Farmland values in western Ohio are expected to increase by 3.3 to 5.8 percent by 2024
Results from the Western Ohio Farmland Values and Cash Rents Survey show that cash rents are expected to increase between 3.2 and 3.8 percent in 2024, depending on region and land class. (OSU CFAES)
COLUMBUS, Ohio — The Western Ohio Cropland Values and Cash Rents study was conducted earlier this year from January through April. This opinion-based study surveyed professionals with knowledge of Ohio cropland values and rental rates. The professionals surveyed were appraisers, agricultural lenders, professional farm managers, agricultural economics professionals, OSU Extension educators, farmers, landowners and Farm Service Agency employees. The study results are based on 131 surveys.
Respondents were asked to group their estimates by three soil quality classes: average, top, and bottom. Within each soil quality class, respondents were asked to estimate average corn and soybean yields for a five-year period based on typical farming practices. Survey participants were also asked to estimate the current value of undeveloped cropland and cash rents negotiated in the current or last year for each soil quality class. Survey results are summarized below for Western Ohio, with regional summaries (subsets of Western Ohio) for Northwest Ohio and Southwest Ohio.
Results from the Western Ohio Farmland Values and Cash Rents Survey show that Western Ohio farmland values are expected to increase 3.3 to 5.8 percent in 2024, depending on region and land class. Cash rents are expected to increase 3.2 to 3.8 percent in 2024, depending on region and land class. Declining profit margins have so far competed with relatively strong farm ownership and rising property taxes on direct values and rents in 2024. Farmland values and cash rents are expected to increase, although increases are expected to be smaller than in the past two years.
Key Factors Affecting Farmland Value and Cash Rent in Ohio
The main factors affecting these values and rents are land productivity and potential crop yield, as well as the variability of those crop yields. Soils, fertility and drainage/irrigation opportunities are the main factors that most affect land productivity, crop yield, and the variability of those crop yields.
Other factors that affect land value and lease rates may include field size and shape, field accessibility, market access, local market prices, field edge characteristics and potential for deer damage, buildings and grain storage, previous tillage system and crops, tolerant/resistant weed populations, USDA program yields, population density, and competition for farmland in a region. Factors that specifically affect lease rates may include services provided by the operator, property taxes, and certain terms of the lease. This fact sheet summarizes survey data collected on farmland values and lease rates in western Ohio:
https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents
Estimated estimates of land values and cash rents
Survey participants were asked to provide their best estimates for long-term Change in land value and rent. The average estimate of farmland value change over the next five years for Western Ohio is an increase of 3.6 percent (for the entire five-year period). Responses for farmland value change over the next five years ranged from a 50 percent increase to a 50 percent decrease.
The average estimate for the change in cash rent over the next five years is an increase of 2.7 percent. There was also a wide range in the change in cash rent, with responses ranging from a 25 percent increase to a 50 percent decrease.
Interest rates
Survey respondents were also asked to estimate 2024 interest rates for two loan terms: 20-year fixed-rate mortgages and business loans. The average estimate of survey respondents for 20-year fixed-rate mortgages is 7.1 percent. According to the same respondents, the average estimate for business loan interest rates is 8.3 percent.
The full survey summary can be found on the Farm Office website: https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents
— Barry Ward, Head, Manufacturing Business Management
Ohio State University CFAES
