Farm drainage tile pays on ground that needs it and barely pays on ground that does not. Iowa State’s farm management specialists put the yield gain at about 30 bushels of corn and 12 of soybeans on somewhat poorly drained soils, and just 12 and 5 on moderately well drained ones. On rented ground the landlord usually pays, because tile is a permanent improvement to the land, and recovers it through higher rent. If a tenant pays instead, get prorated reimbursement in writing before the first trench is cut. And before any new tile goes in, file with the FSA office for a wetland determination, or you can lose your USDA program eligibility.
Key takeaways
- The poorer the natural drainage, the bigger the payoff. Well-drained ground gains little.
- For a landlord, tile on the right soils can return twice the farm’s rent yield, recovered through rent.
- Tenant-paid tile needs a written, prorated buyout if the lease ends early. Without one, a termination notice can wipe out that money.
- New tile requires an AD-1026 at FSA and a certified wetland determination from NRCS. Start now for spring installs.
- CSR2 assumes tile is in where the soil needs it, so a buyer will discount poorly drained ground that is not tiled.
Does tile pay on my farm?
It depends almost entirely on what kind of soil you have.
Iowa State Extension farm management specialist Charles Brown laid out the yield response by drainage class in a 2017 Wallaces Farmer interview:
- Very poorly to poorly drained soils: about 54 more bushels of corn and 18 of soybeans.
- Somewhat poorly drained: about 30 of corn and 12 of soybeans.
- Moderately well drained: about 12 of corn and 5 of soybeans.
Northwest Iowa is full of all three, often on the same quarter. A Galva-Primghar farm on the uplands and a farm full of Colo in a drainageway are not the same tile decision. The soil map tells you which acres are which, and so does your tenant. Ask where the planter waits in a wet May.
About half of Iowa cropland, roughly 13 million acres, already has subsurface tile, according to an April 2026 economic analysis. The question for most owners is not whether to tile from scratch. It is whether the old system is still doing its job, and whether the wet spots it never covered are worth chasing.
On cost, the only number that counts is a current written quote from a drainage contractor who has walked your farm. Spacing, depth, main size, and how far you are from a good outlet all move it. When a 2019 Wallaces Farmer panel that included two Iowa State economists took up tiling on rented ground, the figure discussed was $800 to $1,000 an acre for pattern tile, with $1,100 or more easy to hit. That was 2019. Get quotes.
What does tile return to a landlord?
More than the farm does, on the right soils.
Iowa State’s 2026 cash rent survey reports that northwest district rent runs $1.41 per bushel of average corn yield. Use that as the bridge. If tile adds 30 bushels of corn yield potential on somewhat poorly drained ground, that is roughly $42 an acre more the farm can carry in rent.
On a $1,000-an-acre tile job, $42 a year is a 4.2% gross return. The same district’s farmland rents for about 2% of its value. Tile on ground that needs it can earn twice what the land underneath it earns.
On moderately well drained ground, the same math gives you 12 bushels, about $17 in rent, and 1.7% on the same job. That is a worse return than the dirt. Do not let anyone talk you into pattern tiling a Galva hilltop.
The rent-per-bushel figure is a county-wide ratio, not a promise, so treat this as a way to rank projects, not a rent schedule. And it only works if the rent actually moves. Your 2027 lease was locked in on September 1, so tile you pay for this fall does not show up in rent until 2028 unless you and your tenant agree in writing to change it. That is a very reasonable conversation to have before the tile goes in, and a hard one after.
Who should pay for tile on rented ground?
Usually the landowner. Tile outlives any lease, it stays with the land, and the owner collects the value when the farm is rented, sold, or passed down. There are three ways families set it up, and all three can work.
The landowner pays and raises the rent
This is the cleanest. The owner pays the contractor, keeps the tile maps, and adjusts the rent to reflect what the ground can now produce. Put the new rent and its start date in the written lease.
The tenant pays and gets paid back if the lease ends
Common when an operator wants tile sooner than the owner is ready to spend. Iowa State’s Brown advised tenants in this spot to get a long lease, seven to ten years, and a written promise of prorated reimbursement if the lease ends early. Without that writing, a tenant can lose the whole investment to a termination notice. Landlords should want the writing too. A tenant who paid for tile and has no buyout will not quietly accept a rent increase.
They split it
One example: the owner buys the tile and the tenant covers installation, or the cost is shared with a reduced rent for a set number of years. Any split works if the lease says who paid what, over how many years it depreciates, and what happens if either side ends the lease.
Whichever you pick, put it in a written lease. A handshake tile deal is how good tenant relationships end badly. If you are also rethinking the rent itself, our cash rent guide covers the method, and a flexible lease is one way to let rent follow the bigger crop automatically. This is general information, not legal or tax advice. Have your attorney draft the reimbursement terms and your CPA set up the depreciation.
What do I have to file before tiling?
An AD-1026 at your county FSA office, before any new drainage goes in.
Under the federal wetland conservation rules known as Swampbuster, draining a wetland for crop production after December 23, 1985, makes the farm’s owners and operators ineligible for USDA farm program benefits until the wetland is restored or mitigated, according to NRCS. Drainage that existed before that date can be maintained to its original extent. New tile, bigger mains, or tighter spacing are a different story.
Filing the AD-1026 starts the process. If NRCS needs to make a certified wetland determination on the acres you plan to drain, it can take several months, as University of Illinois Extension warned this spring. If you want tile in next spring, file this winter.
In August, USDA published an interim rule treating wetland determinations made since 1990 as certified, which settles a lot of arguments over old paperwork. Dig out any determination letters you have before you file. They may save you the wait.
Does tile raise what my farm sells for?
It protects the price more than it raises it. CSR2, the soil rating every buyer looks at, assumes drainage is already in wherever the soil needs it. So a poorly drained farm without tile carries the same CSR2 as the tiled farm across the road, and it will not farm like it. Buyers know this. They discount for it, and they ask for the tile maps.
That makes tile records part of the sale. A buyer looking at a map with mains, laterals, spacing, and install years can bid with confidence. A buyer looking at “some tile, not sure where” bids for the risk. If you are thinking about selling in the next few years, find or rebuild those maps now. We cover the rest of the paperwork in preparing your farm for auction.
How we handle tile projects at Midwest Land Management
For the farms we manage, a tile project runs the way it should: we look at the soils and yield maps to see where it will pay, get contractor quotes, handle the AD-1026 and wetland paperwork, settle the cost split and rent change with the tenant in writing, and keep the tile records with the rest of the farm file. That last part is why our managed farms sell clean. If you have ground that sits wet every spring and want a straight answer on whether tile is worth it, our farm management team will walk it with you.
FAQ
How long does drainage tile last?
Well-installed tile serves for decades, and many northwest Iowa farms still drain through clay tile laid generations ago. The practical question is capacity: old systems were often spaced wide and sized for less water than today’s farms move. Repairs and new laterals tied into old mains are common.
Can I repair old tile without a wetland determination?
Drainage that existed before December 23, 1985, can be maintained to its original extent under Swampbuster. Adding capacity or draining new areas can trigger the rules. When in doubt, check with your FSA office first.
Should I raise the rent after tiling?
Yes, if you paid for it. Use Iowa State’s rent per bushel of corn yield for your county as a guide to how much more the ground can carry, and put the change and its start date in the written lease before the work starts.
Does tile change my farm’s CSR2?
No. CSR2 rates the soil and already assumes drainage is in where needed. Tile changes how the farm actually performs, which is why buyers and tenants ask about it separately.
Wondering whether your wet acres are worth tiling, or how to split the cost with your tenant? Contact our Spencer office or call (712) 262-3110. If you are weighing a sale instead, start with a free farm evaluation.