Farmland Values and Cash Rental Rates In Ohio – Will Strong Markets Continue?

By:Barry Ward, Leader, Production Business Management Friday, October 22nd, 2021

Farmland prices have strengthened in recent months and there are a number of key fundamentals that will likely continue to support land values in the near term. High crop prices and margins along with last year’s COVID-19 related government payments and continued low interest rates have all contributed to stronger land markets. Higher production costs and recent minor decreases in crop prices may decrease profit margins this next year and take some strength out of the market but farmland will likely continue to see increases in value through the end of this year and into the next year. Similar factors have impacted cash rental markets in Ohio and will likely continue to pressure rental rates higher in the near term.

Recent data from the United States Department of Agriculture National Ag Statistics Service (NASS) August Land Values 2021 Summary shows Ohio Farm Real Estate increasing 3.9% from 2020 to an average of $6,600 per acre in 2021. Ohio Cropland (bare cropland) showed an increase of 5.3% from 2020 to 2021. Average Cropland value is $6,800 per acre in 2021 according to this survey. Pastureland value in Ohio increased 2.1% to $3,440 per acre in 2021. Average cash rents in Ohio increased 2.6% in 2021 to $160 per acre according to this survey. The National Ag Statistics Service (NASS) also summarizes average cash rental rates by county available through Ohio NASS: www.nass.usda.gov/Statistics_by_State/Ohio/Publications/County_Estimates/2021/OH_2021_cashrent_CE.pdf

Each year, Ohio State University Extension (The Ohio State University College of Food, Agricultural, and Environmental Sciences) conducts an Ohio Cropland Values and Cash Rents Survey. The Ohio Cropland Values and Cash Rents study was conducted from January through April in 2021. The opinion-based study surveyed professionals with a knowledge of Ohio’s cropland values and rental rates. Professionals surveyed were rural appraisers, agricultural lenders, professional farm managers, ag business professionals, OSU Extension educators, farmers, landowners, and Farm Service Agency personnel.

Ohio cropland varies significantly in its production capabilities and, consequently, cropland values and cash rents vary widely throughout the state. Generally, western Ohio cropland values and cash rents differ from much of southern and eastern Ohio cropland values and cash rents. The primary factors affecting these values and rents are land productivity and potential crop return, and the variability of those crop returns. Soils, fertility, and drainage/irrigation capabilities are primary factors that most influence land productivity, crop return and variability of those crop returns.

Other factors impacting land values and cash rents may include field size and shape, field accessibility, market access, local market prices, field perimeter characteristics and potential for wildlife damage, buildings and grain storage, previous tillage system and crops, tolerant/resistant weed populations, USDA Program Yields, population density, and competition for cropland in a region. Factors specific to cash rental rates may include services provided by the operator and specific conditions of the lease.

According to the Western Ohio Cropland Values and Cash Rents Survey, cropland values in western Ohio are expected to increase in 2021 by 3.8 to 5.3 percent from 2020 to 2021 depending on the region and land class. Cash rents are expected to increase from 3.6 to 3.9 percent depending on the region and land class. For the complete survey research summary go to: https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents

This survey and the results are reflective of the thoughts of survey participants in early 2021. Recent farmland sales would lead us to believe that farmland value has likely increased more than the 3.8 to 5.3 percent that the summary indicates for 2021. Continued high crop prices along with relatively strong predicted yields throughout much of Ohio have lent more strength to farmland markets in Ohio.

Others survey results in the eastern Corn Belt may be useful in gauging the magnitude of Ohio farmland value change thus far in 2021. The Federal Reserve Bank of Chicago (7th Fed District) surveys ag lenders in their districts each quarter. (The 7th Fed District includes parts of Michigan, Indiana, Illinois, Wisconsin and all of Iowa.) Their survey in July showed the value of good farmland in their district had increased by 14 percent from July 1, 2020 to July 1, 2021. The mid-year survey conducted by the Illinois Society of Professional Farm Managers and Rural Appraisers of their members revealed an increase of 20% in farmland values from the beginning of 2021. While Ohio is not Illinois nor does Ohio sit in the 7th Fed District, these surveys may give some guidance on the level of change in farmland values in Ohio in 2021.

When someone destroys your crops and trees, consider this law

By:Peggy Kirk Hall, Associate Professor, Agricultural & Resource Law Friday, October 22nd, 2021
ATVs in field

Fall often brings us questions about what a landowner can do when someone harms their crops, fields, and trees.  We’ve heard many stories of hunters, four-wheelers, snowmobilers, timber harvesters and others tearing up hayfields, causing corn and bean losses, harming trees, or taking timber.  Unfortunately, those incidents are not new to Ohio.  Back in 1953, the Ohio legislature enacted a law that addressed these types of problems.  In 1974, legislators revised the law to strengthen its penalty provisions, part of an effort to reform Ohio’s criminal laws.  That law still offers remedies that can help a landowner today.

The reckless destruction of vegetation law.  Ohio Revised Code (ORC) Section 901.51, the “reckless destruction of vegetation law,” is simple and straightforward.  It states that:

“No person, without privilege to do so, shall recklessly cut down, destroy, girdle, or otherwise injure a vine, bush, shrub, sapling, tree or crop standing and growing on the land of another or upon public land.”

Note the word “recklessly,” as that’s important to the statute.  Under Ohio law, a person  behaves recklessly if he disregards the risk that his actions are likely to cause certain results, such as harm or injury.  “Heedless indifference to the consequences” is another way to explain the term.  A person who flies through a hayfield on a four-wheeler, taking no precautions to avoid harming the crop, would likely fit this definition of behaving recklessly.  A timber harvester who ignores the marked property line and takes trees on the other side of it could also be behaving recklessly.

Criminal and civil options.  The recklessness element of a person’s behavior is why the law incorporates criminal charges.  A violation of ORC 901.51 is a fourth-degree criminal misdemeanor and could result in a fine of $250 and up to 30 days in jail.  What is useful to landowners, however, is that when legislators amended the law in 1974, they added “treble damages” to allow a harmed party to collect three times the value of the property destroyed.  If the value of hay lost to the four-wheeler was $500, for example, the treble damages provision allows the landowner to collect three times that amount, or $1,500.  Many court cases involve tree situations, and three times the value of a tree can result in a hefty award for the harmed landowner.

Another benefit of the reckless destruction of vegetation law is that a landowner doesn’t have to rely on a criminal charge being brought by local law enforcement.   While local law enforcement could bring a criminal charge against an offender and if successful, could request the treble damages for the landowner.  But if law enforcement does not bring a criminal charge, Ohio courts have held that a harmed party may bring a civil action against the offender and utilize the law’s treble damages provision.  Those treble damages can make it worthwhile to litigate the issue as a civil action.

The next time you’re frustrated by someone destroying your crops, trees and vegetation, the reckless destruction of vegetation law might be helpful.  If you can prove that the person was reckless and indifferent to causing the harm, consider using this powerful little law to remedy the situation.

Ohio legislative update

By:Peggy Kirk Hall, Associate Professor, Agricultural & Resource Law Thursday, October 21st, 2021
Chamber of the Ohio House of Representatives

Like the farm fields across Ohio lately, a little dust has been flying down at the Statehouse in Columbus.  Our legislators are back to work and considering several bills that could affect agriculture.  A few bills aren’t seeing much action, though.  Here’s a summary of recent activity and inactivity at the Statehouse.

Newly introduced bills

H.B. 440 and S.B.241 – Agricultural Linked Deposit Program.  This pair of bills introduced on September 30, 2021 by Representatives Swearingen (R-Huron) and White (R-Kettering) and Senators Cirino (R-Kirtland) and Rulli (R-Salem) is one of three bills in the “Ohio Gains Initiative” offered in partnership with Ohio Treasurer Robert Sprague.  The Initiative proposes three new investment reforms affecting agriculture, health systems, and higher education.  The agricultural proposal in H.B. 440 and S.B. 241 would expand the current Ag-LINK loan program that provides interest rate reductions of up to 3% on operating loans.  The bill would make the loans available to cooperatives in addition to farm operators and agribusinesses and would also remove the $150,000 cap on Ag-LINK loans.  It’s been referred to the House Financial Institutions Committee and the Senate Financial Institutions & Technology Committee.

Bills on the move

H.B. 175 – Deregulate certain ephemeral water features.  The bill addresses “ephemeral features”—surface water that flows or pools only in direct response to precipitation but that is not a wetland.  Under the proposal, ephemeral features would be exempt from water pollution control programs in Ohio, including the  Clean Water Act Section 401 Water Quality Certification Program, as proposed in the federal 2020 Navigable Waters Protection Rule now on hold.  The bill would also eliminate the certification review fee for ephemeral streams.  H.B. 175 passed the House on September 30, 2021, amidst strong opposition.  It awaits review before the Senate Agriculture and Natural Resources Committee.

H.B. 397 – Agricultural lease law.  A proposal to address termination dates and notice provisions for crop leases received its second hearing before the House Agriculture and Conservation Committee on October 12.  H.B. 397 would require a landowner who wants to terminate a crop lease that doesn’t address termination to do so by providing a written notice of termination to the tenant by September 1 of the year the termination would be effective.  Discussion at the committee hearing could result in a broadening of the bill to include pasture leases.

S.B. 47 – Overtime pay.  The Senate passed this bill on September 22, and it has since been referred to the House Commerce and Labor Committee.  The bill exempts certain activities from the requirement for an employer to pay overtime wages.  Under the proposal, traveling to and from a worksite would be exempt from overtime.  Performing preliminary or postliminary tasks and activities outside of work hours that require insubstantial periods of time, such as checking email or voice mail, would also be exempt.  The bill now moves to the House Commerce and Labor Committee.

Bills not moving

Several bills we’ve been watching have not generated continued interest at the Statehouse, including:

  • H.B. 95, the Beginning Farmers bill that would provide income tax credits for beginning farmers who attend approved financial management programs and for owners who sell land and agricultural assets to certified beginning farmers.  It passed the House in late June but was removed from the agenda when first scheduled for a hearing before the Senate Ways and Means Committee on September 28, 2021.
  • H.B. 30, the bill adding marking and lighting requirements to animal-drawn vehicles, also passed the House in late June but has not seen action since its second hearing before the Senate Transportation Committee on September 22, 2021.
  • H.B. 385, which would prohibit municipalities in the Western Basin of Lake Erie from discharging waste into those waters, fine those who do, and revoke NPDES permits for municipalities owning treatment works or sewerage systems within the Western Basin.  The bill received one hearing before the House Agriculture and Conservation Committee on September 28.
  • H.B. 349, which would place a moratorium on granting permits for a new construction or expansion of a regulated animal feeding facility in the Maumee watershed if the Ohio Department of Agriculture has determined that the phosphorus load in the Maumee River exceeded a specified number.  The House Agriculture and Conservation Committee has not scheduled the bill for a hearing since it was referred to the committee on June 16, 2021.

 

Bills now effective

S.B. 52, the bill addressing large-scale wind and solar facility development in Ohio, became effective on October 11, 2021.  The bill allows county commissioners to prohibit wind and solar developments and to establish restricted areas in the county that are off limit to the developments, gives county citizens an opportunity to place a restricted area designation on the ballot, increases local awareness and engagement in review of a proposed facility, and requires decommissioning plans and bonds for approved developments.  Learn more about S.B. 52 with our law bulletins and videos on the new laws, available in our energy law library.

Hear our next review of state and federal legislation in Farm Office Live on November 17 and 19, 2021.  More information is available here.

“Identifying Trees in Winter” for woodland owners and enthusiasts on November 12th at Vinton Furnace State Forest

by 

Fall is in the air, and many of the trees in Southeastern Ohio have already shed their leaves. This makes tree identification more difficult, but there are still many clues that you can use to identify trees in their leafless state. “Identifying Trees in Winter” will provide you with the knowledge to differentiate among the variety of trees on your property in the coming winter months  Participants in this program will:

  • Develop an eye for bark and tree shape to aid in winter tree identification
  • Learn to use bud and twig characteristics to identify trees
  • Become familiar with tree fruits like acorns and other clues that can be found on the ground
  • Spend the day exploring the forest sites at the Vinton Furnace State Forest with several foresters and natural resources professionals
  • Visit a variety of wooded sites to learn about their contribution to the diversity of Ohio’s Appalachian forests

“Identifying Trees in Winter” will take place at the Vinton Furnace State Forest near McArthur on November 12,  2021, from 9 AM to 3 PM.  The program will take place entirely in the field and will include a considerable amount of walking on uneven terrain, so be sure to bring your hiking boots and dress accordingly. We will follow the COVID-19 protocols that are in place at the time.   Please bring a face covering to use when:

  • you are indoors and not fully vaccinated
  • it makes you comfortable

A registration fee of $12 per person (payable on the day of the event by cash or check to Vinton SWCD) entitles participants to program materials and a box lunch.  Registration is required.  Please RSVP on or before November 8 by emailing Dave Apsley at apsley.1@osu.edu, or by calling Cheri Porter or Dave Runkle at the Vinton SWCD (740-596-5676).

The Vinton Furnace State Forest is in a very remote portion of Vinton County.  Signs will be posted on the morning of the event along the route from both entrances. For a map and directions to help you find the training center at the Vinton Furnace State Forest, click : Directions – Experimental Forest

For more information contact Dave Apsley (apsley.1@osu.edu).

“A Day in the Woods” and the “2nd Friday Series” are sponsored by the Education and Demonstration Subcommittee of the Vinton Furnace State Forest with support from Ohio State University Extension, ODNR-Divisions of Forestry and Wildlife, USDA-Forest Service (Northern Research Station, State and Private Forestry and the Wayne NF), USDA-Natural Resources Conservation Service, Ohio Department of Agriculture, Vinton-Hocking-Athens Soil and Water Conservation Districts, Central State University Extension, the National Wild Turkey Federation, Pixelle Specialty Solutions, Ohio Bird Conservation Initiative, Ohio Tree Farm Committee, U.S. Fish and Wildlife Service, Hocking College, the Ruffed Grouse Society, Ohio Forestry Association Foundation and Ohio’s SFI Implementation Committee. Since 2012, “A Day in the Woods” has offered nearly 80 programs with more than 100 presenters for nearly 4,000 woodland owners and enthusiasts just like you.

Farm Office Live Webinar Slated for October 13 &15

Farm Office Live provides the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other issues dealt with in your farm office. Targeted to farmers and agri-business stakeholders, our specialists digest the latest news and information and present it in an easy-to-understand format.

Photo of Farm Office Team Presenters

OCTOBER 13 & 15 FARM OFFICE LIVE TOPICS

  • Introducing……Seungki Lee,  new Ag Economist
  • Federal Legislative Update
  • Farm Tax Implications from Federal Legislative Proposals
  • State Legislative Update
  • Ohio Farm Business Analysis 2020: Costs & returns for corn, soybeans and wheat
  • Crop Costs and Margins for 2022
  • Farm Office Program Updates
  • Panel Discussion: Considerations for End of Year Tax Planning with returning Special Guest Robert Moore, Esq.
  • Q&A

To register, visit the Farm Office Live registration site. Register once and you will recieve reminders for future sessions.

Remaining 2021 dates: 

October 13 7 pm – 9 pm
October 15 10 am – 12 pm
November 17 7 pm – 9 pm
November 19 10 am – 12 pm
December 15 7 pm – 9 pm
December 17 10 am – 12 pm

LADIES ON THE LAND WORKSHOP

Communicating and Negotiating Landowner and Tenant Issues with Ease

Program cost: $25 per person

Registration fee includes all materials; boxed lunch included with in-person workshop.

Registration and payment deadline is October 15, 2021.  Click here to register.

For questions, please contact Beth Scheckelhoff (scheckelhoff.11@osu.edu; 419-523-6294) or the host office:
October 19, Morrow County – 419-947-1070
October 20, Putnam County – 419-523-6294
October 21, Ross County – 740-702-3200
November 8 and 9, 6:30 to 9:00 pm Virtual Workshop (two-night series). 419-523-6294

Dry Weather Accelerates Rapid Decline of Soybean Harvest Moistures. What Are the Economic Ramifications?

by: Mike Estadt, OSU Extension Educator

After a rainy Farm Science Review, farmers took to the fields last week to begin harvest of corn and soybeans. Reports around the state indicate a soybean crop that is surprisingly dry. August weather conditions played a role in the rapid dry down of both corn and soybeans. Extension educators from around the state reported in this week’s Crop Observation Recommendation Network call and social media posted cab videos, confirm very good soybean yields and harvest moistures under 10% in many incidences.

With these extremely dry crop conditions farmers can experience economic losses during harvest. The first and most obvious loss is what’s left in the field from Gathering Unit Loss, by way of shattering of the soybean pods, low pod set beans that remain attached to stubble, and soybeans that pass through the combine through cylinder and separation loss. This can range anywhere from 5% to 20% depending upon the year. Reducing this as little as 3% to 4% can make a difference to the bottom line. 1

When a farmer delivers soybeans to the elevator, if the moisture is higher than 13% there is a penalty in the form of moisture shrink, that deducts from the final bushel calculation. So, what is the penalty for delivering soybeans that are too dry? That simply is the lost dry matter (bushels) that was sacrificed by not harvesting earlier and capturing that moisture.

If I could show you how to gain an extra profit of $23.98 per acre by harvesting soybeans at 13% instead of 10% with 60-bushel beans and a cash price of $12.00 would you read the following article from the Crop Watch Newsletter from the University of Nebraska-Lincoln? This is a very well written article to help you gather more beans from the field as well as deliver more bushels to the elevator by managing harvest moisture.

Harvest Soybeans At 13% Moisture Nebraska Copwatch Newsletter by Thomas Dorn, Extension Educator. https://cropwatch.unl.edu/harvest-soybeans-13-moisture

1. Beasley, E.O. Reduce Soybean Harvest Loss. North Carolina Cooperative Extension. http://ipm.ncsu.edu/soybeans/agronomy/soybean_loss.html

Fungi of the Field and Woods: Do You Really Know Who They Are? – Friday, October 15, 2021

Published on
Event Promotion

People are seeing fungi ‘popping-up’ all over. You will want to tune in for this Friday’s OSU Woodland Stewards Escape to the Forest on Fungi in the Field and Woods with Curtis Young.

The virtual program will be held on Friday, October 15 from 10 am – 12 pm. To register for the upcoming session, click here: registration

If that date and time doesn’t work for you, the session will be recorded and the presentation will be shared on the Woodland Stewards website at a later date. Here is the page where the video will be posted: https://woodlandstewards.osu.edu/resources/webinars

More Information

OSU Extension, Wild Mushroom FactSheet

Ohio’s Agricultural Sales Tax Exemption Laws

Written by Peggy Kirk Hall, Associate Professor, Agricultural & Resource Law

If you’ve ever claimed a sales tax exemption on a purchase of farm goods, you may have experienced some confusion over whether you or the good is eligible for the exemption.  That’s because Ohio’s sales tax law is a bit tedious and complicated.  The law has several agricultural exemptions, but it can be challenging to understand who can claim them and what types of goods and services are exempt.  Those are the reasons for our newest law bulletin, Ohio’s Agricultural Sales Tax Exemption Laws.  We walk through the different sales tax exemptions that apply to agriculture, offer examples of goods that do and do not qualify for the exemptions, explain who can claim an exemption and how to claim it, and explain what happens when sales taxes are overpaid or not correctly paid.   We also offer steps a farmer can take to obtain the full benefits of Ohio’s agricultural sales tax exemptions.  The bulletin is available in our law library and through this link.