K-State American Farmland Dashboard version 1.08.07.2022.
Historic farmland values are of interest to farmers, landowners, lenders, tax professionals, and policy makers. An index of farmland values (using the “ag land including buildings asset value per acre” data from USDA NASS) can be used to estimate farmland value for a given year using a known value for the farmland from another year. In other words, if the value of farmland is known in any year, a value can be estimated for any other year since 1950 with the farmland value index.
These indexes can be used to estimate farmland value for a given year using the current farmland value. For more details, click on links for Estimating Farmland Values Based on Historic Index Numbers factsheets in Arkansas and Kansas. The Estimating Step-up Basis Guide goes deeper and describes how to use the farmland value index so that landowners and their advisors can estimate potential tax liability in their respective location (2nd tab on the left has an interactive calculator).
Estimated farmland values do not substitute for land appraisals or comparative sales; and may deviate from true market value for any number of reasons including land improvements, buildings and facilities, pressure from development and urban sprawl, mineral rights, and previous farm production management practices. It is recommended that tax professionals and rural property professionals be consulted.
Data source:
USDA NASS. QuickStats. http://www.nass.usda.gov/Quick_Stats/
Supporting publications:
Estimating Arkansas Farmland Values Based on Historic Index Numbers
Estimating Kansas Farmland Values Based on Historic Index Numbers
Estimating Tax Liability Using Stepped Up Basis
Originally created by Emrah Er
Maintained by Terry Griffin
Enter Values
Results
Index Value from Past Year
Index Value from Current Year
Estimated Farmland Value from Past Year ($ per acre)
Description
The index for farmland values can be used to estimate land value for a past year, or estimate the value of land in the current year, depending upon available information. If the value of farmland is known in any year, the value can be estimated for any other year since 1950 using the farmland value index.
Example
Current farmland values can be estimated using past values with the following formula:
$$Farmland~V._{Current~Year} = Farmland~V._{Past~Year} * \frac{Index~V._{Current~Year}}{Index~V._{Past~Year}}$$ Example:
My relative paid $225 per acre for land in 1969 in Kansas. What is the estimated value of this land in 2015?
Using the results above, the index values for 1969 and 2015 are 25.80 and 326.43, respectively. $$Estimated~2014~Farmland~Value = 225 * \frac{326.43}{25.80}$$ The estimated value of the farmland in 1987 is $2,847 per acre
$$Farmland~V._{Current~Year} = Farmland~V._{Past~Year} * \frac{Index~V._{Current~Year}}{Index~V._{Past~Year}}$$ Example:
My relative paid $225 per acre for land in 1969 in Kansas. What is the estimated value of this land in 2015?
Using the results above, the index values for 1969 and 2015 are 25.80 and 326.43, respectively. $$Estimated~2014~Farmland~Value = 225 * \frac{326.43}{25.80}$$ The estimated value of the farmland in 1987 is $2,847 per acre
Enter Values
Results
Index Value from Past Year
Index Value from Current Year
Estimated Current Farmland Value ($ per acre)
Description and Disclaimer
The index for farmland values can be used to estimate land value for a past year specifically in the case of estimating
value for step-up basis calculations. The scenario is that farmland was inherited in the past and the current owner is
considering selling the land in the current year. The assumption is that the farmland was appraised in the current year,
and the value change since inheriting the farmland is desired to be estimated.
Disclaimer
These estimates are based on nominal values and are not adjusted for inflation or purchasing power. Although estimates calculated here are useful for estimating the value of farmland at another point in time, the index provides only a single piece of information to include in any decision making process. Estimated farmland values do not substitute for land appraisals and may deviate from true market value for any number of reasons including land improvements, buildings and facilities, pressure from development and urban sprawl, mineral rights, and previous farm management practices.
Disclaimer
These estimates are based on nominal values and are not adjusted for inflation or purchasing power. Although estimates calculated here are useful for estimating the value of farmland at another point in time, the index provides only a single piece of information to include in any decision making process. Estimated farmland values do not substitute for land appraisals and may deviate from true market value for any number of reasons including land improvements, buildings and facilities, pressure from development and urban sprawl, mineral rights, and previous farm management practices.
Example
Taxable value can be estimated using the following equations. To estimate the change in value since inheritance, the value of the land during the year of inheritance must be estimated. The ratio of the inheritance year index to current year index is multiplied by the current year appraisal.
$$Taxable~value = Farmland~value_{Current~Year} - Farmland~value_{Inheritance}$$ $$Farmland~value_{Inheritance} = Farmland~value_{Current~Year} * \frac{Index_{Inheritance~Year}}{Index_{Current~Year}}$$ Example:
Kansas farmland was inherited in 1969 with no appraisal at that time. In 2018, the land appraised at $2,500 per acre. What was the appreciated value since 1969?
Kansas index values for 1969 and 2018, 25.80 and 294.59, respectively, can be plugged into the second equation. What was the approximate value of this land in 1969?
$$Estimated~1969~Farmland~Value = 219 = 2,500 * \frac{25.80}{294.59}$$ The estimated value of the farmland in 1969 was $219 per acre.
Using the first equation, the taxable value is the difference in land value since 1969, so the $219 is subtracted from $2,500 for $2,281 per acre.
The estimated change in farmland value since 1969 is $2,281 per acre; the value that potential tax liability will be based
$$Taxable~value = Farmland~value_{Current~Year} - Farmland~value_{Inheritance}$$ $$Farmland~value_{Inheritance} = Farmland~value_{Current~Year} * \frac{Index_{Inheritance~Year}}{Index_{Current~Year}}$$ Example:
Kansas farmland was inherited in 1969 with no appraisal at that time. In 2018, the land appraised at $2,500 per acre. What was the appreciated value since 1969?
Kansas index values for 1969 and 2018, 25.80 and 294.59, respectively, can be plugged into the second equation. What was the approximate value of this land in 1969?
$$Estimated~1969~Farmland~Value = 219 = 2,500 * \frac{25.80}{294.59}$$ The estimated value of the farmland in 1969 was $219 per acre.
Using the first equation, the taxable value is the difference in land value since 1969, so the $219 is subtracted from $2,500 for $2,281 per acre.
The estimated change in farmland value since 1969 is $2,281 per acre; the value that potential tax liability will be based
Enter Values
Results
Index Value from Past Year
Index Value from Current Year
Estimated Farmland Value at Inheritance ($ per acre)
Estimated Taxable Value ($ per acre)
Description
The index for farmland values can be used to estimate land value for a past year, or estimate the value of land in the current year, depending upon available information. If the value of farmland is known in any year, the value can be estimated for any other year since 1950 using the farmland value index.
Example
Current farmland values can be estimated using past values with the following formula:
$$Farmland~V._{Current~Year} = Farmland~V._{Past~Year} * \frac{Index~V._{Current~Year}}{Index~V._{Past~Year}}$$ Example:
My relative paid $225 per acre for land in 1969 in Kansas. What is the estimated value of this land in 2015?
Using the results above, the index values for 1969 and 2015 are 25.80 and 326.43, respectively. $$Estimated~2014~Farmland~Value = 225 * \frac{326.43}{25.80}$$ The estimated value of the farmland in 1987 is $2,847 per acre
$$Farmland~V._{Current~Year} = Farmland~V._{Past~Year} * \frac{Index~V._{Current~Year}}{Index~V._{Past~Year}}$$ Example:
My relative paid $225 per acre for land in 1969 in Kansas. What is the estimated value of this land in 2015?
Using the results above, the index values for 1969 and 2015 are 25.80 and 326.43, respectively. $$Estimated~2014~Farmland~Value = 225 * \frac{326.43}{25.80}$$ The estimated value of the farmland in 1987 is $2,847 per acre
Enter Values
Results
Index Value from Past Year
Index Value from Current Year
Estimated Current Farmland Value ($ per acre)
Taxable Value ($ per acre)
Choose state for data
Choose Base Year for Index
Description
The index for farmland values can be used to estimate land value for a past year, or estimate the value of land in the current year, depending upon available information. If the value of farmland is known in any year, the value can be estimated for any other year since 1950 using this tool.
Example
The farmland value for a past year can be estimated using the following formula:
$$Farmland~V._{Past~Year} = Farmland~V._{Current~Year} * \frac{Index~V._{Past~Year}}{Index~V._{Current~Year}}$$ Example:
Current land values are $2,000 per acre in Kansas. What was the approximate value of this land in 1987?
Using the results above, the index values for 1987 and 2015 are 59.39 and 326.43, respectively. $$Estimated~1987~Farmland~Value = 2,000 * \frac{59.39}{326.43}$$ The estimated value of the farmland in 1987 is $364 per acre
$$Farmland~V._{Past~Year} = Farmland~V._{Current~Year} * \frac{Index~V._{Past~Year}}{Index~V._{Current~Year}}$$ Example:
Current land values are $2,000 per acre in Kansas. What was the approximate value of this land in 1987?
Using the results above, the index values for 1987 and 2015 are 59.39 and 326.43, respectively. $$Estimated~1987~Farmland~Value = 2,000 * \frac{59.39}{326.43}$$ The estimated value of the farmland in 1987 is $364 per acre