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Production Reporting and Land Value: How Farm Documentation Addresses Annual Return and Land Appreciation

January 29, 2021 - Mollie Aronowitz, AFM

Peoples Company Land Management focuses on maximizing production on the most productive acres as well as protecting the most environmentally sensitive acres of each farm. We do this by focusing on four critical areas:

  • Conservation by addressing the impact of farming practices on soil erosion and water quality at an individual farm level. This includes tillage practices, crop rotation, permanent seeding (including CRP), cover crops, and the placement of commercial fertilizers.
  • Soil Fertility with the amount, timing, and placement of commercial fertilizers to address both the goal of balanced soil fertility as well as water quality downstream.
  • Drainage with traditional conservation practices, such as grass waterways and permanent seeding, can reduce erosion. Additional subsurface drainage tile may be required to manage excess water below the surface to increase a farm’s productivity.
  • Yields as the culmination of addressing conservation, soil fertility, and drainage in an effort to increase production.

Meeting with clients and operators to be the boots on the ground is a rewarding aspect of managing farmland. What is less showy – and gets less attention – is the documentation and reporting that pulls all the important work together behind the scenes.

Without documented farm history, how is a farm operator or land buyer to know what he/she is renting or buying? How does one know if a farm has been properly managed to produce at a high level?

In Iowa, we value farmland with the Corn Suitability Rating (CSR2) assigned to the soils of the farm. While it is helpful to know the general soil characteristics of a farm, it is no longer enough when making important financial decisions. Renting/buying an Iowa farm solely on CSR2 ratings is similar to renting/buying a 25-year-old car based on factory specifications. There is a lot that can happen from the day the car rolled off the factory floor and today to affect its value – and farmland is similar.

Early each year, Peoples Company Land Managers prepare annual Business Plans for managed farms. Using data collected from each tenant layered with farm analysis, Land Managers provide clients with a comprehensive farm overview. The annual Business Plan covers:

  • Farm Maps and Drone Photos
  • USDA Compliance Review
  • Lease Review
  • Previous Year’s Production Data: Tennant fertilizer/chemicals applied and yield maps.
  • Capital Improvement Projects Analysis
  • Weather/Contributing Factors Overview of the Past Growing Season
  • Client Opportunities for Additional Income Potential

This extensive overview to record the previous year’s production, as well as future opportunities, provides a clear road map into the next growing season. This report combined with the Summer Farm Visit Report ensures each farm is well cataloged over time.

The Summer Farm Visit Report includes in-season drone photos of each farm with details on the growing season and insight from tenant discussions. This report provides needed background information when considering leases for the coming year.

With Peoples Company as the first private management company in the nation to enroll all managed acres in the Leading Harvest sustainability standard, there is an added assurance that Peoples Company farms are documented with Leading Harvest’s 13 sustainability principles at the forefront.

This documentation in hand with the wealth of data it provides, clearly defines production potential to ensure farmland buyers and renters will pay a proven premium. The added value in the work and documentation of a Land Manager will outweigh the annual management fee expense.

For more information on how a Peoples Company Land Manager can add value to your farm, please visit PeoplesCompany.com or email LandManagement@PeoplesCompany.com.

Published in: Land Management