How tiling your problem areas can have a BIG impact on your bottom line
Have you ever considered the value of getting the most out of what you have, rather than expanding? Recent studies have found that farming 4,000 acres 5% more efficiently than the ‘average’ operation can make it as profitable as farming 8,000 acres.
In western Canada, drainage improvement represents a real opportunity to meet or exceed that 5% improvement, plus it may allow you to open up more acres you already own rather than having to buy more land.
Most of our plow owners don’t farm flat fields. They farm rolling land with potholes, springs, and areas that have become non-productive due to excess moisture. Most of them tell us the benefits they are seeing from spending just a few days each fall tiling are having a REAL positive impact to their bottom line.
Our example will give you an idea of how much benefit you could see from spending just a few days tiling your farm each year. The calculator assumes you lease your equipment (as most of our clients do) and write-off the payments as an expense each year. It will then calculate the potential benefits in terms of both land value and increased efficiency and productivity as a result of your tiling efforts, assuming that you are able to open up approximately 15 acres of marginal land for each day spent tiling (which we feel is a realistic number).
The end result shows you how much you could make if you spend a few days tiling each fall.
CURRENT LAND VALUE: $2,500/ac
DAYS SPENT TILING PER YEAR: 5
POTENTIAL ACRES GAINED/IMPROVED PER YEAR: 50
(APPROX QTRS IMPROVED PER YEAR: 2)
ANNUAL EQUIPMENT PAYMENTS: $16,000
COST OF TILE: $25,000
VALUE OF GAINED ACRES: $125,000
(bottom-line increase in your land asset)
ANNUAL BENEFIT OF TILING PROBLEM AREAS: $12,000
(improving efficiency & overall average yield on tiled quarters by 5%)
YEAR 1 NET BENEFIT: $84,000
(increased land value minus costs)
ANNUAL NET BENEFIT IN YEARS 2+: $12,000/yr
(5% increased productivity & efficiency on tiled quarters)
5 YEAR NET BENEFIT OF SPENDING 5 DAYS TILING THIS YEAR: $132,000
(Year 1 Net Benefit plus year 2-5 Net Benefit)