Rich Soil Reaps Rewards In Ohio

By GARY BROCK

gbrock@recordherald.com

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.)

Posted by Tina Murdock on Jan 10 2013. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.