By: Barry Ward, Leader, Production Business Management, Director, OSU Income Tax Schools, College of Food, Agricultural and Environmental Sciences, OSU Extension, Agriculture & Natural Resources
Continued high crop prices, reasonable crop margins and relatively healthy farm balance sheets over the last 2 years have given strength to farmland markets. Higher input costs over the last two years together with rising interest rates have offset some of this support but farmland values continue to increase. Many of these same factors have given support to the farmland rental markets which have also seen increases last year and are expected to see additional increases in 2023.
Results from the Western Ohio Cropland Values and Cash Rents Survey show cropland values in western Ohio are expected to increase in 2023 by 6.1 to 10.7 percent depending on the region and land class. This follows increases ranging from 6.9 to 13.8 percent from ’21 to ’22.
Cash rents are expected to increase from 5.0 to 6.7 percent in 2023 depending on the region and land class. This is on top of rental increases of 1.3 to 3.8 percent from 2021 to 2022.
Ohio Cropland Values and Cash Rent
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 the cropland in a region. Factors specific to cash rental rates may include services provided by the operator and specific conditions of the lease. This fact sheet summarizes data collected for western Ohio cropland values and cash rents.
Study Results
The Western Ohio Cropland Values and Cash Rents study was conducted from January through April in 2023. This 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.
The study results are based on 190 surveys. Respondents were asked to group their estimates based on three land quality classes: average, top, and bottom. Within each land-quality class, respondents were asked to estimate average corn and soybean yields for a five-year period based on typical farming practices. Survey respondents were also asked to estimate current bare cropland values and cash rents negotiated in the current or recent year for each land-quality class. Survey results are summarized below for western Ohio with regional summaries (subsets of western Ohio) for northwest Ohio and southwest Ohio.
The complete survey summary can be accessed and downloaded at Farm Office:
https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents