Soil Health and Farmland Valuation

Soil health is quickly becoming the standard measurement for regenerative agriculture systems.  Soil health samples can be taken by anyone who has been appropriately trained in the measurement standards and operation procedures. Test samples can be taken by farmers, private companies that offer testing service, technical service providers, soil scientists, and many more.

 

As part of our Resilient Agriculture projects and our Strategic Plan, Delta Institute (Delta) has a deep bench of experience exploring, testing, and examining soil health. Delta seeks to directly support 1,000 farmers as they transition to sustainable and climate-resilient practices, with 1M acres transitioning to climate-resilient and conservation-focused practices in the Midwest by 2025.

In Brief: What is Soil Health?

Soil has both inherent and dynamic properties. Inherent soil characteristics like soil texture and depth to bedrock are independent of use and management practices, though they impact the way soil functions. For example, sandy soil drains faster than clay soil due to differing particle size. Deep soil has more space for roots to spread than soils with bedrock near the surface. Dynamic soil attributes are related to how soil changes in response to various management approaches. Specific management choices affect the amount of soil organic matter, soil structure, bulk density, and nutrient holding capacity. Together, these properties indicate a soil’s capacity to function.

Soil quality refers to a soil’s ability to be used in agricultural production. Soil health takes this a step further, considering soil as a living entity, where maintaining its soil organic matter and microbial activity are essential for long term use and sustaining ecosystems. One goal of soil health research is to learn how to manage soil in a way that improves soil function. Soils respond differently to management depending on the inherent properties of the soil and the surrounding landscape.

Soil health indicators are quantifiable properties of soil or plants that inform how well the soil functions. Indicators can be physical, chemical, and biological properties, processes, or characteristics of soils. They can also be morphological or visual features of plants. There are several soil health tests and labs that measure biological, physical, and chemical characteristics. While soil health testing is an emerging and active field of research, advances are being made to better understand and develop these tests to provide accurate, consistent, and replicable results that inform soil management.

Soil Health Testing: How To Guide and Materials

Please use our many tools that test, explore and examine soil health throughout the Midwest. Using tools that test soil health and applying what we learn presents an opportunity to restore soil health and expand more conservation-focused land management practices on working farms throughout our home region and the broader Great Lakes basin. The resources in this section help to plan and implement soil health testing practices.

You may review all our Soil Health materials here.

Soil Health Testing Guide (Sept 2020)

The soil health testing protocol outlined in this document is developed for institutional landowners, such as public agencies and conservation land trusts, to implement these tools. This protocol aims to provide institutional landowners the resources they need to identify appropriate soil health indicators to measure and track, conduct soil health testing, and understand the results. Ultimately, they can evaluate improvements in soil health due to regenerative agriculture practices implemented on their land. At Delta Institute, we work to expand conservation practices on public and private lands to preserve both natural and working landscapes throughout the Midwest.

Conservation Hotspot Analysis in Illinois (July 2022)

To assess conservation adoption in Illinois and identify key factors that lead to higher adoption rates, Delta and the Environmental Working Group partnered to identify conservation hotspots. We utilized publicly available data to identify where conservation practices are being adopted. Where we had datasets that covered extended time ranges, we also assessed the longevity of conservation behavior. The results of the analysis suggest that future strategies which seek to more effectively deploy financial and technical support to increase conservation adoption should be modified to focus on local conditions and concerns, avoiding a state-wide or uniform program design that fails to consider local factors. In July 2022 we expanded our initial research to include broader findings.

The Land Valuation and Farmland Appraisal Process, and Soil Health

For landowners, making improvements that increase the value of their land can be a critical factor in deciding how their land is managed. Appraisal reports might reference soil productivity as a static number and use it to estimate income from the land to determine its value. Most commonly, sales comparisons are used to determine the value of the property. This approach, while allowing the appraiser to adjust based on soil properties such as texture (sand, silt and clay content), location and market trends, does not account for soil health as a differentiator when assigning value to land using soil health-focused management practices. As a direct result, there presently is little incentive to invest resources in practices that increase soil health; thus, incorporating soil health into the valuation process can serve as a critical pathway to transition to management practices that increase soil health—particularly soil health management systems—if such practices lead to increased land value.

And that is where Delta’s projects focus, so that the case for soil health and conservation have a market basis for more Midwestern farmers so that the health of both their operations and land increases concurrently.

You may review all our Farmland valuation and appraisal materials here.

Illinois Soil Health Land Valuation Market Research (July 2023)

Following feedback and additional input from farmland brokers and appraisers, two novel appraisal interventions were selected for development: a Soil Health Index and an Inventory of Comparable Properties that have adopted SHMS. Now, to support the next stage of work – piloting the two aforementioned interventions among a cohort of 10 Illinois farms within MLRA 108 – Delta offers this analysis of Illinois’ farmland real estate market from 2017—2023. This report synthesizes market signals of farmland real estate in Illinois to uncover driving factors that place value to land. These findings will inform the ultimate goal of institutionalizing Soil Health as a factor in the land appraisal process in Illinois.

Soil Health Characteristics Relevant to Land Valuation in Illinois (Sept 2022)

Delta Institute seeks to engage landowners, land managers and farmers to understand the best mechanisms to implement strategic soil health management systems in Illinois to prevent soil degradation and improve soil health. Transitioning from conventional to sustainable agriculture achieves these goals, while enhancing rural community resilience and improving a farmer’s bottom line. The project team includes soil conservation scientists (the Soil Health Institute) and farmland appraisers (Compeer Financial) to identify soil health indicators linked to land management and develop associated appraisal methodologies. Ultimately, these efforts will yield a novel appraisal methodology to be used to assess Soil Health Land Valuation in Illinois.

We treat each State in the Midwest as unique, as each State has its own local context, culture, processes, and status quo–especially when it comes to our region’s greatest economic driver, agriculture.

Incorporating Soil Health into Farmland Appraisal in Iowa and Indiana (Sept 2022)

Delta Institute seeks to engage landowners, land managers and farmers to understand the best mechanisms to implement strategic soil health management systems in Iowa and Indiana to prevent soil degradation and improve soil health. Transitioning from conventional to sustainable agriculture achieves these goals, while enhancing rural community resilience and improving a farmer’s bottom line. The project team also seeks to engage with soil scientists and farmland appraisers to identify soil health indicators linked to land management and develop associated appraisal methodologies. Ultimately, these efforts will yield a novel appraisal methodology to be used to assess Soil Health Land Valuation.

We treat each State in the Midwest as unique, as each State has its own local context, culture, processes, and status quo–especially when it comes to our region’s greatest economic driver, agriculture.

Incorporating Soil Conservation Practices into Farmland Appraisal in Southeastern Michigan (Oct 2022)

Delta Institute engaged landowners, land managers and farmers to understand practical ways to incentivize the use of ‘soil health management systems’ in Southeastern Michigan to improve water quality in the Great Lakes Basin through the reduction of nutrient loading and runoff. Transitioning from conventional to sustainable agriculture achieves this goal, improves soil health, enhances farmland resilience and profitability. The adoption of soil health management systems leads to improved soil health on agricultural land. Soil health management systems increase soil organic matter and reduce the need for fertilizers and soil amendments. These changes have a direct impact in reducing the quantity of water runoff and improving the quality of water. Adopting soil health management systems is an effective way of improving the environment of the Great Lakes Basin.

We treat each State in the Midwest as unique, as each State has its own local context, culture, processes, and status quo–especially when it comes to our region’s greatest economic driver, agriculture.

Soil Health and Land Valuation: Potential Interventions (Sept 2021)

This memo that was prepared for the Walton Family Foundation describes current valuation methods and the conceptual models to incorporate soil health and conservation data into practices currently deployed by farmland appraisers and brokers. This document refers to these mechanisms as interventions, as they are designed to improve outcomes in a specific situation; how farmland is valued for sales purposes. The document also describes the feasibility of each concept, as evaluated by the advisory group, and ultimately presents a strategy to further develop and implement the most feasible concepts.

Memo: Land Value and Soil Health in Cropland Appraisals (Feb 2020)

Our first report linking soil health and land valuation together. Delta uncovered three potential opportunities to link soil health to land value. They include improving data and methodologies in valuation indices to modify new appraisals, providing education to appraisers and underwriters to adopt new valuation approaches, and shifting the culture of appraisers, investors, and lenders to include long term benefits in underwriting as opposed to just focusing on market turnover and commodity prices in valuation.

Land Valuation System Overview (June 2019)

This overview document provides an overview of the (then present) land valuation system in the Midwest.

The ultimate goal of our work is to drive change in agricultural land appraisal practices in Illinois—with strategies for scaling in other Midwestern states—that result in broader adoption of conservation focused land management that improves the health of our soil.

Delta has an array of resources and experience available across our website, including on our Projects Roster, and our Tools and Publications. If you have any questions, please contact us.

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