How Landowners Can Leverage Data in Agriculture to Optimize Land Lease Practices

Apr 25, 2024

Data in agriculture: it’s a topic growing increasingly important as more farmers and landowners take advantage of it to increase yields and productivity. Amid concerns about privacy, security, and data ownership & governance, everyone is looking to answer the question: how do we get the most value of our agriculture data? 

While much of the conversation around data in agriculture centers on farm and field performance, it can also be a powerful tool for landowners to optimize their land lease practices. Here are some of the ways to make that happen. 

What tools do farmers and landowners have to measure & analyze data in agriculture? 

As ag technology becomes more advanced—particularly in the areas of sensors, satellites, and surveillance—the insights available to farmers and landowners is growing exponentially. Let’s briefly look at the primary ways in which this data is captured and analyzed. 

Satellite imagery

Satellites have been capturing images of farm fields for decades, leveraging NDVI (Normalized Difference Vegetation Index), NDRE (Normalized Difference Red Edge Index), and NDMI (Normalized Difference Moisture Index) to gain detailed insights into farm fields.

However, as machine learning (ML) and artificial intelligence (AI) become more adept at analyzing this imagery, the insights available from these data can be made more relevant and address specific questions. This can include agronomic concerns, but also details on field performance, security, and land management practices. 

What’s more, AI and ML algorithms can correlate field-specific data with other sources, like weather patterns, to give farmers the best information to make the best decisions for their field. 

IoT and smart sensors

As network connectivity spreads across Rural America, the Internet of Things (IoT) is becoming more popular among farmers and farmland owners. Some of the more relevant use cases include: 

  • Crop management IoT devices gather data on plant health and leaf moisture to detect diseases quickly and adjust irrigation schedules

  • Soil moisture sensors help agronomists determine water levels and make necessary irrigation adjustments

  • Electrochemical sensors analyze pH, soil nutrients, and other parameters to measure soil fertility and drive seed planting and fertilizer application decisions

  • IoT sensors attached to animals monitor health conditions, log activities, and forestall potential infections

Aerial vehicles

In addition to satellite imagery, unmanned aerial vehicles (UAVs) can capture data on farm performance. Often these drones feature sophisticated measurement equipment, including ultrasonic echoes, GPS, and lasers. 

While most farms use drones for seeding and crop spraying, they also have the ability to gather data on the farm, including high-resolution data on plant conditions, helping you to better detect stressed areas and potential infections. This is especially helpful for farmers who manage multiple, geographically distant operations. 

Advanced analytics & precision farming

Most data coming in from sensors is unstructured and, thus, unusable and requires processing and analysis to become useful. Fortunately, there are a growing number of robust data platforms that not only analyze data in agriculture, but surface the insights farmers need to make the most critical decisions. 

How data in agriculture can strengthen the farmer-landowner relationship

Data in agriculture, while certainly effective at making farms more productive, can also help landowners optimize their land leasing practices in three main ways. 

Cash rent to farm value disconnect

As farmland values increase, landowners are responsible for increased carrying costs: property taxes, insurance, liability, etc. Because of the way cash rental agreements are currently negotiated—namely, using USDA published figures based on farmer self-reporting—tenants indirectly set their own rates. 

To account for increased carrying costs, landowners need to renegotiate their cash rental rates. This requires real-time data on the specific piece of land that can account for above-average productivity, highly profitable crops, above-average soil and land quality, and other factors that apply to that specific piece of land. 

This is where CommonGround’s CashRenstimate tool comes into play. It’s an objective measure of a land’s true value, taking into account over fifty demographics and analyzing them according to a multiple linear machine learning algorithm which finds the most meaningful variables and weighs them more heavily than the others. 

For example, North Dakota produces more canola and winter wheat than Illinois. As such, canola and winter wheat weigh more heavily in the North Dakota CashRentstimate than they would in Illinois.

This approach, powered by data in agriculture, provides landowners with an objective, up-to-date picture of their land’s true value, which they can bring into negotiations and get fair value for their land. 

Market analytics & predictions

As mentioned above, real-time farm data can be correlated with external factors. For landowners in crop share agreements, understanding these relationships can be key to predicting their potential of their land to generate revenue into the future, which is important when renewing leases.

Currently, the agriculture market faces a number of challenges that can impact crop prices:

  • Increasing interest rates until the latter half of 2024

  • Inflation rates that, while slowing, are still concerning (2.1% domestically and 5.4% abroad)

  • Uncertain food price outlook, with projections ranging from a potential 5.5% increase to 7.8% decrease

  • Unstable geopolitical conditions as conflicts in Ukraine and the Middle East continue

With advanced market analytics correlated with field performance data, landowners can plan more strategically the crops they want on their land in future season, future lease agreement terms, and even whether they want to continue on with the same farmer. 

Measuring tenant farmer performance

IoT devices, as mentioned above, give farmers access to more data than before and help them adjust their performance accordingly. Landowners, however, can also use this real-time data to gain insights into farmers performance and, if necessary, make suggestions for adjustment.

For instance, if a soil sensor indicates a higher pH level than the agreed upon fertilizer should cause, landowners can check on the farmer’s planting decisions and verify that they’re remaining in compliance with the agreement.

Because IoT sensors enable this insight in real time, owners can step in and make changes before they balloon into larger problems. 

Final thoughts on the use of data in agriculture

Data in agriculture can be a powerful tool, but only when applied to relevant questions. While the industry focus is mainly on use of data to improve crop performance and productivity, there are multiple use cases that enable landowners to strengthen their operations and maximize their land lease agreements. 

If you’re looking to increase the value of your land, check out the CommonGround marketplace, and we’ll show you what a fair, objective rental rate looks like.