Will tile drainage pay off?Dwight Aakre can promise that tile drainage in the Red River Valley will pay for itself. Beyond that, his crystal ball is cloudy.
By: Jonathan Knutson, Agweek
Dwight Aakre can promise that tile drainage in the Red River Valley will pay for itself. Beyond that, his crystal ball is cloudy.
The real question, he said, “Is how long will it take to pay it off? I have no idea of how long. And that should be the more pertinent question that you have.”
Aakre, farm management specialist with the North Dakota State University Extension Service, spoke Feb. 16 at the annual International Crop Expo at the Alerus Center in Grand Forks, N.D. More than 5,000 people attended the two-day show, which began Feb. 15. The show is sponsored by area potato, small grain, soybean and dry bean groups.
Other speakers included Bret Oelke, a member of the University of Minnesota agricultural business management team, and Ryan Anderson and Kyle Schafer, CHS agronomists stationed in northwest Minnesota.
Interest in tile drainage in the Red River Valley of eastern North Dakota and western Minnesota is the strongest it’s ever been.
Tile drainage involves installing underground pipes in fields to regulate subsurface water and help plant roots develop properly.
Some people might assume that recent wet weather is driving all the interest. “But that’s only part of the answer. Higher crop prices are part of the answer, too. If we drop corn back to $3 (per bushel), there’ll be a lot less interest in tiling,” Aakre said.
“We’ve come through two or three years of the best prices we’ve ever had. Will that continue?” he asked.
Nobody knows, nor does anyone know whether the region’s wet cycle will continue, he said.
Aakre also urged farmers considering tile drainage to ask themselves this question:
“How long are you willing to wait to get your investment back? If you’re 60 years old and plan to retire in five years, that’s a whole different decision than if you’re 25 and expect to be farming another 30 or 40 years,” he said.
Aakre stressed that farmers should take a long-term perspective when considering installing tile drainage.
“We remember recent history and we probably put too much emphasis on what just happened. In fact, tile investment is a long-term investment and we need to look at what will happen over an extended number of years,” he said.
The price of natural gas, which is used to make nitrogen fertilizer, has fallen to a 10-year low in the United States. That’s causing some farmers to complain that fertilizer prices should be lower.
“The problem is, the majority of our stuff (fertilizer) comes from overseas. So that’s why we’re not getting the full benefit of the cheap natural gas,” Schafer said.
Among the statistics cited by him and Anderson:
• America imports more than half of the fertilizer its farmers use.
• The U.S. imports more than 60 percent of its urea fertilizer. Urea provides nitrogen, a key nutrient for plant growth.
• Twenty-three percent of America’s urea supply comes from Arabian Gulf countries, and transporting urea from the Arabian Gulf area to northwest Minnesota takes 65 to 77 days.
There are signs that American plants will begin producing more urea, Anderson said.
“Hopefully, in the next five years we can have U.S. (urea) production increasing again, Anderson said.
• The United States is projected to use more than 23 million tons of fertilizer this planting season, up from 22 million tons last year. Corn acreage is expected to rise sharply, and corn uses a lot of fertilizer.
Oelke examined the economic case for planting different crops this spring.
His conclusion: “Corn is king from a financial standpoint,” even though the cost of growing the crop has risen sharply in the past few years.
Soybeans have potential, too.
“Soybeans can work in a lot of areas — not all of them,” he said.
Dry bean and malt barley prices have risen enough that they may attract some interest, he said.
However, “Wheat makes me weep,” he said. “It’s been a very, very difficult crop to grow profitably. We’ve had a couple of years where it’s done quite well, but it’s been primarily because of yield and out-of-the-ordinary prices.”
Farmers should be asking themselves why they want to grow wheat, Oelke said.
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