How is farmland valued?

Farmland is valued through three approaches: (1) Income approach — capitalized cash rent (cash rent ÷ farmland cap rate, typically 3-5%); (2) Sales comparison — recent comparable transactions adjusted for soil productivity, location, water rights; (3) Cost approach (rare for productive farmland). Soil productivity index is the primary value driver — CSR2 (Iowa) ranges 30-95+, PI (Illinois) ranges 20-150. Premium Iowa CSR2 90+ farmland trades at $15K-$20K/acre; less productive Iowa CSR2 60s trade $8K-$12K/acre; commodity Midwest farmland averages ~$8,800/acre per USDA 2024 data. Water rights drive value premium in irrigated arid markets.

Which REITs invest in farmland?

Two public farmland REITs: Gladstone Land (LAND, ~$500M mkt cap) holds ~169 farms across 15 states with significant permanent-crop exposure (almonds, pistachios, blueberries, citrus) plus row crops. Farmland Partners (FPI, ~$500M mkt cap) holds ~150,000 acres across 17 states focused primarily on commodity row crops (corn, soybeans, wheat). Despite ~$3T+ US farmland market value, public REITs hold only ~$1B+. The bulk of institutional + ultra-wealthy farmland ownership is private: Bill Gates Cascade (~270K acres, largest individual landowner), John Malone (~2.2M acres), Ted Turner (~2M acres pre-divestiture), institutional pension fund land aggregators.

What is cash rent vs crop share for farmland?

Cash rent is a fixed annual payment from tenant farmer to landowner regardless of crop yield or price — the most common modern lease structure. Crop share is a percentage-based lease where landlord receives a share of the crop production (typically 30-50%) — common historically + still used in some Midwest + Southern markets. Cash rent shifts production + price risk to tenant farmer; crop share shares risk + reward between landlord + tenant. Cash rent typically ranges $150-$400/acre for Midwest commodity row crop; varies significantly by soil productivity, irrigation, location. USDA NASS publishes annual cash rent statistics by county.

Agricultural KPIs.

Agricultural land is the broadest agricultural real estate category — primarily commodity row crops (corn, soybeans, wheat, cotton, rice) plus general-purpose farmland not classified as orchard or vineyard. The sector encompasses ~900M acres of US farmland. Performance is measured in cash rent per acre ($150-$400/acre Midwest commodity row crop typical), yield per acre (~190 bu/acre corn average), commodity price per bushel/pound, soil productivity index (CSR2 in Iowa, PI in Illinois), water rights, and crop insurance coverage. The economic structure includes cash-rent leases (most common, fixed annual rent), crop-share leases (landlord shares 30-50% of crop production), and direct operation. Comparable REITs: Gladstone Land (LAND, ~$500M mkt cap, ~169 farms across 15 states focused on permanent crops + row crops), Farmland Partners (FPI, ~$500M mkt cap, ~150,000 acres across 17 states focused on commodity row crops). Despite ~$3T+ US farmland market value, public REITs hold only ~$1B+ — institutional ownership is highly fragmented (Bill Gates ~270K acres, John Malone ~2.2M acres, Ted Turner ~2M acres). Ilora.ai ingests cash rent + crop share leases, USDA NASS yield data, commodity price hedging, soil productivity reports, water rights documentation, and crop insurance, then benchmarks against LAND + FPI + ASFMRA + USDA NASS county data.

14 definitions · Sector: AGRICULTURAL · Used by Ilora.ai specialist AI agents

NOI: Total revenue minus operating expenses (excludes financing and capital costs). The primary measure of property-level profitability.
Cap Rate: Net Operating Income divided by current property value. Expresses unleveraged annual yield as a percentage.
DSCR: Net Operating Income divided by total annual debt service. Lender-required cushion measure; below 1.0 means NOI cannot cover debt.
LTV: Loan amount divided by property value. Lower LTV = lower lender risk.
OER: Operating expenses divided by gross revenue. Lower is better, but varies by property type (hotels run higher than triple-net retail).
GRM: Property value divided by gross annual rental income. Quick valuation shortcut; less precise than cap rate.
IRR: Annualized return on investment accounting for time value of money across the full hold period.
CoC: Pre-tax annual cash flow divided by total cash invested. Measures the cash yield, not total return.
DCF: Valuation method that projects future cash flows and discounts them to present value at a chosen rate.
TTM: A rolling sum of the most recent 12 months. Smooths seasonality for KPI comparisons.
Yield/Ac: Crop output per acre per harvest. The fundamental productivity measure for farmland.
Cash Rent: Annual cash payment per acre under a fixed-rent lease. The dominant farmland income model.
Crop Share: Lease structure where landlord receives a percentage of crop revenue instead of cash rent.
PI / CSR: State-specific scoring of soil productivity (e.g. CSR2 in Iowa, PI in Illinois). Drives valuation.

Sub-types

Sub-types within Agricultural.

Commodity Row Crop (Corn, Soybeans, Wheat): Midwest commodity row crops; cash rent or crop share leases.
Cotton + Rice + Specialty Row Crop: Southern cotton, rice, peanut, sugar cane production.
Hay + Forage Production: Alfalfa, mixed hay, forage for dairy + livestock.
Vegetable / Truck Crops: Fresh-market vegetable production (lettuce, tomatoes, melons).
Mixed Crop + Livestock: Mixed operation combining row crops + livestock production.

Amenities & features

7 amenities Ilora.ai tracks for Agricultural.

Tillable Crop Land (Row Crop): Productive cropland for commodity row crops (corn, soybeans, wheat).
Tillable acres
Yield per acre by crop
Soil Productivity Rating: Soil productivity index (CSR2 Iowa, PI Illinois); primary land value driver.
CSR2 / PI rating
Productivity vs county average
Drainage + Tile Systems: Subsurface drainage tile improving yield + reducing flood loss in clay soils.
Tile coverage %
Drainage CapEx
Irrigation (Center-Pivot, Sub-Irrigation): Center-pivot irrigation in arid + semi-arid markets; major productivity driver.
Irrigated acres
Water rights (AF/yr)
Grain Storage (On-Farm Silos): On-farm grain storage enabling delayed sale + price optimization.
Storage capacity (bushels)
Equipment Sheds + Machinery: Equipment storage + maintenance facilities for tractors + harvesters.
Equipment value
Crop Insurance (RMA): USDA Risk Management Agency federal crop insurance coverage.
Crop insurance coverage %
Indemnity claims history

Industry reference

How the agricultural sector operates.

Market segments

Cash rent landlord (fixed annual rent)
Crop share landlord (30-50% production share)
Owner-operator farmer (multi-generation)
Custom-farming operator
Conservation Reserve Program (CRP) enrolled
EQIP / CSP conservation program participant
Carbon market participant (emerging)

Operating models

Owner-operator multi-generation family farm
Cash-rent absentee landlord
Crop-share landlord-tenant arrangement
REIT-owned with operator lease (LAND, FPI model)
Custom-farming operator (third-party manages production)
Institutional land aggregator (Bill Gates Cascade, AgriFM)

Regulatory frameworks

USDA NASS (production reporting + survey)
USDA Farm Service Agency (FSA — payment programs)
USDA Risk Management Agency (RMA — crop insurance)
USDA Conservation Reserve Program (CRP)
USDA EQIP / CSP conservation programs
EPA pesticide registration + WPS
State drainage district regulations
IRS Section 2032A special-use valuation (estate tax)

Industry organizations

ASFMRA (American Society of Farm Managers + Rural Appraisers)
AFBF (American Farm Bureau Federation)
NCGA (National Corn Growers Association)
ASA (American Soybean Association)
NAWG (National Association of Wheat Growers)
Realtors Land Institute (RLI)

Comparable public REITs / operators

LAND (Gladstone Land — ~$500M mkt cap, ~169 farms in 15 states focused on permanent crops + row crops)
FPI (Farmland Partners — ~$500M mkt cap, ~150,000 acres across 17 states focused on commodity row crops)
Adjacent timberland REITs: WY (Weyerhaeuser), RYN (Rayonier), PCH (PotlatchDeltic)
TPL (Texas Pacific Land — Permian Basin energy + ranch land)
Major private institutional: Bill Gates Cascade (~270K acres), John Malone (~2.2M acres), Ted Turner (~2M acres pre-divestiture), Cresud (CRESY — South American), Adecoagro (AGRO)

Documents Ilora.ai ingests

Cash rent + crop share lease agreements
USDA NASS yield + production reports
Soil productivity index (CSR2 / PI) reports
Water rights documentation
Commodity price hedging contracts (futures + options)
Crop insurance policies (RMA)
CRP / EQIP / CSP enrollment documentation
Property tax bills (often agricultural assessment)
Annual operating budget + capital plan
Equipment + machinery inventory

Industry tools (we integrate with these)

AcreValue (land valuation + market data)
LandWatch + Land.com (transactions)
USDA NASS QuickStats
Granular (farm management)
Climate FieldView (Bayer)
John Deere Operations Center
Trimble Ag Software
AcreTrader (small farmland investment)
AgriWebb (farm records)
Esri ArcGIS (farm mapping)

Frequently asked

Common questions about agricultural.

How is farmland valued?: Farmland is valued through three approaches: (1) Income approach — capitalized cash rent (cash rent ÷ farmland cap rate, typically 3-5%); (2) Sales comparison — recent comparable transactions adjusted for soil productivity, location, water rights; (3) Cost approach (rare for productive farmland). Soil productivity index is the primary value driver — CSR2 (Iowa) ranges 30-95+, PI (Illinois) ranges 20-150. Premium Iowa CSR2 90+ farmland trades at $15K-$20K/acre; less productive Iowa CSR2 60s trade $8K-$12K/acre; commodity Midwest farmland averages ~$8,800/acre per USDA 2024 data. Water rights drive value premium in irrigated arid markets.
Which REITs invest in farmland?: Two public farmland REITs: Gladstone Land (LAND, ~$500M mkt cap) holds ~169 farms across 15 states with significant permanent-crop exposure (almonds, pistachios, blueberries, citrus) plus row crops. Farmland Partners (FPI, ~$500M mkt cap) holds ~150,000 acres across 17 states focused primarily on commodity row crops (corn, soybeans, wheat). Despite ~$3T+ US farmland market value, public REITs hold only ~$1B+. The bulk of institutional + ultra-wealthy farmland ownership is private: Bill Gates Cascade (~270K acres, largest individual landowner), John Malone (~2.2M acres), Ted Turner (~2M acres pre-divestiture), institutional pension fund land aggregators.
What is cash rent vs crop share for farmland?: Cash rent is a fixed annual payment from tenant farmer to landowner regardless of crop yield or price — the most common modern lease structure. Crop share is a percentage-based lease where landlord receives a share of the crop production (typically 30-50%) — common historically + still used in some Midwest + Southern markets. Cash rent shifts production + price risk to tenant farmer; crop share shares risk + reward between landlord + tenant. Cash rent typically ranges $150-$400/acre for Midwest commodity row crop; varies significantly by soil productivity, irrigation, location. USDA NASS publishes annual cash rent statistics by county.

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