How to Prove the Value of Healthy Soil

Guaranteed extra income could push conventional growers to make the switch ( Darrell Smith )

If you’re one of the many farmers who are intentional about soil health, your land might be worth more. In addition, if you can prove to your landlord your actions are increasing his or her land value, you might be able to secure longer-term rental agreements.

First, you need to understand the value no-till, cover crops and other conservation practices provide to soil by increasing organic matter.

Just a 1% increase in soil organic matter (OM) can bring about $12 per acre in fertilizer savings to farmers, according to research at Ohio State University and Kansas State University. In addition, it’s putting carbon back into the soil.

Pay for land after

 

Ohio State Chart
C: Ohio State University, Hoorman and Islam

Make soil valuable

Just because you’re practicing good soil management techniques, doesn’t mean stakeholders know or care. Show them the value.

“You have to show your landlords what you’re doing every year,” says Paul Overby, farmer, owner of Verdi-Plus and president of Northern Plains Resource Conservation and Development Council. One of the biggest barriers to entry for no-till and other conservation practices is rented land—your efforts can quickly be lost if landlords switch renters.

However, if your conservation efforts increase a landowner’s value, you might be able to secure longer-term contracts. Here are a few tips to prove the value of conservation practices with landlords and other stakeholders:

  1. Share specifics with your landlords—show them the value of the conservation practices you’re implementing. Use charts such as the one here.
  2. Tell your banker what you’re doing and how it increases profits. By doing so, it could enhance your ability to access ground.
  3. Next time land comes up for sale or rent, ask the realtor for management history. This question will help influence change. If you ask these questions, realtors and appraisers will start thinking about new ways to show value:
    1. Ask for soil test history.
    2. Has the field been in no-till?
    3. What’s the OM?
    4. Have cover crops been used?
    5. Ask for zone maps.
    6. Ask for yield maps.

How much will people pay?

Soil type and quality impacts production—but are people willing to pay more for better ground? Overby surveyed farmers in North Dakota to find where they placed the value of higher OM.

He asked this question: How much additional rent, per acre, are you willing to spend on ground with 5% OM versus 3% OM? However, he asked it twice, once before showing them the value additional OM brings and once after—there’s obvious value in explaining the benefits.

 

Extra Rent BEFORE
C: Paul Overby

However, results were skewed after Overby showed the Ohio State chart with the value of OM per acre.

Willing to pay after
C: Paul Overby

Similarly, he asked farmers before and after showing the value of additional organic matter how much more they’d be willing to pay for land with additional OM.

 

Buying land before
C: Paul Overby

after

It all starts with a conversation.

“If enough farmers start asking about OM, for example, that could be used in field appraisals,” Overby says. “If no one asks, no one will take time to include it [in the valuation].”

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