Rich Soil Reaps Rewards In Ohio
By GARY BROCK
How much is your farm land worth? The answer to that question is usually pretty easy. A farmer can call his County Auditor’s Office and get the latest appraised value of his land, and he can also contact a local realtor to determine his land’s market value, or sale price.
A farmer can also calculate his land value based on the state of Ohio’s “CAUV” formula.
So an acre of farm land can have several “values” depending on what this value is needed for.
In 2012, however, the easiest answer to the question, “How much is your farm land worth?” is this: “It’s worth a whole bushel of money more than it was a year ago!”
If fact, it is very possible that Ohio’s agriculture land is worth more today than at any time in history. And that is in real dollars or adjusted for inflation dollars.
To many people, that comes as a startling revelation. But to those in the agriculture business, or those who deal with appraising the value of land, it is no surprise at all.
From many angles, it has never been a better time to be a farmer.
Now I will tell you that there are a lot of farmers who will scoff at that notion. At least they will scoff at it publicly. But I suspect that deep inside, they probably know that despite things like the 2012 drought, the rash of regulations and laws and government paperwork, the recession and competition overseas, what farmers are earning for what they produce could be at an all-time high.
And that is part of what is driving these record agriculture land values.
According to the U.S. Department of Agriculture’s “Land Values 2012 Summary” the value per acre of Ohio’s farm land rose 13.6 percent over 2013, with an average price per acre of about $5,000.
That’s back up by county after county where property reappraisals are being done this year. A survey by ACRES of Southwest Ohio found that all the counties doing these reappraisals this year — required of each Ohio county every six years by the county Auditor — were showing significant increases in agricultural property values. That is even when the value of residential property in those same counties was going down.
Of course, for property tax purposes, the appraised value of land and the market price of the land are two different things. But both numbers are trending upward here in Ohio.
A third measure is also showing farm land value going up. The CAUV — Current Agricultural Use Value — is also way up. In Highland County, for instance, this measure of farm land value jumped more than 40 percent in the last year.
CAUV is a real estate tax assessment program which gives owners of farmland the chance to have their parcels taxed according to their value in agriculture, rather than full market value. It is the result of a referendum passed by Ohio voters in November, . Most farmers take part in this program because it means a savings for them in real estate taxes.
But that is the “other side” of all this good news. Ohio State Extension expert Barry Ward, predicted recently that while 2012 was great for Ohio farm land value, 2013 might just be even better. That’s great news … sort of.
Because as the value of the land rises, so does the tax obligation, regardless of which measure is used to calculate what the land owner owes.
As we start 2013 this month, predictions are very positive about land value, and that is based on what most people expect to be record prices for crops per acre this year. That predicted increase should offset easily any increase in taxes for farmers when they go to pay their tax bills next year.
At least, if all goes according to plans…
(Gary Brock is editor of ACRES of Southwest Ohio.)