Home / Corporate Solutions / Farmland Metadata and Precision Ag Influencing Land Prices

Farmland Metadata and Precision Ag Influencing Land Prices

The farmland market isn’t exactly following the grain markets lower. In a lot of situations, circumstances like proximity to bidders’ existing acres, CSR (corn suitability rating), and other variables can drive bidding higher, even if it’s completely in the face of fundamental land market trends.

Can technology help keep sale prices more in line with the pricing trends for the crops grown on that selling land?

If you’re a computer geek, you’ll know this term. If not, you might want to familiarize yourself with it: metadata. Essentially, it’s the data that makes up data. Think of the ingredients of a recipe or the individual parts of an engine that together make it run. Now think this way about the data that comprise the full output of all of your precision ag tools. They all work together to glean a set of information about your land that paints a full picture of its productivity.

While that’s of immense use in any agronomic decisions you make in readying those acres for any crop, right now it doesn’t factor in as much to the land’s overall value when it’s up for sale. Yet, what if that information has been kept up for years? Then things like historical yield, soil test results, and other facts can chip into the value of land when it’s for sale, or prevent a buyer from misjudging its potential when bidding.

What does the specific tracking of this crop metadata mean to your specific land values right now? It’s likely not adding a premium to the price your land nets if you’re selling, but it may down the road when big-data systems and their output become standard on farms like yours. Because the value of that data is tied closely to its volume and consistency, if you plan on deriving that additional value from land sales down the road, you might want to get started keeping track of it now, Taylor and Griffin advise.

“A close analogy may be mineral rights and farmland. Landowners sometimes retain the mineral rights when they sell the surface rights of farmland. Several scenarios exist where the data may be retained by the farmer or may be negotiated separately. Unlike mineral rights and the minerals themselves, data are electronic in a big-data system; and copies of electronic data are considered identical to the original. In other words, once a copy of the data has been made available to another party, then the original owner of the data has very little control of the data,” the economists say. “It remains unclear whether the ‘data premium’ will be a true premium (an amount added to the market price of land) or a penalty (an amount deducted from the market price of land). In the short-run, early movers who choose to provide data to land buyers may see a premium. However, as the transfer of data with a land sale becomes more common, a penalty to land parcels without data may be more common.”

(Source – http://www.agriculture.com/news/technology/farml-metadata-precision-ag_6-ar48327)

Leave a Reply

Your email address will not be published. Required fields are marked *

*