Todd Lewis has stopped gambling on potholes.

“We had areas on the farm that were low-lying, with higher elevation around them,” says Lewis, who raises corn, soybeans and hogs near Forest City, in north-central Iowa. Although these depressions were tiled, they often held water. “We could get a crop there maybe once every four years,” and even in a good year, “yields were below trend line.” Potholes “are a gamble.”

Farmed potholes — shallow depressions where water often stands during wet periods — are consistently less profitable than upland parts of fields, and often lose money, according to a recent analysis by the Iowa Soybean Association (ISA). These wet spots are also prone to nutrient loss due to poor crop development and leaching, says Adam Kiel, ISA state water resources manager, who led the pothole profitability study.

Tight margins and increased attention to water quality make this a good time to scrutinize pothole performance on your farm, Kiel says.

The ISA study analyzed nine years of yield data on 8,500 acres of cropland in central Iowa. The data was collected from 2006 to 2014 by participants in ISA’s On-Farm Network.

Using high-resolution LIDAR elevation data, researchers categorized yield points as uplands or potholes, excluding headlands and yield outliers. Then researchers used profitability mapping to calculate revenues, expenses, profits and return on investment for each field’s upland and pothole areas, Kiel says.

The study found that corn yields in pothole acres were nearly 10% lower than upland yields, averaged over the nine-year period, and soybean yields were almost 17% lower. Profits for the period averaged $152.50/acre for uplands and $83.27/acre for potholes.

Intense rain events costly

But a deeper analysis of the data showed that just three years of high returns — 2010, 2011 and 2012 — were responsible for lifting pothole profits into positive territory over that nine-year period, Kiel says. When those three years were excluded, potholes lost an average of $32.36/year over the remaining six years.

Moreover, losses in low-lying areas were greatest in years of normal or above-normal precipitation. For example, during wet spring 2014, average pothole losses topped $200/acre, according to the analysis. The three years when potholes were slightly more profitable than uplands occurred when spring precipitation was below normal. But Iowa is seeing a trend toward more frequent wet springs and more intense rain events, Kiel says. That’s one of the dynamics “that is driving our discussion of profit and loss in potholes.”

Outside the Prairie Pothole Region of the Dakotas, Minnesota and Iowa, growers may not see as many wetland basins within fields. Still, “every field has areas of lower productivity,” which often have “a disproportionate share of soil and water-quality risks,” Kiel says. “As we enter a period of low prices, it’s important to consider if there are alternatives that might be more profitable.”

Replant or let wet spots be wet

Cutting inputs in pothole areas is one tactic, Kiel says. Taking a hard look at replanting decisions is another. “Doubling down in those areas may not be a good use of your resources.”

Another option is to let wet spots be wet, Kiel says. Taking potholes out of production “can be a win-win in terms of water quality, risk reduction and increased profitability.”

That’s what Todd Lewis did.

He restored 30 acres of previously cultivated wetlands on five of his farms, and added about 50 acres of grass buffers surrounding the wetlands. The restorations were done through the USDA Farmable Wetlands Program, which provides incentives for farmers to re-establish prairie pothole wetlands.

Lewis also worked with one of his landlords to restore a five-acre pothole on a rented farm. “That pothole drowned out every year I farmed it! Here was an opportunity to take it out of production, chop my rent bill, and put money in the landowner’s pocket. Now I don’t have to fight it every year.”

In some fields, Lewis considered adding more tile instead of letting potholes revert to wetland, but decided the payback was too long. “It made more sense to pull those areas out of production and get a conservation payment, while helping to clean up water and add to wildlife habitat.”

The Farmable Wetlands Program is one of the best-paying Conservation Reserve Programs, says John Whitaker, state executive director of the Iowa Farm Service Agency. Participants are eligible for cost share to help establish the wetlands. Annual rental payments, which are based on the three predominant soil types in the area, generally run about 20% higher than other CRP programs, he says. In northern Iowa, for example, typical rental rates on a 10- to 15-year farmable wetland contract are around $300/acre, he says.

“They are a big priority, because of the water quality enhancements of wetlands. It’s a very good practice.”

Pothole wetlands on working lands

The Natural Resources Conservation Service (NRCS) works with farmers to design a pothole wetland and surrounding buffer that fits with the farmer’s equipment and field configuration, says Jason Moore, NRCS district conservationist for Winnebago and Hancock counties in Iowa. Flexible guidelines “allow us to square up the buffer and make the rest of the well-producing land fit the equipment.”

Farmable wetlands are also designed to protect existing tile, Moore says. “Many times, we use in-line water control structures,” which let the farmer “restore the wetland without long-term negative impacts to the tile system.” While the area is under contract, the control structure stop logs are left in place, raising the water table under the pothole.

After the contract expires, “the boards can be removed and the tile system functions the same as before it went into the program,” Moore says. If tile lines in or near potholes can’t be disabled, there are other techniques to slow drainage in the wetland basin, such as removing intakes, he says.

Alternative strategy for potholes

New water modeling tools are helping some growers boost profits in farmed potholes.

Instead of taking several perennially wet depressions out of production, Jonesboro, Ill., farmer Collin Cain used 3D GPS land-shaping technology to eliminate the potholes and correct gully erosion.

Cain optimized surface drainage in a 50-acre corn-and-soybean field using landforming software from OptiSurface Design, one of a new generation of precision drainage design products. The Australian company uses highly-accurate GPS data to produce multi-slope, multi-grade drainage designs, says drainage contractor Nick Schaefer, owner of Schaefer Excavating, Anna, Ill., who designed Cain’s pothole fix.

The 3D technology moves water off the field in multiple directions, instead of “forcing water in one direction, like traditional laser setups do in a plane design,” Schaefer says. Pothole elevations are raised and slopes reduced, but the field’s basic contours are retained. “By fixing these areas, farmers are gaining acreage, better crop yields, and ease of farming without ditches or potholes,” Schaefer says.

The new technology looks like a good soil conservation tool, too, says Keith Livesay, a resource conservationist for Union County, Ill., SWCD. “It appears to slow water movement off a field and let it infiltrate into the soil. When water moves slower, it drops sediment in the field rather than carrying it away.”

Cain eliminated about 12 acres of farmed potholes that regularly drowned out crops, spending $336/acre for drainage design and earth moving expenses, averaged over the 50-acre field. Cain also gained an extra five acres of productive cropland within the field, which had not been farmable before, turning a 50-acre field into a 55-acre field. He spent $4,200/acre for those additional five acres.

The benefits were clear the next season, 2015, which was “our wettest year on record,” Cain says. “But we didn’t lose one square foot” in that field due to ponding. “It was very impressive.” Cain estimates a payback of five or six years from increased yields, but adds that the drainage improvements “appreciate the land value immediately. It’s good ground.”

Justin Fleck, a precision agriculture consultant from Rochester, Ill., who uses OptiSurface software, agrees. “There are lots of acres in the Midwest with drown-out spots in the middle of fields. Think of it: If you can get, say, five more acres of farmland worth $7,000/acre or more, why not fix the land you have to make it all productive?”