Data in agriculture: it’s a topic growing increasingly important as more farmers and landowners take advantage of it to increase yields and productivity. Amid concerns about privacy, security, and data ownership & governance, everyone is looking to answer the question: how do we get the most value of our agriculture data? 

While much of the conversation around data in agriculture centers on farm and field performance, it can also be a powerful tool for landowners to optimize their land lease practices. Here are some of the ways to make that happen. 

What tools do farmers and landowners have to measure & analyze data in agriculture? 

As ag technology becomes more advanced—particularly in the areas of sensors, satellites, and surveillance—the insights available to farmers and landowners is growing exponentially. Let’s briefly look at the primary ways in which this data is captured and analyzed. 

Satellites have been capturing images of farm fields for decades, leveraging NDVI (Normalized Difference Vegetation Index), NDRE (Normalized Difference Red Edge Index), and NDMI (Normalized Difference Moisture Index) to gain detailed insights into farm fields.

However, as machine learning (ML) and artificial intelligence (AI) become more adept at analyzing this imagery, the insights available from these data can be made more relevant and address specific questions. This can include agronomic concerns, but also details on field performance, security, and land management practices. 

What’s more, AI and ML algorithms can correlate field-specific data with other sources, like weather patterns, to give farmers the best information to make the best decisions for their field. 

As network connectivity spreads across Rural America, the Internet of Things (IoT) is becoming more popular among farmers and farmland owners. Some of the more relevant use cases include: 

Crop management IoT devices gather data on plant health and leaf moisture to detect diseases quickly and adjust irrigation schedules

Soil moisture sensors help agronomists determine water levels and make necessary irrigation adjustments

Electrochemical sensors analyze pH, soil nutrients, and other parameters to measure soil fertility and drive seed planting and fertilizer application decisions

IoT sensors attached to animals monitor health conditions, log activities, and forestall potential infections

In addition to satellite imagery, unmanned aerial vehicles (UAVs) can capture data on farm performance. Often these drones feature sophisticated measurement equipment, including ultrasonic echoes, GPS, and lasers. 

While most farms use drones for seeding and crop spraying, they also have the ability to gather data on the farm, including high-resolution data on plant conditions, helping you to better detect stressed areas and potential infections. This is especially helpful for farmers who manage multiple, geographically distant operations. 

Most data coming in from sensors is unstructured and, thus, unusable and requires processing and analysis to become useful. Fortunately, there are a growing number of robust data platforms that not only analyze data in agriculture, but surface the insights farmers need to make the most critical decisions. 

How data in agriculture can strengthen the farmer-landowner relationship

Data in agriculture, while certainly effective at making farms more productive, can also help landowners optimize their land leasing practices in three main ways. 

As farmland values increase, landowners are responsible for increased carrying costs: property taxes, insurance, liability, etc. Because of the way cash rental agreements are currently negotiated—namely, using USDA published figures based on farmer self-reporting—tenants indirectly set their own rates. 

To account for increased carrying costs, landowners need to renegotiate their cash rental rates. This requires real-time data on the specific piece of land that can account for above-average productivity, highly profitable crops, above-average soil and land quality, and other factors that apply to that specific piece of land. 

This is where CommonGround’s CashRenstimate tool comes into play. It’s an objective measure of a land’s true value, taking into account over fifty demographics and analyzing them according to a multiple linear machine learning algorithm which finds the most meaningful variables and weighs them more heavily than the others. 

For example, North Dakota produces more canola and winter wheat than Illinois. As such, canola and winter wheat weigh more heavily in the North Dakota CashRentstimate than they would in Illinois.

This approach, powered by data in agriculture, provides landowners with an objective, up-to-date picture of their land’s true value, which they can bring into negotiations and get fair value for their land. 

As mentioned above, real-time farm data can be correlated with external factors. For landowners in crop share agreements, understanding these relationships can be key to predicting their potential of their land to generate revenue into the future, which is important when renewing leases.

Currently, the agriculture market faces a number of challenges that can impact crop prices:

Increasing interest rates until the latter half of 2024

Inflation rates that, while slowing, are still concerning (2.1% domestically and 5.4% abroad)

Uncertain food price outlook, with projections ranging from a potential 5.5% increase to 7.8% decrease

Unstable geopolitical conditions as conflicts in Ukraine and the Middle East continue

With advanced market analytics correlated with field performance data, landowners can plan more strategically the crops they want on their land in future season, future lease agreement terms, and even whether they want to continue on with the same farmer. 

IoT devices, as mentioned above, give farmers access to more data than before and help them adjust their performance accordingly. Landowners, however, can also use this real-time data to gain insights into farmers performance and, if necessary, make suggestions for adjustment.

For instance, if a soil sensor indicates a higher pH level than the agreed upon fertilizer should cause, landowners can check on the farmer’s planting decisions and verify that they’re remaining in compliance with the agreement.

Because IoT sensors enable this insight in real time, owners can step in and make changes before they balloon into larger problems. 

Final thoughts on the use of data in agriculture

Data in agriculture can be a powerful tool, but only when applied to relevant questions. While the industry focus is mainly on use of data to improve crop performance and productivity, there are multiple use cases that enable landowners to strengthen their operations and maximize their land lease agreements. 


If you’re looking to increase the value of your land, check out the CommonGround marketplace, and we’ll show you what a fair, objective rental rate looks like.

Data in agriculture is a powerful tool for the farmer, but also the landowner. Here are some ways to leverage it to optimize your land lease practices.

How Landowners Can Leverage Data in Agriculture to Optimize Land Lease Practices

Non-operating landowners own almost 40% of the agricultural land across the U.S.  In some regions, a much higher percentage of land is owned and leased out by the non-operators.  This group is vitally important to farmers and ranchers who lease the land and produce the food and fiber that sustains the world.  Today’s landowners, active farmers and ranchers along with the non-operating owners, are faced with a multitude of decisions points concerning their farms.  Some are financial, some are operational, and some are conservation and sustainability focused.  Many decision needs remain the same year in and year out while others are new to owners.

Each generation of landowner, active producers and non-operating alike, face decisions about succession of the ownership of their land.  As agricultural land transfers to the next generation of family, there are usually more individuals involved in the ownership structure and decision making.  Planning for succession and the decisions affecting the transfer are becoming more critical because of the increased value of the underlying asset and the growing importance of food and fiber production for the world’s population.  Legacy and financial reasons come into play for each generation of landowner as they decide whether to keep the farm, who will farm it, and if they should sell.

New to succession of the farm are alternative methods of ownership and transfer.  Historically, land has been owned by individuals or in joint tenancy with the succession plan delineated in a will.  Ownership in a revocable trust has become very popular as one of the advantages of a trust is that it names a successor trustee to carry on management of the asset. 

Newer methods of land ownership and transfer include monetization of the farm into shares or units which can then be divided and passed to the next generation.  One means is to own shares in a REIT (Real Estate Investment Trust) or similarly in a DST (Delaware Statuary Trust) which are treated much like land for estate and transfer purposes except that it is shares that are passed down instead of a specific farm.  Investors can now buy into a farm partnership entity and own a share of a farm jointly with others.  These shares or units can be passed down or gifted to others. 

Landowners are now being faced with a new set of challenges and opportunities that create another set of decisions to be made with potential short and longer-term ramifications.  Longer term questions for a landowner include whether to enroll in carbon sequestration programs or try organic production on their farm.  Decisions about major improvements such as conservation structures or drainage tile, enrolling in multi-year conservation programs, or building grain storage all have longer-term effects on the value of the farm.  

Landowners make other decisions usually on an annual basis.  Determining who will rent the farm including lease terms and rental rates are important decisions made each year or every few years.  Depending on the type of lease utilized to rent to the farmer, landowners may need to look at insurance needs, inputs and  costs, pricing of grain, and how to use technology on the farm. 

Just like producers, non-operating landowners face important decision points around the land they own.  How the farm is owned, how it is operated, how to balance short-term changes with long-term benefits, and ultimately, how to leave a better farm to the next generation of owner are important decisions that need to be made.  Challenges abound as always, but new opportunities are here for landowners. 

Explore the crucial role of non-operating landowners in the U.S. agricultural landscape, their decision-making challenges, succession planning dilemmas, and emerging trends in land ownership and transfer methods.

Navigating Agricultural Land Ownership: Challenges and Opportunities for Non-operating Landowners

Hunting private land is often a better choice than public. There’s more control over land use, reduced competition, and often leads to a better hunting experience. But there’s one hurdle to hunting on private land that dissuades many tenants: cost.

Thankfully, if you want to realize the benefits of a private hunting lease, there are several strategies to alleviate those costs.In this article, we’ll walk through these strategies to help you figure out which best fits your hunting situation. 

There are a number of reasons for hunters to lease private ground. Public land, while a more accessible alternative, has some drawbacks: crowded conditions, limited control over the hunting area, and various state and local regulations.

That’s why private hunting ground is attractive to many hunters. Common benefits of private hunting ground include:

More control of the hunting experience—set your own rules, manage wildlife populations, etc. 

Less competition, as fewer hunters have their sights set on the land, increasing the odds of a successful hunt

Managed wildlife populations, which provide a more predictable and higher quality hunting experience

Although hunting private land often comes with additional responsibilities, like conservation and wildlife management, for many hunters the benefits outweigh the risks. 

4 strategies to make private hunting land more accessible

Despite the advantages of private hunting land, one of the major challenges of this approach is cost accessibility. Private land requires a private lease, which often lies outside of most hunters’ budgets. 

Fortunately, there are many ways to make this option more accessible and cost effective. Here are four of the most common. 

Hunting clubs are a popular approach to sharing hunting expenses, including private land leases. These members-only organizations offer specific perks and incentives to their members, including exclusive gatherings, activities, dinners, meetings, and events. 

Often landowners will lease their land out to particular hunting clubs, granting them exclusive use of the land. This means that members only have to pay dues to gain access to certain plots of land. In other words, hunting clubs have built-in cost sharing mechanisms. 

But the benefits of hunting clubs go beyond cost sharing: 

Access to land that may otherwise be restricted, as many landowners lease exclusively to certain clubs

No insurance costs for shooting on property, as these costs are covered by the hunting club

Built-in opportunities to make lasting friendships with like-minded individuals 

Additional support in creating a safe hunting environment, accessing and maintaining quality land

A key consideration with hunting clubs is that often they will have their own land use restrictions. That’s why it’s important to understand those restrictions and choose a hunting club accordingly. Some common areas to examine are:

Club meetings and communication expectations

In addition to formal hunting clubs, hunters have the option of banding together with friends to share hunting costs. Group hunting trips are a great way to split costs without making the time or monetary commitment often required by hunting clubs.

That said, there are some logistics you’ll have to handle yourself if you and your friends organize a trip on your own:

Finding and leasing the land, including negotiating with the landowner on the rental rate and other elements of your contract

Handling lodging for all members of your party

Looking up state and local laws and regulations to maintain compliance, including safety laws and shot requirements

Carrying necessary insurance and ensuring it applies to all members of your party

All of these will be considerations when you lease hunting land individually, but become more complicated when you’re trying to handle a group of people. Upfront planning and clear communication among all members of your party are key to making this work. 

Another option is to work with a hunting outfitter. These specialists organize and facilitate hunting trips for both individuals and groups, offering services such as guiding, lodging, meals, transportation, and, in some cases, equipment rental. 

Hunting outfitters are most common in areas with abundant wildlife populations. Like hunting clubs, they’ll sometimes have exclusive access to private land or partnerships with landowners.

In terms of cost savings, hiring a hunting outfitter may seem counterintuitive. While, yes, it can seem more expensive, in the end it can be most cost-effective for hunters who don’t want the long-term commitment of a lease. Most outfitters offer package deals for a fixed price, which can often offer cost savings

Some other advantages of a hunting outfitter include:

Guidance and expertise on local terrain, wildlife behavior, and hunting techniques

Access to private land in remote areas with high-quality hunting opportunities

Convenience in handling all logistics associated with the hunt, including lodging, meals, transportation, and permits

Game variety, as outfitters offer guided hunts without the need for multiple leases

Another way to reduce hunting costs is to find new landowners whose land may not be as competitive and, as such, will cost less to lease. This requires going outside established circles and finding new landowners looking to break into the hunting ground market.

To find land available for hunting, you can look at online marketplaces, like CommonGround, that offer instant access to listings across the U.S. this so you can plan both local hunting and trips.

Final thoughts on making private hunting land more accessible

Private hunting ground can be costly, but it doesn’t have to be. By adopting creative solutions to leasing private land, you can enjoy your next hunting trip without taking on a heavy financial burden. 

To compare the options listed above, you need information. It does no good to decide between an outfitter or splitting a lease with friends if you don’t know the costs. The CommonGround marketplace gives you a good baseline of land rental rates in your area, so you can start planning your next trip today. 

Check local hunting ground listings in the CommonGround marketplace here.

Private hunting land can be expensive to lease. Here are four cost reduction strategies to create a more affordable & accessible hunting experience.

4 Cost Reduction Strategies for Leasing Private Hunting Land

The production capabilities of American agriculture are amazing!  Much of what makes farmers in this country productive and efficient was on display at the recent Commodity Classic trade show.  For example, the latest and largest models of combines can now harvest more bushels of corn in one hour than I could harvest in one day 30 years ago.  Innovation in seeds, agronomic practices, equipment, and technology have propelled productivity upward over the decades.

Growth in corn yields over time is a good indicator of how the output of American agriculture has drastically improved.  The chart below from the University of Illinois’s Farmdoc Daily plots Illinois corn yields from 1870 to 2023.  A new technology of hybrid seed corn started to be used more widely in the 1940’s and better agronomic practices came into being also during the following decades to increase yields.

National corn yields followed the same trend albeit usually at a somewhat lower yield level than experienced in Illinois.  Yields remained low into the 1940’s with the country’s yield in 1943 being 32.6 bushels per acre.  The first year that the national yield broke 100 bushels per acre was 1978.  The current 2023 corn yield was 177.3 bushels per acre.

The potential for even higher yields was on display at the Commodity Classic.  The National Corn Growers Association sponsors a corn yield contest each year.  The winner in 2023 produced 623 bushels per acre (as measured on one acre) in the state of Virginia.  That is 3 ½ times the 2023 national corn yield! 

The soybean yield record for 2023 was 206 bushels per acre produced in Georgia.  That yield was four times the 2023 national soybean yield of nearly 50 bushels per acre.  Yield contest winners are utilizing all possible means to enhance yields of which many practices could someday be employed by more farmers.  The high yields achievable demonstrate the amazing potential in the crop when nurtured by the farmer and the industry.

The Commodity Classic trade show gave a good glimpse of how farmers and ag companies are striving for productivity, efficiency, and sustainability.  The large and technologically advanced farm equipment can allow a farmer to cover more acres being more efficient with time and inputs.  New biological products used to fertilize or protect crops were exhibited by numerous companies.  Sprayer technology will now allow the micro-spot spraying of a single weed saving money and chemicals.  Seed technology continues to enhance yield potential of crops grown in the grain belt.  Carbon credit companies were also present as they work to foster a new effort for sustainability.

Farming has changed in many ways since 1870 to grow to the productivity achieved today.  The basics of planting the seed and tending it till harvest have not changed as this is the necessity of producing a crop.  What has changed is the equipment, technologies, inputs, and techniques employed to raise a crop have progressed to new heights of production and efficiency. 

Explore the astounding advancements in American agriculture showcased at the Commodity Classic trade show. From record-breaking yields to cutting-edge technology, witness how innovation is revolutionizing farming practices in our latest blog post.

Unveiling the Marvels of American Agriculture

As farming operations become more data driven—soil, crops, livestock, weather, etc.—farmers have an increasing need for advanced digital tools to turn those data into valuable, actionable insights. 
However, only 25% of U.S. farms run on connected equipment, and those that do use 2G or 3G networks that telecom companies plan to dismantle in the near future, or low-band Internet of Things (IoT) networks that are complex and expensive to set up. Either way, these networks can support only a limited number of devices. 

Fortunately, device and hardware costs are dropping rapidly, enabling broader access to the technologies needed to implement connectivity and IoT in farming. This presents an exciting opportunity for farmers to make the full use of the data at their disposal and more efficiently manage their operations. 

Not only will this approach enable farmers to more efficiently manage their current farmland operations, but it will expand their opportunities by enabling them to pick up new ground. 

Top connectivity challenges facing the agriculture industry

There are two broad connectivity challenges facing the agriculture industry:

Lack of available infrastructure to enable use of connectivity in farming

Lack of strong business cases for adopting of solutions in areas where connectivity already exists

With regard to the first challenge, the gap is closing rapidly. According to McKinsey, by 2030 advanced connectivity infrastructure will cover roughly 80% of the world’s rural areas. 

As such, the challenge for the agriculture industry to face in the coming years isn’t the spread of infrastructure. Rather, it’s the adoption of value-add use cases that can justify business investment within the sector. 

What capabilities can connectivity offer the agriculture industry?

In terms of technical capabilities, there are three primary advantages connectivity offers within agriculture. Each of these capabilities can be applied to a number of use cases: 

Internet of Things (IoT). Low-power networks and cheaper sensors will enable a scaling up of connected agriculture equipment and devices, enabling precision irrigation of crops, crop and livestock monitoring, and tracking equipment use to drive maximum efficiency. 

Operational confidence. Ultra Low latency and improved connection stability enables farmers to run applications that demand reliability and responsiveness, and continually monitor their effective use. 

Near-global coverage. As low earth orbit (LEO) satellites reach their potential, even the most rural areas will have access to digitization, enabling farmers to manage geographically disparate fields in a coherent, unified manner. 

Use cases for connectivity in agriculture 

Now let’s move from technical capabilities to value-add use cases. Here are some of the ways that connectivity in agriculture can make farmers’ lives and work that much more interesting. 

Connectivity enables farmers to improve the observation and care of crops. By integrating weather data, irrigation and applications, and other systems, farmers can optimize and improve resource use, not to mention boosting yields by accurately identifying and predicting soil and crop deficiencies in real time. 

Here are some ways these applications can be realized in the field:

Soil monitoring sensors can communicate via LPWAN, directing sprinklers to adjust water and nutrient application in response to soil problems

Delivering imagery from remote corners of fields to provide early warnings for disease or pests

Smart monitoring of crops for quality characteristics to maximize revenue from crops and optimize the harvesting window

Preventing disease outbreaks and identifying animals in distress is a critical challenge large-scale livestock farmers face, especially when animals live in close quarters. A number of connected technologies, such as chips and body temperatures, can measure temperature, pulse, and blood pressure to detect illnesses earlier. 

Likewise, environmental sensors can trigger automatic adjustments in ventilation or heating in barns, reducing stress and improving animal health. 

Sensors to monitor conditions within buildings and related equipment can lead to multiple cost savings among farmers:

Monitoring warehouse and silo levels to trigger automatic reordering, reducing inventory costs

Optimizing storage conditions for inputs to increase their shelf life

Reducing energy consumption by monitoring conditions and usage of buildings and equipment

Automated predictive maintenance systems to decrease equipment repair costs and extend their life

Investments needed to achieve connectivity in agriculture

Given the benefits available to farmers through connected applications, what changes need to happen to actually make these outcomes accessible? There are three broad categories of investment to consider: 

Telco-driven deployment. Despite the challenging economics of building high-bandwidth rural networks, telcos can benefit from increased demand for their bandwidth within rural areas, especially as farmers increasingly embrace connected applications and integrated solutions.

Provider-driven deployment. Input providers are well-positioned to drive connectivity-related investments, namely due to theirs existing industry knowledge and relationships. By partnering with telcos or LPWAN businesses, they can drive the development of rural connectivity networks, then support farmers with business models that integrate connected technology and product and decision support.

Owner-driven deployment. Farmland owners, as well as the farmers leasing their land, can invest in development within their own properties. While the initial investment may seem steep, a plan to maximize ROI over a short time frame can help to justify the initial costs. However, owners are limited in what they can accomplish without broader infrastructure support. 

How connectivity in agriculture enables farmland management and expansion

We’ve already talked about how connectivity in agriculture helps farmers better and more efficiently manage the land they currently operate. However, connectivity also enables farmers to pick up new ground and expand their current farmland operation:

Freeing up the farmer from time-consuming observation and monitoring tasks, enabling them to effectively manage more land

Expanding the farmer’s potential geographic footprint, as they can monitor and manage land from afar

Maximizing the productivity of the land, thereby offsetting additional costs incurred from picking up new ground

Increased connectivity in agriculture is key for farmers who want to expand their operation without incurring more overhead. So if you want to pick up new ground, now is a great time to do it.

Check local farmland listings on the CommonGround marketplace today. 

Connectivity in agriculture can help farmers better manage their land and even pick up new ground. Here’s how the industry can help realize these benefits.

How Connectivity in Agriculture Enables Farmland Management & Expansion

With nearly 2 million farms and ranches covering almost 893 million acres in the United States, there is a plethora of data describing the people and land that produce our food, fuel, and fiber.  Seeing the numbers helps us understand agriculture production in the U.S.  Much of the information was obtained from USDA’s Economic Research Service America’s Farms and Ranches at a Glance 2023 Edition by Christine Whitt, Katherine Lacy and Katherine Lim.  Additional information can be found in National Ag Statistic Service’s Farms and Land In Farms 2022 Summary.

 The largest amount of ag land in the United States is used for pasture and grazing with approximately 350 million acres.  The thirteen most important commodity crops are raised on 250 million acres with corn, soybeans, and wheat making up 90% of the total.  In the graph below, you can see the overall changing land use trends in the U.S.

The graph below shows 170 years of changing farm size and land being farmed in the U.S.  Notice the peak in the number of farms at nearly 7 million in 1935 and the peak in the land in farms after World War II.  The decline in the number of farms has slowed in the most recent years with a diversity of smaller farms.

 The most recent data from 2022 gives us better insight into the type of operations and the farmers and ranchers involved.  For the following data, USDA classifies farm size as follows:

Small Family Farms with Gross Cash Farm Income (GCFI) of less than $350,000:

·      Retirement Farms with the operator retired but still farming on a small scale.

·      Off-Farm Occupation Farms where the primary occupation is an off the farm job.

·      Low sales with GCFI of less than $150,000.

·      Moderate sales with GCFI of $150-$350,000

·      Mid-size Family Farms with GCFI of $350,000 to $1,000,000.

·      Large Farms with GCFI of $1,000,000 to $5,000,000

·      Very Large Farms with GCFI over $5,000,000

Non-family Farms in which the operator and family own less than 50% of the business

As you can see in the table and graphic below, small family farms make up 88% of all farms in the U.S., operate 46% of the land, and generate 19% of the value of production.  Mid-size and large scale family farming operations are only 9.2% of farms, work 46.2% of the land and produce 70.9% of the value.  Note that the vast majority of farms are small operations with 82.8% of farms being retirement, part-time, or low sales.   

The following chart is interesting in that it breaks out the value of production for major farm commodities by the size of the farming operation. 

From this information, you can see that American agriculture is diverse in who is farming and ranching whether it be on a small scale or very large scale.  Farmers and ranchers across the country may be supplying local, direct to consumer markets for produce or huge commodity markets for grains and oilseeds.  U.S. agriculture encompasses it all. 

Dive into the wealth of data detailing the landscape of American agriculture. Explore the distribution of farms, land usage, and production values, revealing the diversity of farming operations across the United States.

America’s Farms & Ranches by the Numbers

Farmland values seem to be holding their strength in 2024, continuing the growth trend we’ve seen over the last four years. But the challenges the agriculture industry is facing—high inputs, lower commodity prices, global disruption—why is the market remaining so bullish? 

High commodity production yields across all major crop categories in 2023 

External economic factors encouraging investment in farmland as a hedge 

Growing transparency for landowners as to their land value, enabling fairer and more objective bases for lease negotiations.

Let’s walk through exactly why we’re holding our prediction that 2024 is seeing and will continue to see a strong farmland market, and what landowners can do to take full advantage over the coming year. 

In 2023, land values continued to be strong, not softening from 2022. In some cases, they have even continued a slight upward trend. And according to recent data, there are some signs that farmland will hold its value this year. 

This strength is part of a broader trend over the last three years, where farmland value has been steadily increasing in value. See the following from USDA NASS: 

Continued strength among the farmland market would continue this growth trajectory. But even if there was an unexpected cooling, the likelihood of dropping to pre-2022 levels is unlikely. As such, farmland values can be expected to remain in a strong position. Here are some reasons why. 

We’ve seen impressive crop yields in 2023, despite drought conditions in some parts of the country. This is due to a variety of factors, most notably advancements in precision planting, applications, seed genetics, and harvesting technology. 

As farm input costs continue growing into 2024, these strong yields are critical for maintaining, even growing, farmers’ ROI. If they’re still able to offset input costs into 2024, this is likely to have a continued positive impact on farmland value. 

In fact, that positive ROI mentioned above is precisely what we saw last year. Median farm incomes increased in 2023 to $99,523 per year, an increase of 4.3 percent. The more profitable the farm, the more lucrative it looks as an investment, which increases its value. 

For many investors, farmland acts as an excellent hedge against external economic factors. Although economists anticipate inflation to cool in 2024 and 2025, any number of external factors could result in economic instability. 

As such, many investors use farmland as a hedge, namely because it’s a tangible asset in limited supply, which supports its value despite uncertainty in other sectors of the economy. The increased demand from investors also drives further value. 

USDA reports strong cash rental rates in 2023, increasing an average of $7.00 per acre. This influences landowners willingness to invest in this asset, as they’re able to use it to drive greater income. As we’ll see below, strong cash rental rates are key for landowners to maximize the value of their farmland assets. 

Why does a strong farmland market create a challenge for landowners?

Although farmland values will hold their strength in 2024, it’s not necessarily good news for landowners. While the additional value is a good thing, it also means that property taxes and other carrying costs increase as well. 

So unless you’re increasing your cash rental rates to keep up, your expenses will increase in 2024. 

Unfortunately, common practice for negotiating cash rental rates does not favor landowners. Rather, rental rates are based on the USDA’s published figures, which are themselves based on self-reported data from farmers. 

So although indirectly, farmers are setting the rates, not landowners. In no other sector of the real estate market is this the case. 

Here are some of the major weaknesses in USDA published cash rental figures: 

Inherent weaknesses of surveyed data. USDA published figures are based on data captured through farmer self-reporting, and farmers have an incentive to keep the county average low—because a higher county average will drive up their rents. As such, they may underreport their rates.

Limited demographic diversity. While USDA figures give a good sense of broad trends, you can’t glean any information specific to a particular piece of land. Above-average productivity, highly profitable crops, high soil and land quality, well-maintained irrigation infrastructure, and other factors can make the land more valuable than the county average.

Outdated information. USDA figures are based on ten-year county averages. This means that even if your land value spiked this year, odds are your cash rents aren’t keeping up—because USDA is still factoring ten-year-old prices into their averages.

Positive feedback loops. The fact that farmers report cash rental payments to the USDA, which are then used as the basis for determining the fair value of a cash rental agreement in following years, creates a positive feedback loop. 

How landowners can offset carrying costs from increased farmland values

Often landowners settle for subpar cash rental rates because they don’t have a good sense of the true value of their farmland. To change the status quo, farmers need tools, resources, and information to be able to negotiate from a position of strength. 

CommonGround’s CashRentstimate proprietary algorithm calculates the real-time, objective value of a piece of farmland. It takes into account over fifty different demographics to make this calculation, including:

These data are then analyzed by a multiple linear regression algorithm, a machine learning technique that finds the most powerful variables and weights them more heavily. Because different states have different priorities, we’ve tailored the CashRentstimate to specific conditions and predominant crops within 20 individual states. 

With access to this information, farmland owners can offset the increased carrying costs of stronger farmland values in 2024. This enables stronger financial positioning and security in your portfolio over the long haul. 

Don’t wait to unearth the true value of your farmland. Get your free CashRentstimate today. 

Despite challenges across U.S. agriculture, we anticipate a strong 2024 farmland market. Here’s why, and how landowners should prepare.

Why 2024 Will See a Strong Farmland Market

Although farmland values will likely not surge in 2024, record growth over the last three years is keeping values strong. While this can be to the landowner’s benefit, some challenges arise from high farmland values, most notably increased tax liability.

Unfortunately, for landowners leasing their land for farming, current practices surrounding lease agreements don’t account for these dynamics and, more often than not, force landowners to bear 100% of these carrying costs. 

This article will walk through exactly why this is a problem, and how landowners can fix it by changing their approach to cash rental lease agreements. 

Why are farm values increasing? And how does it impact the landowner?

Although farmland values remain strong, there will unlikely be a massive surge like the ones we’ve seen from 2021-2023. 

There are a number of factors that go into these strong farmland values: 

Commodity prices. Although the record prices from 2021 to the present are likely a blip, and the market will even out in the coming years, prices will remain strong compared to previous years.

Productivity. Advancements in precision planting, applications, seed genetics, harvesting technology, and other areas have all resulted in a corresponding increase in productivity, helping farmers offset high input costs and even growing their ROI.

Diversification & hedging. The ground is a great hedge against other external economic factors, and the increased demand can drive additional value.

Obviously there are benefits to increased farmland values. Unfortunately, there’s also a flip side, namely in the form of increased property taxes. While these carrying costs are most often shared with tenants in other real estate sectors, the unique practices of farmland rental mean that farmers bear 100% of the carrying costs associated with asset ownership. 

This is not a fair situation. If land values are going up, the owner needs to take steps to ensure those carrying costs are more equitably shared and they can reap the benefits of owning the asset. 

As farmland values remain strong going in 2024, who’s paying for increased farmland values? Here’s how landowners can mitigate their liability.