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Free Web Tools for Farmland Management


Will online farm real estate sites make appraisers as obsolete as travel agents? Not yet, but the online robots are gaining ground. They might even make human appraisers, lenders, renters and potential land buyers work faster and smarter.

That’s how Bruce Sherrick, director of the Center for Farmland Research at the University of Illinois, grades new services that promise to democratize farmland values and trends. He considers these Big Data tools “disruptors,” much like sites like Travelocity and Expedia revolutionized the travel industry 20 years ago.

The beauty of the services is that they can help you assess a potential rental farm’s crop and yield history, protest your land taxes, look for comparable sales, gauge real-time property values, or identify who owns the farm you covet — all from the comfort of your personal computer.

By logging onto these free sites, you know boundaries on every parcel, what economic rental rates are and which farm is owned by a brother and sister in Florida, Sherrick said.

Aggregating information in one spot aids the pros as well. “Farm Credit wants to get their appraisals down from 14 days to seven days, and they have. Now they’re down to about five,” Sherrick quipped. “But with these tools, I can appraise all of Illinois in about eight seconds.”

Jackson Takach, an economist for Farmer Mac in Washington, D.C., toys with the online tools to watch farmland trends in his hometown and to monitor how the agency’s $18 billion farm mortgage portfolio is faring.

“There’s a staggering amount of information out there now,” Takach agreed. The valuations aren’t perfect, but most are within reason, he said. “As a land buyer, there’s less risk when investing that you’ll get a lemon.”

Three unique ag real estate websites — Granular’s AcreValue.com, Peak Soil Indexes’ AccuAcre.com and WhatsMyFarmWorth.com — are all in various states of construction and offerings. They all aim to deliver site-specific information on soil quality, crop history, yields and — in some locations — rough estimates of appraised values.

With computers doing the calculations, you’ll get impartial estimates, the site developers reckon, not gauges of what a farm might bring when neighbors launch a bidding war. But they are still works in progress. If you live outside the core Corn Belt — Indiana, Illinois, Iowa or Minnesota, for example — online sites can tell you a lot about your soils and yields, but not about a lot about specific land sales and values yet. They are also handicapped in that only 1% of farms trade hands in arm’s-length transactions each year, so establishing values down to some county levels can be difficult.

Don’t expect identical appraisals from all three services, because they all apply their own proprietary formulas to crunch the numbers. AcreValue bases its assessments on expert opinion surveys, tweaked by their own algorithms. AccuAcre, an offshoot of the Peak Soil Indexes, bases estimates on actual arm’s-length sales, compiled from county records. It claims to be more accurate on what’s actually selling and is also updated at least monthly. WhatsMyFarmWorth bases values on a rough cash flow estimate of each parcel, based on past yields and current prices.

One downside is that none of the services account for land improvements such as drainage tile, irrigation or a change in use. When appraisers at Louisville-based Farm Credit Mid-America checked on a farm converted to a sand mine on one of these online sites, it was appraised as cropland based on its soil quality and slope.

While not meant to replace appraisers per se, each service offers powerful tools to help assess fair cash rents and purchase prices on a real-time basis. They are also responding to a growing number of institutional owners like pension funds, insurance companies and real-estate investment trusts who need impartial and timely information to report to stockholders.

Real-time data should also appeal to portfolio managers like farm lenders or real estate investment trusts who report to stockholders at least quarterly. “There aren’t too many publicly-traded investors who want to mark-to-market the value of their portfolios only one time a year,” says Paul Kanitra, president and founder of Peak Soil Indexes. When farmland markets are reversing, as they are now, a three- or six-month delay could seriously erode property values in multi-billion dollar portfolios, he said.

Here’s a quick rundown of three real estate sites worth watching:

  • Granular’s AcreValue.com is the pioneer in this category. It publishes soil and cropping information on 46 states, but currently estimates land values only for Iowa, Illinois, Indiana and Minnesota. More states and cash rent estimates are likely to come in the future.The service marries information from USDA’s National Cooperative Soil Survey (which measures the productive capacity and slope of underlying soils); water holding capacity; state productivity indexes; the National Agricultural Statistics Services’ Cropland Data Layer (which predicts land cover based on satellite imagery of crops planted on actual fields); the Farm Service Agency’s common land unit boundaries; as well as public real estate survey data, which indicates land value trends. For example, when DTN plugged in a specific farm in Black Hawk County, Iowa, it spit out the field size, the state Crop Suitability Rating 2, which was 85 out of 100, for an average value of $10,002 per acre.One new feature since DTN reviewed AcreValue last January is the addition of Platt Book information. Now you can identify the legal owners of any specific farmland parcel in the U.S. without trudging to the county courthouse. (With so many trusts and limited partnerships obscuring ownership, however, the legal reports may not always help: While locals know that Madonna owns a horse farm in Bridgehampton, N.Y., for example, you won’t find her name on the Platt Book).
    Another popular improvement has been the addition of comp sales to AcreValue’s maps. For the first time, users can see what land sold over the past 2.5 years and at what price, based on public county records.
  • AccuAcre, now is in beta testing by its developer Peak Soil Indexes, which currently publishes actual sales data on Illinois, Indiana, Iowa, Minnesota, Wisconsin and Nebraska (DTN Grains Pro subscribers can find new charts weekly on the Farm Finance page).AccuAcre’s geography is limited to Indiana at the moment, but more states will be added in the first half of 2017. It offers a free version for the general public and a newly launched fee-based professional version designed for batch analysis by appraisers, assessors, investors and realtors. When fully operational, that service will run $3,200 per year.Like AcreValue, it estimates a value for individual parcels. But in addition, it lets you compare that property to other benchmarks, such as averages for the state or county or alternative financial investments.
    With AccuAcre’s free search for Indiana, for example, you get a chart of state, district and county index prices, so you gain a feel for what direction the market is headed. In addition, you get a Peak Soil Indexes estimated value for any farmland parcel five acres or greater. Included in that are number of acres, tillable land per parcel and a soil rating from the National Commodity Crop Productivity Index (NCCPI).

    For example, when you click on a specific farm in Carroll County, Indiana, you see a chart estimating the county’s average farmland prices running back to 2010. Currently, AccuAcre says land is selling for an estimated $6,295 per acre (average NCCPI rating 75.5, average corn yield 157.2 bushels per acre and soybeans 54.2 bpa), but peaked back in 2014 at over $6,800 per acre. You can also stack up specific properties to see how they compare to the county average in land quality and sales value.

    Realtors like Howard Halderman, president of Halderman Real Estate Services, Wabash, Indiana, said his firm uses AccuAcre to screen what a new listing would trade for. “It’s not an appraisal, but we look to see if it’s $8,000 ground or $5,000 ground, based on soil quality. It’s good for an initial review of the property what it might be worth,” he said. “In agriculture, there is no multiple listing service and no one-stop shop to see what land has been selling for across the state of Indiana. Unless you’re Farm Credit or Halderman Real Estate, where else can you go to get this information?”

  • WhatsMyFarmWorth is a joint venture between Iowa-based realtor Peoples Company and AgSolver, an agronomic data and simulation company located in Ames, Iowa. It launched in January, primarily as a rough cashflow-based formula to help potential buyers and sellers establish what a farm might be worth based on its profitability, the company said. Currently, WhatsMyFarmWorth estimates farmland values and rents in Iowa and 14 states based on a farm’s actual field boundaries, soil type and historical productivity. The service then calculates farm profitability using five-year average yields for those soil types and standard university budgets.The formula isn’t as robust as those used by its competitors, but in states like Missouri where land transactions are a virtual secret, it does help non-professionals establish some base value to their property.Steve Bruere, president of Peoples Company, believes aggregation can raise the bar on intelligence gathering for ag real estate. With the lack of a multiple listing service in agriculture, his staff still must track 212 real estate websites on a weekly basis in Iowa alone, then weed out errors such as on field boundaries or other legal issues.
    “None of these online valuation tools are perfect,” Bruere said. “But once you’ve used them, you’ll know far more about a farm than you did before.”

Source: AgFax

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