← FarmCPA Home

Maximize Your Current Land Revenue!

By: | Trackback URL | No Comments

April 27th, 2012

In a meeting with one of my clients in Northern Illinois yesterday, we discussed one of their options for increasing their current land holdings without adding more land.  They are in an area where farmland is costing $12,000 or more and none is available.  Additionally, land rents are approaching or exceeding $400 per acre.

One option is to put an irrigation pivot on a 240 acre plus parcel.  Although this land is already yielding at least 200 bushels on average, putting in the irrigation system would cost about $200,000.  The return would be increasing their yield to around 300 bushels per acre.  If their normal variable costs are around $400 per acre, the additional $200 k investment would yield about $60-80 thousand per year or a less than three year pay back.

This probably beats paying $200 thousand for 16 acres of land.

In your operation, are you doing everything to maximize your current land production before going after other, possibly, more costly options.

Paul Neiffer

Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a partner with CliftonLarsonAllen in Yakima, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. In fact, Paul drives combine each summer for his cousins and that is what he considers a vacation. Leave a comment for Paul. If you would like to leave a comment for Paul, follow the link above, however, please make sure to include your email address so that he can reply to your comment (your email address will not automatically show up).

More Posts - Website

Follow Me:
Twitter

← FarmCPA Home

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Subscribe to this blog by:

Previous Posts

Events

View upcoming speaking engagements and other networking events for Paul Neiffer and CliftonLarsonAllen’s agribusiness team.

See All

  • Twitter Feed

    I hope KC does not waste all their hits tonight 2 days ago

    Nothing better (for a farm boy) pic.twitter.com/DUShoT5cpF

    5 days ago

    If you have higher yields or go all corn for the 2014 crop year consider ARC-IC. It may more than offset base acre penalty 7 days ago

    Presenting two farm bill seminars today. Dayton and Walla Walla 1 week ago

    Netflix down $110 in after hours trading. Sign of momentum stocks going flat? 2 weeks ago

    Getting ready to go to LA to defend my son and I APU Alumni golf tournament victory last year. I may have to carry him again 2 weeks ago

    Everybody worried about bubble in land market. They should worry about stock market bubble 2 weeks ago

    77 degrees on October 8. Perfect. 3 weeks ago

    Somehow IRS listed several counties in Iowa as drought stricken. Hard to believe after all the rain this year 4 weeks ago