Valuing and Buying U.S. Farmland, with Consideration of Non-Ag Features

Terry L Kastens and Kevin C Dhuyvetter ( August, 2013 )

Summary

The purpose of this publication is to provide background for users of the KSU-Landbuy.xls spreadsheet, which is a computer-based tool to help agricultural land buyers and sellers, whether producers or outside investors, make more informed decisions. The background is developed using historical information and economic intuition to develop a mathematical land buying model underlying the KSU-Landbuy spreadsheet. Those who desire less intensive understanding can go directly to the spreadsheet. Finally, although it is easier with a computer, all of the mathematics used in this paper can be handled with a pencil and paper and personal calculator. Additionally, the economic understanding and historical rules of thumb uncovered or developed in this paper should be invaluable to anyone wishing to consider a farm land investment – whether or not they use KSU-Landbuy.

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