Editor’s note
See the County Land Value Estimator spreadsheet (XLSX) for related information.

Ryan Milhollin
Assistant Extension Professor, Agricultural Business and Policy

Juo-Han Tsay
Assistant Extension Professor, Agricultural Business and Policy

Individuals and businesses often need an estimate of the value of a piece of land. A properly done appraisal provides the most accurate estimate of a piece of land’s value. Appraisals attempt to estimate value from comparable sales. Comparable sales should be nearby, have sold recently and have similar characteristics.

It is not always feasible to get an appraisal on a piece of land, particularly when a historical value is sought. A historical land value is often needed to calculate taxes and settle estates. When appraisals are not feasible, estimates from the U.S. Department of Agriculture (USDA) data might be an acceptable option.

USDA agricultural land values

The National Agricultural Statistics Service of the USDA collects and reports information on the market value of agricultural land and buildings. The Census of Agriculture is conducted every five years and seeks responses from every farmer. The published Censuses report the market value of farmland, including buildings, for each county in the year the information was gathered. Table 1 provides the average market value of farmland, including buildings by Missouri county for past Censuses of Agriculture.

The USDA updates the state average market value of farmland, including buildings every year. This update relies on surveying a subset of farmers, select Realtors and others who have direct knowledge of land sales in each state. The published results do not have county values. The annual survey reports values for these four land classes: 1) all cropland, 2) non-irrigated cropland, 3) irrigated cropland, and 4) pastureland. These land classes are not reported on a county basis in the Census of Agriculture. Table 2 provides the average market value of these agricultural land classes for the state of Missouri since 1950.

Understanding USDA data

Understanding some characteristics of the USDA agricultural land value estimates is important for individuals and businesses wishing to use them for business purposes. From 1850 to 1996, the USDA annually reported for each state a single value estimate called farmland, including buildings. Since 1997, the USDA has reported a state value by various agricultural land classes without buildings.

Every five years, in the Censuses of Agriculture, USDA reports farmland, including buildings, for each county. Houses, barns, sheds and other buildings on the land are included in the reported asset value. This value merges all types of land, such as irrigated, non-irrigated and pastureland, together.

The USDA estimates are for either an entire county or the entire state. However, the value of land can vary considerably within any one county. More productive land is worth more than less productive land. Cropland is worth more than pastureland. Land adjacent to certain highways may be worth more than land farther from those highways. None of these factors are reported in the county and state estimates of land and buildings. For this reason, the estimate may not provide an acceptable value for an individual piece of land.

The reports provide a consistent record of trends in land values. Since the methodology is consistent over time, the annual changes reported are likely to reflect what happens on individual pieces of land. However, changes over time may cause the values of certain pieces of land to differ from the USDA reported average. For example, land 20 miles out of city limits may have been considered for only agricultural purposes in 1970. By 2022, that land may be much closer to city limits and people want to purchase that land for a house site. That may drive its value much higher than the state or county average.

The Census of Agriculture values are most useful for estimating specific land values because they provide county level estimates. The annual survey data of state land values by type is helpful for observing trends in land values in the years between Censuses. The reported values for various types of agricultural land in Missouri are very highly correlated (correlation coefficient of .95 to .99) with the reported value for farmland, including buildings. A correlation of 1 indicates perfect correlation.

Since the county value is an average for all land in the county, it most likely reflects the value of an individual piece of land to the extent that piece of land is like the county land types. For example, if a county contains mostly cropland and the land under consideration is mostly cropland, the county value may fit well. But if the land under consideration is all pastureland, the county value will likely overvalue that particular piece of land.

Estimating historical values

When an historical value estimate for a particular piece of land is needed, it is advisable to start with the county level data reported in the Census of Agriculture. Because county data are reported every five years, methods of estimating the value in intervening years have been developed.

If the percent change in the annual reported state value for farmland, including buildings accurately reflects the change for land in each county, this percent change can be applied for years when no county level data exist. The steps below indicate how a county level estimate for land value could be obtained for any year.

Step 1: Find which Census of Agriculture immediately precedes the year for which you are interested in finding a value.

Step 2: Locate the value of ag land in the county in that Census data (see Table 1).

Step 3: Locate the values for ag land in Missouri for the years between the year of the Census and the year of interest (see Table 2).

Step 4: Determine the percent change in state land value between the two years. Percent change = (ending year value ÷ beginning year value) – 1.

Step 5: Increase the county value from step 1 by the percent change from step 4. County value in the desired year = county value in previous Census × (1 + percent increase between the desired year and the previous Census of Ag value).

For example, if you wanted to know the value of ag land in Adair County in 2010, perform the following steps.

Step 1: The 2007 Census is the nearest Census prior to the year 2010.

Step 2: The value reported for Adair County in the 2007 Census of Agriculture is $1,862 (from Table 1).

Step 3: The Missouri state value for ag land in 2007 is $2,170 and in 2010 is $2,270 (from Table 2).

Step 4: The percent change is 4.6% (= 2,270 ÷ 2,170 – 1).

Step 5: The estimated value of land in Adair County in 2010 is $1,948 (= $1,862 × 1.046).

Accounting for land quality differences

A more accurate estimate than the average county land value for a previous year is occasionally desired. This can occur when the land in question obviously differs from the average county land value. Perhaps proximity to a town, presence of irrigation, higher productivity land or some other characteristic makes modifying the county level value important.

The estimate of county land value can be modified to account for expected value differences by following the steps below.

Step 6: Obtain an appraisal for the market value of the land. An appraisal done at any time can be used but more recent appraisals are best. The value of recently built structures should be removed from the appraisal so that only land valuation is being considered.

Step 7: Estimate the county value of the land for the year in which the appraisal was made. This would be accomplished by Steps 1-5 above.

Step 8: Estimate the percent difference between the appraisal value and the estimated county land value. Percent change = (appraisal value ÷ county value) – 1.

Step 9: Modify the county value for the year of concern (from Step 5) by the percent difference (from Step 8). Adjusted land value = county value of land × (1+ percent difference between the appraisal value and the estimated county value).

Spreadsheet tool

The County Land Value Estimator spreadsheet (XLSX) was developed to accompany this guide. This tool contains the data found in tables 1 and 2 of this guide and provides a tool to estimate land values. Users can enter the county year of interest to receive estimated county values. County values can be modified to more closely approximate the value of a particular piece of land.

Table 1. Average market value (in dollars per acre) of farmland and buildings for Missouri counties.

Table 2. Missouri state average values for various classes of agricultural land (in dollars per acre).

Original authors
Ronald L. Plain and Joyce White