Results of the North Dakota Land Valuation Model for the 2019 Agricultural Real Estate Assessment

Abstract

This report summarizes the 2019 results of the North Dakota Land Valuation Model. The model is used annually to estimate average land values by county, based on the value of production from cropland and non-cropland. The county land values developed from this procedure form the basis for the 2019 valuation of agricultural land for real estate tax assessment. The average value for all agricultural land in a county from this analysis is multiplied by the total acres of agricultural land on the county abstract to determine each county’s total agricultural land value for taxation purposes. The State Board of Equalization compares this value with the total value assessed to agricultural property in each county. The average value per acre of all agricultural land in North Dakota increased by 2.72 percent from 2018 to 2019 based on the value of production. The formula cost of production index value used in the 2019 analysis was 209.56. The formula capitalization rate was 4.51 percent. The capitalization rate had a larger effect on higher valuations compared to recent years. Cropland value increased, on average, 2.64 percent. Across individual counties, the cropland valuation ranged from a decrease of 4.29 percent to an increase of 6.99 percent. County values had small increases and decreases depending on crop mix and cropland to non-cropland percentages. Non-cropland values increased 5.52 percent. Generally, valuations for counties with a higher percentage of livestock increased partly due to increased calf prices for the current year replacing the lower oldest year in the data set. Changes in market value are included for comparison. Market value data are from the annual County Rents and Prices survey conducted by the North Dakota Department of Trust Lands.