Appraising the value of irrigated cropland: considerations in the Lower Arkansas River Basin
Pritchett, James, author
Colorado State University, Department of Agricultural and Resource Economics, publisher
Agricultural land values, and the relative importance of individual characteristics in determining these values, is of longstanding interest to economists and of practical importance to agricultural real estate appraisers, loan officers and farm managers. The purpose of this document is to review the basic approaches to agricultural land appraisal, and then apply a subset of these approaches to value native rangeland, pasture, irrigated cropland for the Lower Arkansas River Basin. An imputed value of irrigation water is also discussed. The general methods of appraisal considered in the analysis include the market value and income approaches. Using data from 2005 to 2012, a general finding for irrigated cropland in southeastern Colorado appears to fall in a range of $1,964 to $3,183 per acre. Non-irrigated cropland values range $416 to $528 per acre. The capitalized value of a herd of 70 cow-calf pairs is $58,333 in the absence of a value for the cow asset. Note that these values may understate current market activity that is heavily influence by recent record high commodity prices and drought.
market value approach