Estimate what farmland is worth from its rent-earning power and soil quality. The income-capitalization method and a soil-productivity adjustment give you a defensible value per acre and hectare.
Enter acreage, soil productivity index (0-100), improvement factor (irrigation/drainage), annual rent per acre and capitalization rate. The tool outputs income-based value, soil-adjusted value, per-acre and per-hectare value.
✓ Expert Reviewed: This calculator and its content have been reviewed by agricultural experts. Formulas are based on standard extension service recommendations and the Farm Financial Standards Council. For site-specific advice, consult your local agronomist or extension agent.
Enter the acreage, a soil productivity index (0-100, use your county's CSR2 or similar), an improvement factor (1.0 average; 1.15-1.25 irrigated/drained), the typical annual rent per acre, and a capitalization rate (typically 3-5%). Click Calculate.
About
Income Approach: Value = Annual Rent ÷ Cap Rate. Soil factor = 0.5 + (CSR/100)×1.0, spanning 0.5 (poor) to 1.5 (top). Adjusted value = income value × soil factor × improvement factor. For 160 acres, $220/acre rent, 4% cap: income value = $35,200 ÷ 0.04 = $880,000 = $5,500/acre. With soil 75 → factor 1.25, improvement 1.0: soil-adjusted = $1.1M. Value/ha = $5,500×2.471. Common mistakes: using cap rates too low (3% inflates value), ignoring location, and treating rent as capital gain.
Farmland cap rates are typically 3-5% in the US, reflecting low risk and steady demand. Lower rates imply higher value; use a rate comparable to recent land sales in your county, and remember that rents and rates move inversely.
CSR2 (Comprehensive Soil Rating, 2.0) is a soil productivity index used in Iowa and neighboring states, 0-100. Most state extension services publish soil survey maps online; NRCS Web Soil Survey also maps soil productivity for free.
Irrigated land often sells at a large premium over dryland because yield and income are far more stable. The improvement factor of 1.15-1.3 captures this. The premium depends on water rights reliability and pumping costs.
They should bracket each other but rarely match exactly. Income approach reflects what the land earns; market value reflects what buyers recently paid. If income value is far below recent sales, buyers may be speculating or valuing non-farm uses (development, hunting).
No. Lending and legal transactions require a certified appraisal. This tool is for quick negotiation anchors and sensitivity analysis — adjust the soil index, rent and cap rate to see how value moves.