Farm Rents

Soybean Farmers Invited to Participate in Survey

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County & David Marrison, Extension Educator, ANR, Coshocton County

Dr. Gary Schnitkey, University of Illinois, and Dr. Carl Zulauf, Emeritus Professor, The Ohio State University, are conducting an online survey of soybean growers in nine soybean producing states, including Ohio. The nine states represent 75% of U.S. soybean production.

The researchers intend to measure the impact of each communication channel – mass media, social media, and interpersonal meetings – on farmers’ decision-making to adopt a new digital technology. This survey is focused on soybean producers in these states: Illinois, Iowa, Minnesota, Indiana, Nebraska, Missouri, Ohio, South Dakota, and North Dakota. The results will support new research and contribute in a practical way to increase knowledge about the most efficient communication channels for the dissemination of digital agriculture technologies.

The survey takes approximately five minutes to complete, and all data will be kept confidential.  If interested, you can provide your email address to receive a copy of the final survey results.

If you are interested in participating in this survey, please click here: https://go.illinois.edu/farmdocsurvey

 

Ohio Farm Custom Rate Survey 2022 Responses Requested

by: Barry Ward, Leader, Production Business Management, OSU Extension, Agriculture & Natural Resources

 The Ohio Farm Custom Rates Survey data collection has launched once again. The online survey for 2022 is available at: https://go.osu.edu/ohiofarmcustomratesurvey2022

A large number of Ohio farmers hire machinery operations and other farm related work to be completed by others. This is often due to lack of proper equipment, lack of time or lack of expertise for a particular operation.  Many farm business owners do not own equipment for every possible job that they may encounter in the course of operating a farm and may, instead of purchasing the equipment needed, seek out someone with the proper tools necessary to complete the job. This farm work completed by others is often referred to as “custom farm work” or more simply “custom work”. A “custom rate” is the amount agreed upon by both parties to be paid by the custom work customer to the custom work provider.

Custom farming providers and customers often negotiate an agreeable custom farming machinery rate by utilizing Extension surveys results as a starting point. Ohio State University Extension collects surveys and publishes survey results from the Ohio Farm Custom Survey every other year. This year we are updating our published custom farm rates for Ohio.

We kindly request your assistance in securing up-to-date information about farm custom work rates, machinery and building rental rates and hired labor costs in Ohio.

This year we have an online survey set up that anyone can access. We would ask that you respond even if you know only a few rates.  We want information on actual rates, either what you paid to hire custom work or what you charged if you perform custom work. Custom Rates should include all ownership costs of implement & tractor (if needed), operator labor, fuel and lube. If fuel is not included in your custom rate charge there is a place on the survey to indicate this.

 You may access the survey at: https://go.osu.edu/ohiofarmcustomratesurvey2022

If you prefer a document that you can print out and fill out by hand to return, email Barry Ward at ward.8@osu.edu

 

The deadline to complete the survey is March 31, 2022.

 

 

 

 

2022 Agricultural Outlook and Policy Meetings Set to Kickoff

by: Mike Estadt, OSU Extension, estadt.3@osu.edu

The Ohio State University Extension is pleased to announce the Regional Ag Outlook and Policy Meetings for 2022.  Meetings will be held around the state beginning the last of January and ending in March.

Speakers will address a myriad of topics of agriculture interest  here in Ohio as well as across the Corn Belt.  Programs will include presentations on Grain Market Outlook, Ag Law Updates, Dairy Industry 2022, Ohio’s Changing Climate, Farm Policy and Farm Bill, SB 52: Utility Solar Legislative, Farm Real Estate and Cash Rent Trends, Ag Input Price Projections and Federal Tax Updates.

New to this year’s program  is the statewide sponsorship and support of the Ohio Corn and Wheat Growers Association.

“We are proud to partner with Ohio State University  Extension educators across the state to support this year’s agronomy, outlook and grower meetings.  We value this partnership and look forward to supporting programs that bring value to our members farm businesses”, according to Brad Moffitt, Director of Membership and Market Development for the Ohio Corn and Wheat Growers Association.

The following table lists the scheduled Outlook programs with contact information to register.

 

Hosts: Union/Madison/Champaign

DATE: January 28th

Time: 8:30 a.m.

Place: Der Dutchman Restaurant, 445 S. Jefferson Ave, Plain City, Ohio  43064

Speakers:

Barry Ward, Farm Inputs, Rent and Real Estate

Ben Brown, Grain Marketing Outlook

Robert Moore, Farm Transition and Taxes

Contact  Amanda Douridas (douridas.1@osu.edu)

Registration: Go.osu.edu/PlainCityOutlook

 

 Host: Defiance County

Date: January 31, 2022

Time: 6:00-9:00 p.m.

Place: Jewell Community Center, 7900 Independence Road, Defiance, OH  43512

Speakers:

Barry Ward, Farm Inputs, Rent and Real Estate

Matt Roberts, Grain Marketing Outlook

 

Contact: Bruce Clevenger (Clevenger.1@osu.edu)

Registration:  https://defiance.osu.edu/
Host: Wayne County

Date: January 13, 2022

Place: Buckeye Ag Museum, 877 West Old Lincoln Way,  Wooster, OH   44691

Time: 8:00 a.m-12:00

Speakers:

Barry Ward, Farm Inputs, Rent and Real Estate

Peggy Hall,  Ag Law Update

Aaron Wilson, Ohio’s Changing Climate

Dianne Shoemaker, Dairy Industry 2022

 

Contact: Haley Zynda (zynda.7@osu.edu)

 Host: Clinton County

Date January 14, 2022

Time: 7:00 a.m. Breakfast  7:30 a.m. Program

Place: OSU Extension Office, 111 S. Nelson Ave. Wilmington, Ohio  45177

Speakers:

Barry Ward Farm Inputs, Rent and Real Estate

Peggy Hall, Ag Law Update

Aaron Wilson, Ohio’s Changing Climate

Eric Romich, SB 52 Solar Farm Legislation

Carl Zulauf,  Farm Bill 2023

Contact:  Tony Nye (Nye.1@osu.edu)
Host: Crawford County

Date: February 1, 2022

Place: Wayside Chapel Community Center, 2341 Kersetter Rd., Bucyrus, OH 44820

Time: 5:00 p.m.

Speakers:

Peggy Hall Ag Law Update

Carl Zulauf Farm Bill 2023

Matt Roberts, Grain Marketing Outlook

Aaron Wilson  Ohio’s Changing Climate

 

Contact: Jason Hartschuh (hartschuh.11@osu.edu)

 Host: Pickaway County

Date  Feb 2, 2022

Place: Emmett Chapel 318 Tarlton Rd, Circleville, Ohio 43113

Time: 8:00 a.m.

Speakers:

Barry Ward Farm Inputs, Rent and Real Estate

Matt Roberts,  Grain Marketing Outlook

Carl Zulauf,  Farm Bill 2023

 

Contact: Mike Estadt (estadt.3@osu.edu)
Host: Muskingum County

Date: February 14, 2022

Place: Muskingum County Convention Center, 205 N. 5th St. Zanesville, Ohio 43701

Time: 9:00 a.m.

Speakers:

Barry Ward  Farm Inputs, Rent and Real Estate

Peggy Hall,  Ag Law Update

Matt Roberts,  Grain Marketing Outlook

Carl Zulauf,  Farm Bill 2023

Contact: Clifton Martin (martin.2242@osu.edu)

 Host:  Darke County

Date: March 25, 2022

Place: Romers Catering,118 E Main St, Greenville, OH 45331     

Time  10:00-2:00 p.m.

Speakers:

Barry Ward,  Farm Inputs, Rent and Real Estate

Peggy Hall Ag Law Update

Aaron Wilson  Ohio’s Changing Climate

Contact Taylor Dill (Dill.138@osu.edu)

 

 

Ladies on the Land Workshops Offered Across Ohio

Ohio has 13.6 million acres of farmland that is increasingly owned, managed, and leased by women of all ages. To help women better navigate farmland leasing issues, Ohio State University Extension developed a “Ladies on the Land” workshop in cooperation with USDA’s North Central Risk Management Education Center. The workshop provides practical information to help women address their questions and concerns about leasing farmland in Ohio.

2022 Ladies on the Land Flyer

Each Ladies on the Land workshop addresses the educational needs of women involved in all stages and aspects of Ohio agriculture – from non-operating landowners to producers and tenant farmers. Workshops focus on enhancing communication skills, delving into the specifics of Ohio land leasing laws, and the nuts and bolts of an effective lease agreement. Participants will also leave with a better understanding of management strategies to minimize their risk in leasing farmland in Ohio.

Through hands-on activities and demonstrations, Ladies on the Land workshops aim to increase confidence, improve communication skills, and provide helpful resources for all women involved in agriculture. Specific workshop topics cover:

  • Assessing the risk-reward continuum for tenants and landowners
  • Farmland leasing best practices
  • Enhancing communication skills
  • Developing equitable rental rates
  • Answers to questions and concerns

Ladies on the Land workshops will take place from January through March 2022 in various locations throughout Ohio, including January 26 in Medina County, February 15 in Ross County, February 24 in Morrow County, and March 3 in Putnam County.

There is a $25 registration fee that includes snacks, a boxed lunch, and all materials. Registration begins at 8:30 am. The program begins at 9:00 am and concludes at 3:30 pm. To reserve your seat for any of the Ladies on the Land workshops, please call 419-523-6294 or register at http://go.osu.edu/ladiesontheland.  Registration fees may be paid via credit/debit card or check.

Factors Behind Production Gains in Brazil

by: Guil Signorini, Department of Horticulture and Crop Science | The Ohio State University

Last month this column featured an article about souring fertilizer and chemical costs faced by Brazilian farmers as the 2020/2021 season unfolds. The latest developments show that the Southern farmers have not changed planting and growing plans due to these challenges. On the contrary, projections from CONAB (Federal Agency of Agricultural Supply) indicate that grain growers intensified production. Soybean production is expected to reach 4.9 billion bushels, a 7% increase over the last season, and the highest production mark ever registered. Projections for the corn crop are just as significant. Estimations indicate that the country will produce 4.6 billion bushels, a vital recovery from last season’s drop in production due to drought.

Nevertheless, what catches our curiosity is how Brazilian farmers have managed to improve production projections considering the pandemic and the severe pressure from high ag input costs. What can we learn from our fellow farmers? What marketing factors are favoring production expansion?

One important factor is the likely price stability for both commodities until May 2022, when most growers should be close to the season wrap-up. Ipea (Institute for Applied Economic Research) reported in December that international prices are expected to remain stable or experience marginal increments. Future prices from CME Chicago corroborate with Ipea. Soybean contracts for May 2022 were settled at $12.73 per bushel, and corn contracts were traded at $5.86 per bushel on December 6, slightly higher than current prices in Chicago.

Two other factors deserve attention: the adoption of sustainable agricultural practices and the use of innovative financial tools to fund the production. On the agricultural practices front, no-tillage, use of beneficial rhizobacteria, and crop-livestock-forest integration systems are examples of practices listed in a recent report from MAPA (Brazil’s Ministry of Agriculture) to explain the findings reported in the USDA International Agricultural Productivity document. In the latter document, USDA estimates a Total Factor Productivity (TFP) index. The TFP index reflects the overall rate of technical and efficiency change in production over time. Computations return positive estimates for the index when total agricultural output grows faster than the sum of inputs utilized. Brazil’s index figures above the world’s average with a 1.7% annual growth rate in the last years of analysis (2015-2019). The world’s average is 1.2%, and the U.S. index holds a yearly growth rate of 0.04%. Brazil has been in many ways a reference in sustainability practices applied to corn and soybean crops. As a result, farmers experience yield gains, reduce reliance on conventional inputs or practices, and help sustain a healthy growth rate of national production.

The third overall factor sustaining production growth in Brazil is the development of innovative financial instruments to borrow operating capital. These instruments were devised out of farmers’ necessity instead of preference. The operating costs of a representative corn and soybean farm in Brazil are considerably higher than those of a Midwest farm. Our estimations suggest that one acre of soybeans grown in Brazil requires five times the operating costs that an average Midwest farm requires. Similarly, the operations of one acre of corn in Brazil cost twice as much as the operations of one acre of corn in a typical Ohio farm. Because the cost of establishing a soybean or corn crop is budget constraining for most growers in Brazil, several financial instruments were devised and continue to evolve to ease the constraint. Eventual challenges associated with spikes in ag-input prices can be managed using the available financial tools. (As long as grain prices at harvest lead to a positive bottom-line result).

We want to call attention to two private financing instruments commonly used in Brazil: the CPR (Rural Product Exchange Title) and the CRA (Certificate of agribusiness receivables). Together these instruments raised $5.1 billion in 2019. Farmers may also access working capital at reduced interest rates through season plans (Plano Safra, in Portuguese) put together by the federal government every season. In 2019 the government made approximately $43 billion available to farmers in need of capital to cover establishment costs, including seed, fertilizer, and chemicals.

A quick discussion about the two private funding instruments is in order. The CPR refers to an agreement between a farmer and a financial institution. The agreement is frequently signed a couple of months before planting, and the expected crop is used as the guarantee. Farmers may choose to use the crop to liquidate the title at the end of the season. The CRA is a type of income security issued by a non-financial institution, often a multinational ag-input firm or a commodity trader. The security is then transacted with a financial institution that agrees on anticipating capital to the firm or trader. In possession of working capital, the ag-input firm or trader signs agreements with growers in exchange for the money.

This latter instrument has gained popularity in Brazil for two key reasons. First, farmers show preferences for borrowing capital from trading partners instead of banks. Second, ag-input firms and traders are in a position that allows scale gains before approaching a financial institution for the working capital. In that sense, they tend to obtain the capital at reduced interest rates, which are passed to growers with little to no additional charges. Ag input firms and traders are primarily interested in selling inputs or originating grain rather than profit via financial transactions.

The point to be made is that Brazilian grain growers count on two resilience factors. The first derives from technical decisions at the farm field. Sustainable practices have paid off as they tend to reduce reliance on conventional ag inputs, favor nutrient cycling, and enhance tolerance to abiotic stresses such as droughts. The second factor refers to financial tools available to help farmers cope with expensive operating costs. From the farm financial management perspective, eventual price increases in fertilizers and chemicals can be managed with appropriate financial instruments, especially when the commodities show signs of stable prices at harvest. Other than that, Brazilian farmers must work their fields and hope for the projections to hold and for abiotic stresses to be easy on the crops. The bottom line shall be safe then.

 

(This article was previously published in the Ohio’s Country Journal on December 13, 2021).

 

Driving forces and challenges as the growing season takes off in the Southern Hemisphere

by: Guil Signorini, Department of Horticulture and Crop Science | The Ohio State University

It is that time of the year again when our fellow farmers from Brazil dedicate time and energy to plant their crops. And as they do, challenges and opportunities in their operations signal factors and trends that may drive our decisions next Spring when the weather permits us to plant our crops again.

Brazilian farmers are fast-paced sowing soybeans due to favorable weather and soil conditions. On Nov. 1, IMEA (Mato Grosso Ag Economics Institute) informed that 83% of the soybean crop has been sowed in the state. The state of Mato Grosso alone grows more soybeans than Ohio, Michigan, Indiana, and Illinois combined. It also grows approximately 60% of the corn area in these four Midwestern states. Although other states of Brazil lag behind in sowing, research agencies estimate that 55% of the total soybean area has been sowed in the country, the highest mark in the last 5 years. Sowing of the first corn crop, considering that tropical conditions allow double cropping, also progresses fast. Analysts estimate that 65% of the first corn crop is on the ground and ready to grow.

At this point in sowing, one can assume that soybean and corn farmers in Brazil have had access to ag inputs such as seed, fertilizer, plant protection products, and beneficial micro-organisms. (It is difficult to believe that the sowing pace would be that fast otherwise). Leading production and agribusiness management agencies in Brazil recognize that, at this point, most operational costs have been realized by farmers, allowing the agencies to release the first projections of sales, costs, and net value.

A recent study prepared by CEPEA/ESALQ (Center for Advanced Studies on Applied Economics of the “Luiz de Queiroz” College — the most prestigious school of agronomy and related disciplines in the country) shows that the 2021/2022 season is not free of challenges for Brazilian farmers. In that report, CEPEA researchers indicate that grain crop growers’ expenditures with fertilizer are up 50.1% approximately across key production regions against last year. In certain regions, growers face prices for N-P-K fertilizers 59% more expensive this season when compared to the 2020/2021 season.

Researchers attribute the steep price increase to international factors that may affect the next season in the U.S. as well. The price for urea in Ukraine and China ports is the highest since July 2012. Prices are 75.5% and 67.2% more expensive in the respective ports. The increase is primarily associated with China’s government intervention in fertilizer companies to favor its domestic supply over exports. The second reason for the steep increase in urea prices relates to sharp increases in natural gas prices, a key input to produce the ag fertilizer.

The CEPEA report proceeds and suggests that monoammonium phosphate (MAP) prices are up 96.3% in Morocco and 94.6% in Russia, the highest increase since 2008. Similar underlying reasons for the spike in urea prices apply here. The prices of two key inputs to manufacturing phosphate fertilizers — sulfur and ammonia — soar due to refinery curtailments associated with the COVID-19 pandemic.

Prices for muriate of potash (MOP) are 9.1% higher in the Vancouver port when compared to last November according to a World Bank report. Analysts consider that high demand for potash fertilizer, pushed primarily by high commodity prices, combined with the broadly spoken sea transportation crisis are the reasons for the moderate price increases of MOP.

Concerning news comes from chemical prices also. A recent study from CNA (National Confederation of Agriculture and Livestock), a farmers-centered research and policy agency, indicates that prices for key chemical products are two times more expensive this season when compared to 2020/2021 season prices. That is the case for glyphosate that soars to a 128% price increase in important production regions. In addition, CNA is currently working on a strategic coalition plan to minimize the probability of chemical shortages this season and in the future.

We conducted an in-depth analysis to understand the origin of such price increases and we found two major reasons. The first relates to a recent merger that took place in China in April 2021. The Chinese government approved the merger of Sinochem and ChemChina to create an international chemicals giant responsible for $152 billion in annual sales. Since April this year, the merged company has struggled to equalize two very different business models under a single umbrella. Manufacturing plants were shut down, operations were adapted, and assets reallocated to maximize economies of scale. However, Chinese analysts evaluate that the reorganization plan is a complex one and it may take 4 to 5 years until the new company starts to enjoy scale gains. In other words, the fusion has triggered a large intra-company reorganization project and disrupted established partnerships. The collateral effect in prices of chemicals and industrial inputs was unavoidable and it may last several years.

The second reason affecting international prices of chemicals refers to regulatory and institutional changes occurring in China. The country is the most import supplier of raw material for the manufacture of ag chemicals. The Chinese government has signalized interest in tightening its national policies to reduce air pollution and save energy. Analysts believe that new or updated environmental programs that were introduced in 2008 will include periodic inspections of chemical manufacturing facilities, which may affect production, distort supply, and affect prices. Considering the impact that these two reasons have on the international supply of chemicals and their prices, distorted trade flows and high sea freight costs resulting from the COVID-19 pandemic are less of a concern.

The take-home message for Midwestern growers is the following. Brazilian grain crop growers are facing increased prices of fertilizers and chemicals. The underlying reasons for high prices are mostly rooted overseas and likely to last a couple of months or years. We consider that fertilizer prices may return to stable levels as soon as regular operations in mining, refinery, energy, and transportation sectors resume around the globe in the post-pandemic era. High prices of chemicals seem to be rooted in reasons other than the COVID-19 pandemic. Post-pandemic operations may pull back chemical prices, but there are deeper roots in factors difficult to assess. American growers should watch the next wave of developments and consider feasible tactics to reduce eventual impacts on availability and prices for ag inputs. Anticipating demand and connecting with reliable trading partners ahead of time is a recommended tactic to better plan for the season in times of uncertainty.

 

(This article was previously published in the Ohio Country Journal on November 15, 2021).

 

FARM OFFICE LIVE FALL and WINTER EDITION!

by: Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker, Julie Strawser – Ohio State University Extension

“Farm Office Live” returns virtually this fall and winter as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues from faculty and educators with the College of Food, Agriculture and Environmental Sciences at The Ohio State University.

Each Farm Office Live will include presentations on select ag law and farm management topics from our experts. Participants will have an opportunity to ask questions and interact with presenters via webinar features. Viewers can attend “Farm Office Live” online each month on Wednesday evening or Friday morning, or can catch a recording of each program. The full slate of offerings for this fall and winter:

November 17th 7:00 – 8:30pm

November 19th 10am – 11:30am

December 15th 7:00 – 8:30pm

December 17th 10:00 – 11:30am

January 19th 7:00 – 8:30 pm

January 21st 10:00 – 11:30 am

February 16th 7:00 – 8:30 pm

February 18th 10:00 – 11:30 am

March 16th 7:00 – 8:30 pm

March 18th 10:00 – 11:30 am

April 20th 7:00 – 8:30 pm

Topics to be addressed over the next few months include:

Legal trends for 2021

Legislative updates

Tax Issues That May Impact Farm Businesses

Crop Input Costs and Profit Margins

Cropland Values and Cash Rents

Interest Rates

Farm business management and analysis updates

Farm succession & estate planning updates

Who’s on the Farm Office Team?  Our team features OSU experts ready to help you manage your farm office:

Peggy Kirk Hall — agricultural law

Dianne Shoemaker — farm business analysis and dairy production

David Marrison — farm management

Barry Ward — agricultural economics and tax

Julie Strawser – marketing, webinar management and support, administrative support

Register at:  https://go.osu.edu/farmofficelive

We look forward to you joining us this fall and winter!

Upcoming Farm Profitability Series Announcement

by: Chris Bruynis, OSU Extension Educator

It does not take long to figure out that planting 2022’s crop is going to be significantly more expensive that this past year. Between supply disruption, industry labor issues, and a host of other issues, inputs for the next crop are going to cost more. So this means farmers will need to make the best decision possible to protect profitability in 2022. You are invited to join a free virtual webinar series looking at critical decisions concerning where to invest technology dollars, fertility management, and best management practices for crops. Join us to learn from top industry, private sector, and university experts on issues important to farm profitability in 2022 and beyond.

Each webinar will open at 11:30 AM for participants to log in and check audio settings. The program will start at 11:45 AM and last until 1:00 PM. The agenda for the series is as follows:

January 5:           Farming Technology: Where to Make the Next Investment

– John Fulton, OSU, Professor and Extension Specialist

January 19:        Should Fertilizer Applications be Reduced?

– Steve Culman, OSU, Associate Professor, State Specialist Soil Fertility

February 2:        ARC/PLC and Crop Insurance: Decision for 2022

– Chris Bruynis, OSU Associate Professor & Extension Educator

February 16:      Good Crop Production Practices: Research Findings

– Laura Lindsey, OSU, Associate Professor, Soybean Specialist

– Osler Ortez, OSU, Assistant Professor, Corn Specialist

March 2:             The Rational and Economics of Irrigation in Ohio

– Aaron Wilson, OSU Atmospheric Scientist

– Mark Ackerman, President, George F Ackerman Co.

March 16:           Grain Marketing Outlook: Show me the Money

– Matt Roberts, Founder of The Kernmantle Group

Feel free to join one, or six of these session by registering at https://go.osu.edu/2020farmprofit to get your name included. Additional Zoom invitations will be sent prior to each meeting to remind participants. Please RSVP by the end of December 2021. Question may be directed to bruynis.1@osu.edu or by calling OSU Extension Ross County at 740-702-3200.

 

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

by: Barry Ward. Leader Production Business Management- The Ohio State University College of Food, Agricultural, and Environmental Sciences, Ohio State University Extension

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.

 

 

 

 

 

Western Ohio Cropland Values and Cash Rents 2020-21

by: Barry Ward, Leader, Production Business Management, Director, OSU Income Tax Schools, OSU Extension, Agriculture & Natural Resources

 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.

The Western 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.

The study results are based on 94 surveys. Respondents were asked to group their estimates based on three land quality classes: average, top, and poor. 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.

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 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 the OSU Extension Farm Office website at:

https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents