STAR Farmers Join Project To Determine How Soil Health May Increase Land Value
IL STAR is thrilled to be partnering with Delta Institute on a project that is paving the way for soil health to be factored into farmland valuation. Compeer Financial and the Soil Health Institute are the other major partners in the Soil Health Appraisal Project, which has selected 12 tracts of land from Piatt, Logan and Macon counties, a region that was identified for its uniform soil types largely unaffected by urban sprawl or changing land use. IL STAR producers in these areas were contacted to gauge interest in this project, and we were happy to identify six different STAR farmers who will be participating!
Lucas Chamberlain and Gillian Chesnut, Resilient Agriculture Programs Staff for Delta Institute, are the primary coordinators of this project. Describing the importance of this project, Lucas said, “One of the big barriers to farmers adopting conservation practices is there are a lot of upfront costs and risks. They may be worried their yields are going to take a hit or they can’t afford equipment. If risk is the big issue, and it’s related to financing, is there somewhere in the financing process that we can demonstrate that soil health is mitigating risk? The value of their land might be improved so they might have greater equity. They have more collateral if they are trying to get a loan, and ultimately, we would love to see if there is less risk.”
When asked about why they decided to partner with STAR on this project, Lucas explained, “That was a very easy decision. What we learned in previous iterations of this pilot project is we want to see what is happening on farms where conservation is happening. We did not have the network of these farmers. We worked with STAR before on previous projects, and we admire the work you all do. And we wanted to also help reward some of the STAR farmers with a little something extra.” In exchange for their participation, farmers will receive a free land appraisal and soil health report showing how their soil compares to other soils in the study region.
Gillian added, “When I first started learning about STAR, something that made me assured in our decision to work together is that STAR’s online rating system and platform is free. For people who may not be involved in the ag sector, it can be really tempting and exciting to make your own version of something like this. I like that STAR does not overcomplicate.”
Dan Liptzin is the Research Soil Scientist with the Soil Health Institute who will be collecting and analyzing soil samples and preparing reports for the landowners. Describing their role, Lucas said, “They help us ensure that our soil sampling methodology and soil tests are replicable and standardizable. We want to ensure that anyone can do this in any location.” Currently, he’s preparing to collect samples from the 12 tracts that were selected for this project. Describing the potential impacts of this project, Dan said, “Property appraisal already includes some static soils information based on maps that may be decades old. We are hoping that soil health measurements, including the local context and the management history, can be incorporated into the appraisal process to reward farmers who have healthy soils.
Andy Weidner and Ethan Koch are the Real Estate Appraisers with Compeer Financial who will be conducting the appraisals. Describing why they wanted to become involved in this project, Andy said, “Ethan and I became involved with this project because soil health is becoming a more visible part of how the market perceives farmland. This is often tied to a farm’s long-term productive capacity; however, this characteristic has not traditionally been addressed in a consistent, market-supported way within farmland valuation. As both agricultural appraisers and farmers, we are interested in helping examine whether observable and measurable soil-health characteristics could be analyzed within the same disciplined framework we use for other real-property influences.”
Ethan described the additional steps involved in this project and how it differs from traditional land appraisals. He said, “The fundamental appraisal process remains the same: the value conclusion must be supported by market evidence. What differs is the additional effort to understand soil-health management, field-level conditions, and the potential ways those characteristics may affect productivity, risk, operating costs, and purchaser perception. The project requires collaboration among appraisers, farm operators, market participants (buyers / sellers, farm managers), soil-health professionals, and lenders to identify information that is meaningful, verifiable, and capable of eventually being reflected in market behavior, not simply to assume that a particular practice automatically creates a value premium.”
Describing his hopes for the ultimate outcome of this project, Andy said, “Our goal for the long-term is to develop a practical, credible, and replicable framework that allows soil health to be recognized when the market supports it. Ideally, that would give landowners a clearer understanding of how long-term stewardship may protect or enhance the productive utility and marketability of farmland, while preserving the appraiser’s obligation to reach conclusions grounded in market evidence.”
Although individual information will only be shared with participants, the aggregated data and results of this project will be published on the Delta website and possibly other locations. When asked about what he hopes that the public will take from this project, Lucas said, “On the farmer level, I want farmers to feel empowered to keep doing all the hard work they are doing in conservation and know they are supported in that financially. We just want to incentivize the adoption of conservation practices and reward farmers who are putting all the time and money into long-term stewardship. We are very optimistic about the results of this work… that years from now, farmers can use the results of this to show lenders they are lower- risk borrowers, and they will provide them with a low interest rate. We are hoping this can grow.”
Building on the idea of rewarding farmers for their efforts, IL STAR Coordinator Natalie Kerr said, “Illinois STAR exists to support farmers on their conservation journey. Inevitably, cost is a part of the conversation so we are always looking for ways that STAR can bring value to farmers. We currently do that in producer reward programs, but this is a new and exciting opportunity to draw attention to the long term benefits of conservation through soil health. If farmers are making management decisions that improve their soil quality and make their farms more resilient, then that should be recognized in the land valuation process.”
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