Tips for Land value comparisons

The Iowa Corn Suitability Rating (CSR) system was developed by Iowa State University in the early 1970s as a way to measure potential soil productivity based on soil profile, slope characteristics and weather conditions. It is an index ranging from 0 to 100 with CSR values of 100 being the most productive.

Knowing your farm’s Corn Suitability Rating index (CSR2) provides you with valuable insight into your soils ability to produce crop. The CSR ratings were updated in 2013 to CSR2, a tool used in setting cash rental rates and computing a farm’s sale value. The new system is more consistent when calculating your values.

DETERMINING LAND VALUES

Have you ever shopped for a new or used vehicle and observed the vast difference in the price even when each vehicle appears to be the exactly the same? Same make, model, year, color,…yet thousands of dollars separate the models. Similar to vehicles, selling farmland can be confusing. It would seem a farm rated at an 87 CSR would be of similar value to the land down the road who’s farm is rated  85 CSR, yet these two farms may sell for thousands of dollars per acre apart.

LOCATION AND FARMABILITY

Things that may cause differences in farm values result in LOCATION and FARMABILITY of your land. One farm may have a waterway with CRP boundaries which cut through the middle of the land and divide it in two sections leaving this section accessible only by crossing the waterway.  Another farm may be an odd shape with only one entry point, compared to a perfect square with two points of entry. Terraces on steeper slopes may help with erosion and help getting more from your land, however; the nuisance for a farmer will effect value. Location and Farmability play a vital role in understanding the productivity level of farm operations and the price a farmer is willing to pay as they value their time and investment.

The following may justify a higher or lower than average dollar per acre of value when selling or renting:

•Small size or unusual shape of fields

•Terraces or creeks that affect the time it takes to plant and harvest crops

•Difficult or restricted access to fields

•High or low fertility levels or pH index

•Existence of contracts for growing seed or specialty grains, or manure application

•Above-average local grain prices due to proximity to biofuel plants or feed mills

•USDA program variables, such as crop bases and assigned yields

Iowa State Extension Office: 

 Alejandro Plastina, Ann M. Johanns, and Craig Welter