How to Buy Farmland

Agriculture and farming impact society in several ways. Whether you are selling crops and goods from your land, raising animals to provide milk and eggs, or creating jobs through your operation to support the economy, there are many benefits to having farmland. If you are looking to purchase land for farming, here are some tips to get started.

Understand Your Needs

Before determining what kind of farmland to buy, you need to figure out what goals you have for the land. Here are some questions to consider:

• Do you want to grow your own foods like fruit and vegetables? 
• Are you considering selling something for financial gain? 
• Are you planning on having a farming operation with equipment and employees? 
• Is this an investment to pass on to your estate?
• Are you planning to keep this land as a recreational area for hunting?
• Will you have livestock?

There are a lot of possibilities that you should explore prior to beginning your search. Depending on what you are looking for will help you decide what type of ground will be best for your farmland, whether it’s row crop, pasture, timber, etc. 

What to Look for in Your Farm Property

Farmers look for some specific things when assessing agricultural land for purchase like geography, the quality of soil, water sources, growing conditions and more. The area you choose for your farmland has a huge impact on your operation, whether it’s large or small.  

Consider the Terrain

When looking at different geographical areas, you should consider the terrain or physical characteristics of the land. For instance, you may prefer a flat area of land to one that is elevated, or you may even want a wooded area on the property. You may need to consider if your farmland needs a specific type of soil if you plan to grow crops. Soil is suitable for growing plants and crops because it is composed of minerals, living organisms and organic matter compared to dirt, which is made of clay, sand and silt that your plants and crops may not thrive in. 

What Do Water Sources Look Like?

Water and rainfall are also important factors to consider when choosing a region for your farmland. While water is crucial for growth on our planet, inefficiently managing moisture in soil can potentially hurt your operation, depending on what it is. For example, if you are choosing to grow crops on your farmland, it may be difficult to balance moisture and dry soil if it’s raining all the time and the ground is not properly tiled. 

When a region has a natural water source — or even if it doesn’t — some people specifically look for tiled land, which is a form of agricultural drainage system that creates an escape route for sitting water. Irrigation systems and flood and drought history are also factors that could be considered when purchasing your farmland. Again, if you are hypothetically choosing to grow crops, you may not want land that has a history of flooding each spring and summer.  

Corn Sustainability Rating

Many of these factors can be described in one single number: a corn sustainability rating (CSR). CSR was developed as a way to measure potential soil productivity based on soil, terrain and weather conditions. The index ranges from 0 to 100 with CSR values closer to 100 being more productive. 

CSR2 is an index similar to CSR but is ultimately used more heavily now due to having a calculated formula. This data-driven method considers field conditions, water holding capacity, erosion factor and soil depth, taxonomy and particle size, whereas the original CSR is more judgement and experienced based. 

Ultimately, the CSR2 will help indicate what land may be suitable for your farm. 

What Else Is On The Property?

If you are considering buying agricultural real estate used for a large operation, some other factors to consider would be the conditions of any equipment or buildings on the property, including age and wear and tear. In these cases, if the buildings or equipment are older or have been used for several years, it may cost you to replace them and ultimately make buying farmland more of an investment.

Financing Options for Buying Farmland

There are a lot of financial resources you can consider when purchasing your farmland including the Farm Service Agency’s (FSA) farm loan programs, where new loans are introduced each year. These loans can vary from operating loans and farm ownership loans to youth and Native American Tribal loans. Another resource for finances could be the National Resources Conservation Service (NRCS). The NRCS is another federally funded, voluntary conservation program that helps farmers, ranchers and private landowners protect and conserve the natural resources we depend on by offering several state programs and initiatives that could support your new operation. 

Agricultural credit unions may also be helpful in financing your farmland. These credit unions provide farm owners and ranchers financial support for their operation. You could also seek out a private bank that specializes in lending ag loans. 

Ultimately, there are organizations and programs in place to assist with buying land. Applications and qualifications for each loan, grant or program may differ, but the farming and ranching community is widespread and there is a chance there is financial assistance for you. 

Insuring Your Farm

Buying farmland is an investment in itself. Owning and maintaining a farm is much more expensive than a house, especially for repairs and maintenance. Depending on what type of farming operation you will be running on the land, you may need to get your operation and land protected by insurance. 

There are several opportunities for coverage depending on your land and your operation, whether it’s large or small. Whether you want to insure your farm machinery and equipment, any farm vehicles or even people working on your operation, there are many layers that can protect you. The protection you may need will depend on your farmland and what type of operation you are running. Be sure to talk to your agent about the coverage that is right for you. 

Ensure Your Farmland is Protected

Owning farmland can be a great hobby, job or investment. If you are considering buying farmland for yourself, contact your local Farm Bureau agent to review your policy and see how owning new land may affect your insurance.