Corn Suitability Rating of Soil Types

Calculating the CSR for a Tract of Land

• The CSR begins with a digital map of the soil types of the tract in question, or Area of Interest (AOI). The map shows boundaries where the soil types are differentiated. Codes are assigned within the boundaries based on soil type, e.g., storden loam, slope and topsoil erosion. A sandy loam with no slope and little erosion will score high on the CSR; for instance, 90 for the purposes of land evaluation. Using the map, a farmer can determine how many acres exist on the AOI matching that soil classification. Multiplying the rating of 90 by the number of acres yields the Total Rating by Soil Type. Determine this product for each classification showing on the map, added together, and then divided by total tract acreage. This figure is the Weighted Average Corn Suitability Rating.

Using CSR for County Assessments

• For tax assessment purposes, in compliance with Iowa law, authorities tabulate average productivity of farmland by county and look at CSRs for individual tracts. Taking recent state-wide USDA census data on income per acre, they use the prevailing land capitalization rate, total CSR index points and dollar value per point to determine how to assess individual tracts. Factoring in CSR focuses more on the land's absolute production value rather than on how well an individual farmer is doing any particular year.

Establishing Rents Based on CSR

• It stands to reason that, in rural communities, a high CSR implies a larger income. Consequently, land that promises greater revenues can also command higher rental fees. Calculating the average rental rate per acre for a given county and dividing that number by the average cropland CSR for the county yields a rental rate per CSR index point. So, if the average rent per tillable acre in Emmet County, Iowa is $170 and the average cropland CSR is 69, then the rental rate per CSR index point is $2.46. Should the weighted average CSR for an Emmet County farmer's land be higher than the county average, say 75, he can consider charging $184.50 ($2.46 x 75) per acre, given his farm's superior suitability rating. He must bear in mind, however, that other factors like drainage and market accessibility also affect rental incomes.

Using CSR to Determine Sale Value

• As with rents, higher CSRs can factor into higher market values for a property. Also like rental rates, however, other mitigating variables come into play, like location, accessibility, structures and developer bids. Still, the CSR serves as an important component in determining sale price. Using the average farmland market value and dividing it by the county average CSR is the first step. Again, looking at Emmet County, if the average sales price per acre of tillable land is $5,000, you arrive at the value based on productivity when dividing that sales price by the CSR average of 69, that is $72.46 per CSR index point. Multiplying that by a particular farm's average weighted CSR of 81, for example, gives a seller one approach to fair market value, in this case $5,869.26 per acre.