop insurance and find comparables.

The first step is identifying good land.  The soil maps we talked about will do that for us.  The maps will tell us soil ratings, soil types, prime farmland ratings, flood zones and much more.

The second step is looking into crop insurance.

Crop insurance can be a life saver.  It can help you avoid major problems when the crop fails.  It has been especially important in the last couple of years due to the drought which appears to be ending.  What you will find getting crop insurance is that it records historical production trends for a series of years, it reports to the USDA and new buyers are eligible for crop protections.

The final step would be to find comparables to make sure you're getting a good deal.  You can also look into state reports on recent sales.  However, state reports and comparables suffer from not being timely.  

One thing to keep in mind is land can vary greatly in the same area.  Some land slopes a lot requiring terracing.  Some land floods too frequently.  Some land just has poor soils.  Some land is just too remote.  And what I mean by too remote is it may be too far from any farmer to not make it worth farming.  You have to consider how much it money it takes for a farmer to move his or her equipment from property to property.  That is something to consider.