The value of farmland in northwest Ohio

Many farmers raise crops on ground that they rent from other people. Before they plant the next crop, they negotiate the land rental rate for the coming year. Some agreements are done annually, but often they may be established for several years. Some landowners value the relationship they have established with a farmer over the years and are grateful the farmer has taken care of their investment. In these situations, the rental rate is often based on the "going rate," but also may consider whether the farmer has had a good or poor crop year. In other situations, the landowner will rent to the farmer who is willing to pay the largest amount. Several farmers may want to rent a certain piece of ground because of its proximity to their home operation, its production potential, or the desire the expand their operations. In these cases, rental rates are often higher than the "going rate" for an area. To assist in determining the going rate, The Ohio State University Extension with assistance from the university's Department of Agricultural, Environmental, and Development Economics complete an annual survey to estimate current and future trends of cropland values and cash rents. The results of this survey for Western Ohio Cropland Values and Cash Rents has recently become available and can be found at https://farmoffice.osu.edu/sites/aglaw/files/site-library/farmmgtpdf/WesternOhioCroplandValuesCashRents2019-20Final.pdf Surveys were completed by individuals knowledgeable about cropland values and rental rates such as farm managers, rural appraisers, agricultural lenders, OSU Extension educators, farmers, landowners and Farm Service Agency personnel. The surveys were completed in early 2020. One hundred sixty-seven surveys were completed, analyzed and summarized. Individuals were asked to give responses based on three classes of land in their area: average yielding, top yielding and poor yielding. They were asked to estimate five-year corn and soybean yields for each land class based on typical farming practices. Individuals were asked to estimate current bare cropland values and cash rents negotiated in the current or recent year for each land class. The survey revealed that Ohio cropland values and cash rental rates were projected to decline slightly in 2020 by 1.5-2.6% and cash rents to be slightly lower by 0.7-2.0%, depending on region and land class. This is the seventh year in a row that cropland values and cash rents have been projected to decrease from the previous year. Survey results are not available for an individual county, but by region. Hancock and its surrounding counties are part of the 19 counties included in the northwest Ohio section. Survey results showed that the average category land in northwestern Ohio had an estimated mean yield of 176.9 bushels per acre for corn and 53.6 bushels per acre for soybeans. Top cropland had an estimated corn yield average of 215.5 bushels per acre and 65.9 bushels for soybeans. Land in the poor category had an average yield of 142.0 bushels for corn and 41.2 bushels for soybeans. Yield values were similar to the previous year survey for all cropland classes. Surveys showed that cropland considered in the average category was valued at $6,791 per acre in 2019. It was expected to be valued at $6,615 in 2020, a projected decrease of 2.6%. Rental rates in 2019 for average land was estimated to be $184 per acre, and was projected to be $182 in 2020, a decrease of 0.9%. For the top cropland category, the survey showed an average price in 2019 was $8,453 per acre. The same land was projected to be valued at $8,262 per acre in 2019, a 2.3% decrease. Land rental rate average for "top" cropland was $235 per acre in 2019 and was expected to be $232 in 2020, a decrease of 1.3%. Surveys show a projected drop of 2.5% in land prices in 2020 compared to 2019 for poor performing land. Survey value of "poor" land in 2019 was $5,328 and was projected to be $5,196 in 2020. Land rental rate for "poor" land was $141 per acre in 2019 and was expected to be $140 in 2020, a 0.7% decrease. This survey is only one tool an individual may use to establish a price agreement for farmland sales and rental rates. Markets are often localized and based on many factors that a survey cannot measure. Other sources for average cash rental rates may be found in the Ohio State University Crop Budgets and the National Agricultural Statistics Services; however, these may be state averages. The cash rental rate should be available upon request for public owned farm land that is leased by a county government. Lentz is Extension educator for agriculture and natural resources for the Ohio State University Extension Service in Hancock County.