How much is my farmland worth?
As a landowner, it is important to know how much your farmland is worth.
If you are looking to sell your land in the near future. If you have no intention at all of selling. You should be able to answer the question: What’s my farm worth?
How do you determine your land's value?
Let’s start with the basics.
What factors may affect your land valuation?
You probably want to know more about your land, specifically. That’s understandable.
The best way to get an accurate depiction of your farmland’s value is to have an appraisal completed.
When having an appraisal done, the appraiser will take a look at many factors and features of your land while evaluating and determining a price point.
Here’s a quick overview of what an appraiser will look at before setting their official appraisal amount.
The price of farmland is a moving target. We at Whitaker Marketing Group do our best to stay on top of the market conditions, and we watch the price of every land sale in Iowa very closely.
There are many factors that go into a farm valuation.
Location:
Location is a big factor in valuing land. The neighboring farmers and how aggressive they are when it comes to buying your farm can play a big part in your final price.
Farming ability, Shape:
Farms that lay nice and are easy for the farmer to get their equipment in and out, help the farm bring more money. Time is money! Square, Flat, and Black soils help you bring more money when selling your farmland.
Size:
The size of the farm plays into the total dollars that the buyer is going to spend. Most often there are more potential bidders that can afford to bid on the smaller tracts of land, so they tend to bring a larger price point. Conversely, once your farm acres drop below 40, it becomes less conducive for the farming ability aspect and can lower the price.
CSR, CSR2, Soil Type, Slope, Drainage:
The CSR score in Iowa is a rating system that scores the productivity of your farmland from .5 on the bottom end to 100 being the best farm. Iowa State released CSR2 to the USDA NRCS this past fall and the NRCS completed a soil database update in December 2013 and published it in January 2014. The biggest difference between CSR and CSR2 is the water-holding capability of the land. Other factors that affect what your CSR2 score is of course the Soil type, the slope, and Drainage. CSR stands for Corn Suitability Rating.
Water sources, Hunting & fishing ability:
Iowa is one of the best states for whitetail hunting, and as such some of our land sells to hunters that are looking for the next trophy. If you can show that you have a great hunting spot with lots of game this can also drive the price of your land. Since COVID in 2020 we have seen an increase in the value of Recreational Ground.
The Ability's to build a house, Zoning:
If your land lies within the 20-mile radius of a larger town and has the ability to build a house. This can drastically increase the value of your farmland. There is a catch. Each county in Iowa has different requirements for building a house. Be sure to check and see if your farmland is buildable by the local assessor's office. As a realtor, we talk about Highest and best use. If you are within that golden circle the highest and best use of your farmland may not be farming.
What is Iowa Land Values doing statewide?
It is helpful to start any search for the value of your farmland with a quick look at how land values are trending in the state of Iowa as a whole.
For this, one of the most useful publicly available resources is the Farmland Value Survey produced throughout the year by Iowa State Extension and Outreach’s Ag Decision Maker publication. It gives a general land value estimate of per acre prices in counties in Iowa, trends in land value, geographical land price relationships and the factors that are positively or negatively affecting the land market across the entire state.
We can also look at the Iowa Chapter Realtor Land Institute.
What factors are influencing the Farmland Market?
In general, there are several factors that are always influencing the farmland market in one direction or another. These factors will also have some influence on the value of your land, too.
Those factors include:
- Types of soil
- China and how much grain they ask for each year
- The percentage of tillable acres
- The current interest rates
- Location of the land
- 1031 tax deferred exchanges
- Drainage
- Farming practices used on the land
- Carbon Credits
- Yield history
- Soil fertility information
- Commodity Prices
- Current government programs
- PPP and MFP payments
What affects your land value?
I always say Markets are an attitude. Farmland is worth what someone is willing to give.
Whitaker Marketing Group – Iowa farm real estate experts
Want to know how much your farmland is worth? Click here and get started by sharing a little bit of information about your farm.