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Ag Land Assessment

Updated January 22, 2019
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Matthew Elliott

SDSU Extension Agribusiness Specialist

The Ag Land Highest and Best Use (HBU) study was funded by a special appropriation in the 2016 Legislative Session (HB1007). The purpose of the research and extension activities are to provide objective data that will allow greater transparency in quantifying the probability of HBU determinations for each soil type in a county.  The study explores three different approaches for HBU determination for agricultural land in South Dakota

HBU is defined as the reasonably probable use of property that results in the highest value. The four criteria HBU must meet are:

  1. legal permissibility
  2. physical possibility
  3. financial feasibility
  4. maximum productivity.

Progress

In the first year of the project, coordinator Matthew Elliott has led research and developed a tool to help producers understand the impact on ag land assessments if South Dakota changes the method of determining highest and best use. This tool is developed for broadly understanding policy impact changes and is for informational purposes only. Actual land values and assessments may deviate from results reported in the tool.  

Visit the Ag Land Highest and Best Use tool to:

  1. Select a county of interest.
  2. Select a variable of interest.
  3. Define a local area of interest to calculate statistics at a field or parcel level by selecting the square icon in the map and drawing a box around the area of interest within the map.

For more information about the research or use of the tool, contact Matthew Elliott

Approaches to Determine HBU

expected statewide ag land assessments
Expected ag land assessments based on each of the three methods tested

Current Method:

  • NRCS land capability class
  • crop rating
  • range rating
map of South Dakota counties displaying percentage changes for ag land value based on the probable use method
expected change in ag land assessments if using a most probable use method

Most Probable Use Method:

  • probability of cropland
  • crop rating
  • forage use value
map of South Dakota counties displaying percentage changes for ag land value based on the actual use method
expected change in ag land assessments if using a actual use method

Actual Use Method:

  • percent of cropland use (USDA-NASS cropland data layer)
  • crop rating
  • forage use value

Acknowledgements

We gratefully acknowledge that this project was supported by the South Dakota Agricultural Experiment Station at South Dakota State University and by Hatch project accession No. 1006890 from the USDA National Institute of Food and Agriculture.