Calculating marginal land value

How do you calculate the true value of land to decide where to implement environmental schemes that deliver public goods, when your margins can vary year to year? Trials at Strategic Cereal Farm East are aiming to calculate agriculture land value for costed recommendations that are beneficial for agriculture and the environment.
  • Start: September 2020
  • End: September 2021


To classify areas of land according to their agricultural value and develop costed recommendations that optimise agriculture and the environment

Why calculate marginal land profits? 

Under the future agricultural policy, farmers will be paid for work that enhances the environment. Farmers need to be able to identify the opportunities for implementing schemes on their farms that deliver public good. Farmers must make these decisions based on the agricultural value of their land. Whilst yield is often a key driver in profitability, it is important to consider input costs.

Areas of land with low gross margin land will change depending on crop, time and space. An area might be high yielding one year, but it doesn't mean that it will be the next. Areas might also perform better or worse under different crops and crop types, such as spring and winter drilled. So, it is important to carry out the analysis across seasons and for the whole rotation and identify causes of variation in productivity.

How will we analyse marginal land cost-benefit recommendations? 

Data sets

The data sets will include;

  • Farm rotation
  • Yield
  • Soil and satellite imagery maps
  • Farm costings
  • Drainage maps.

In 2017, the farm was mapped for Soil Electrical Conductivity (EC) which provides a good indicator for clay content and mineralogy. Soil water content, bulk density, organic matter, soil temperature, and salinity can also impact EC.

Historic data sets, such as the 1947 post-war aerial survey, will be used for insight into variations in soil properties due to historic land use.

Annual gross margin

The research team will convert historic yield maps to a spatial referenced gross output data set across the farm. This will be done for each crop and year based on that year’s crop sale price.

Geo-referenced gridded variable costs will also be calculated. The grid size is determined by the resolution of combine data and variable rate applications. Costs will include variable and non-variable inputs as well as the establishment and combining costs.

This will provide a fine resolution gross margin map per field calculated by subtracting the variable costs from the output. The team will identify marginal land by areas with the lowest gross margin.

Agricultural value and resilience

The researchers will calculate agricultural value will by crop, crop type, year, and across the rotation. They will also consider how taking areas out of agricultural production might impact field management. For example, obstructing gateways or changing the shape of fields. To do this, they will combine the agricultural value maps with satellite images, soil scans, soil nutrient data, and historic aerial imagery.

The farm electrical conductivity (EC) maps will be analysed with the combine data and gross margin data. This will allow the researchers to determine any relationships between EC and crop productivity for a given year and crop. This analysis will be completed at a field and multi-field scale for individual crops in the rotation. Using this information, the researchers will classify areas that perform poorly and well well in dry and wet years. This will allow them to assess yield stability across time and space and identify interactions with weather patterns. Soil maps and soil test results will also be synthesised with this data to look for patterns of resilience.

The researchers will identify areas into 3 categories. Those with the highest and lowest agricultural value and those areas with the smallest year-to-year fluctuations. They will do this for:

  • each crop in each season
  • each crop across seasons
  • and a total across rotation productivity

Cropping plans

The researchers will design cropping plans based on the current crop rotation. These short and long-term plans will be designed to minimise the economic impact on the farm.

Energy usage per tonne

Another key public good is adaptation to and mitigation of climate change. Whilst the work at the East is looking at productivity, it is important to consider the environmental sustainability of farms. A key part of this is annual calculations of energy input per tonne of production. This work will be completed by Dr. Douglas Warner (University of Hertfordshire) using techniques drawn from Life Cycle Assessment (LCA).

Using the input and yield maps, energy use and emissions will be mapped across fields, within fields, and across the rotation.

Crops, operations, and areas on the farm where there is high energy input or emissions per functional unit can be identified. These areas can then be benchmarked to identify inefficient operations or areas of land. Benchmarking will also allow any future reductions in energy use and emissions to be quantified.

Energy and emissions profiles for different inputs will be developed. These can then be applied to the input and yield maps, to derive energy use and emissions within fields, and thus for whole fields.

Useful resources

Managing uncropped land to enhance biodiversity benefits of the arable farmed landscape

Exploiting yield maps and soil management zones

Our Strategic Farms are an opportunity to see how to use our research on a commercial farm. Find out more about our Strategic Cereal Farm East Programme

Image of staff member Teresa Meadows

Teresa Meadows

Knowledge Exchange Manager - Cereals and Oilseeds