Irrigation Pivots: How Much Value Do They Add to a Farm?
By Darren Ryals, Certified General Real Estate Appraiser
What Irrigation Pivots Do
“Can you believe what {fill in the blank} farm sold for? What’s happening?” I hear these questions almost daily, and I’m not always sure how to answer the second question. The answer to the first question is easy, “Yes, I know about that sale. Our large staff spends hours each week tracking down the most recent sales data in the market.” With the current crazy market conditions, we must make sure to use the most up-to-date sales we can locate. Chances are if the sale happened through a realtor or auctioneer, we have it in our database. Now the second question is harder to answer.
There are likely several factors playing into the current CRAZY price of land.
Below is a chart from the USDA showing farmland prices from 2007 to 2021. You can see that prices have been on the increase for years.
Length and Age Drive a Pivot’s Contributory Value
The contributory value of irrigation pivots is based mainly on length in feet and their age.
In general, our data show that once they exceed 10 years of age, their value to the farm decreases quickly and may show little or even no added value to the farm when compared to other sales of similar bare land in the same area. This can be true even if the pivot is in good working order and still in use. However, if an older pivot has been rebuilt or located in an area where pivots are frequently used, then even an older pivot may still have considerable value in its respective market.
Irrigation Pivots
Age and Added Value
How a typical pivot’s contributory value changes with age. Illustrative only.
More
value
Little
or none
~10 years
Even if in good working order and still in use
New
Older
Exception
Rebuilt Pivots
An older pivot that has been rebuilt may still have value.
Exception
Pivot‑Heavy Areas
Where pivots are frequently used, older ones can hold value.
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
Soil Type Matters Too5
The type of land a pivot is on also plays into how likely it is to add significant value to a farm.
If the soils are sandy, irrigation will be needed much more than on a farm that has poor drainage or lies lower than surrounding farms and is, therefore, naturally wetter.
Irrigation Pivots
What Drives a Pivot’s Value
Points of consideration in whether a pivot adds value to a farm.
Length in Feet
One of the two main drivers of contributory value.
Age
Value to the farm decreases quickly after 10 years.
The Area
Older pivots can hold value where pivots are frequently used.
Soil Type
Sandy soils need irrigation more than naturally wetter ground.
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
Conclusion
In conclusion, the area in question, the soil types present on the farm, and the age of a pivot are points of consideration in whether an irrigation pivot will be likely to add additional value to a farm. At Spurgeon Appraisals, we have experience in appraising all sorts of farms, including those making use of irrigation pivots. Email us today with your appraisal needs.
