Western Ohio Cropland Values and Cash Rents 2011-12

AEDE-15-12
Agriculture and Natural Resources
Date: 
08/29/2012
Barry Ward (ward.8@osu.edu), Leader Production Business Management, Ohio State University Extension, Department of Agricultural, Environmental, and Development Economics (AEDE)

Ohio cropland varies significantly in its production capabilities, and cropland values and cash rents vary widely throughout the state. Generally speaking, western Ohio cropland values and cash rents differ substantially from eastern Ohio cropland values and cash rents. This is due to a number of factors including land productivity, potential crop return, the variability of those crop returns, field size, field shape, drainage, population, ease of access, market access, local market price, potential for wildlife damage, and competition for rented cropland in a region. This fact sheet is a summary of data collected for western Ohio cropland values and cash rents only.

Ohio cropland values and cash rental rates are projected to increase in 2012. According to Ohio State University Extension's Western Ohio Cropland Values and Cash Rents Survey, bare cropland values are expected to increase from 7.3% to 9.1% in 2012 depending on the region and land class.

The Western Ohio Cropland Values and Cash Rents study was conducted, surveying professionals who are knowledgeable about cropland markets in their respective region or county. Surveyed groups include farm managers, rural appraisers, agricultural lenders, OSU Extension educators, farmers, landowners, and Farm Service Agency personnel.

Seventy-seven surveys were completed, analyzed, and summarized. Respondents were asked to give responses based on three classes of land in their area: "top" land, "average" land, and "poor" land. They were asked to estimate five-year corn and soybean yields for each land class based on typical farming practices. Survey respondents were asked to estimate current bare cropland values and cash rents negotiated in the current or recent year for each land class. Survey results are summarized below for all of western Ohio, and regional summaries (subsets of western Ohio) are presented for northwest Ohio and southwest Ohio.

Tables show the Average (mean) of each measure, Standard Deviation of the data for that measure (measure of variability), and Range (average minus and plus one standard deviation). These latter two numbers reported indicate a range within which about two-thirds of the responses in the data for that measure will fall.

Western Ohio Results

Figure 1. Western Ohio

Survey results from western Ohio are summarized in Table 1. See Figure 1 for counties included in this survey.

Top Cropland

Survey results indicate that "top" performing cropland in western Ohio averages 193.8 bushels of corn per acre. Results also show that average value of "top" cropland in 2011 was $6,732 per acre. According to this survey, "top" cropland in western Ohio is expected to be valued at $7,293 in 2012. This is a projected increase of 8.3%.

"Top" cropland in western Ohio rented for an average of $229 per acre in 2011 according to survey results. "Top" cropland is expected to rent for $250 in 2012. This equates to a cash rent of $1.29 per bushel of corn produced. Rents in the "top" cropland category are expected to equal 3.4% of land value in 2012.

Average Cropland

Survey results for "average" producing cropland show an average yield to be 160.5 bushels of corn per acre. Results show that the value of "average" cropland in western Ohio was $5,504 per acre in 2011. According to survey data, this "average" producing cropland is expected to be valued at $5,916 per acre in 2012. This is a projected increase of 7.5%.

"Average" cropland rented for an average of $179 per acre in 2011 according to survey results. "Average" cropland is expected to rent for $194 per acre in 2012. This equates to a cash rent of $1.21 per bushel of corn produced. Rents in the "average" cropland category are expected to equal 3.3% of land value in 2012.

Poor Cropland

The survey summary shows the average yield for "poor" performing cropland equals 130.7 bushels of corn per acre. Results also show that the average value of "poor" cropland was $4,439 per acre in 2011. According to survey data, this "poor" producing cropland is expected to be valued at $4,805 in 2012. This is an increase of 8.2%.

"Poor" cropland rented for an average of $140 per acre in 2011 according to survey results. Cash rent for "poor" cropland is expected to average $150 per acre in 2012. This equates to a cash rent of $1.15 per bushel of corn produced in 2012. Rents in the "poor" cropland category are expected to equal 3.1% of land value in 2012.

Table 1. Ohio Cropland Values and Cash Rents
Western Ohio Results
  Avg Std Deviation Range*
Top Avg Corn Yield (Bushel/Acre) 193.8 17.5 211.4 176.3
Avg Soybean Yield (Bushel/Acre) 59.7 5.7 65.4 54.0
Market Value per Acre 2011 $6,732 $1,385 $8,116 $5,347
2012 $7,293 $1,443 $8,736 $5,850
Rent per Acre 2011 $229 $38 $268 $191
2012 $250 $42 $292 $208
Average Avg Corn Yield (Bushel/Acre) 160.5 14.4 174.9 146.1
Avg Soybean Yield (Bushel/Acre) 48.9 4.6 53.5 44.3
Market Value per Acre 2011 $5,504 $1,103 $6,607 $4,401
2012 $5,916 $1,084 $7,000 $4,832
Rent per Acre 2011 $179 $39 $219 $140
2012 $194 $36 $230 $158
Poor Avg Corn Yield (Bushel/Acre) 130.7 16.4 147.0 114.3
Avg Soybean Yield (Bushel/Acre) 39.5 6.2 45.7 33.2
Market Value per Acre 2011 $4,439 $1,085 $5,524 $3,354
2012 $4,805 $1,102 $5,907 $3,703
Rent per Acre 2011 $140 $33 $173 $107
2012 $150 $30 $180 $120
5-Year Projected Percent Change in Cash Rent 6.90% 12.61% 19.51% -5.72%
5-Year Projected Percent Change in Cropland Value 7.21% 11.20% 18.40% -3.99%
Projected 2012 Mortgage Interest Rate (20-Year Fixed) 5.33% 0.70% 6.04% 4.63%
Projected 2012 Operating Loan Rate 4.66% 1.06% 5.72% 3.60%
Projected 2012 Pasture Cash Rent (Improved, Non-Rotation) $56 $33 $89 $23
Projected 2012 Pasture Land Value (Improved, Non-Rotation) $3,183 $995 $4,178 $2,189
*Range is one standard deviation above and below the average (mean). Approximately two-thirds of the responses fall within this range

Northwest Ohio Results

Figure 2. Northwest Ohio

Survey results from northwest Ohio are summarized in Table 2.

Top Cropland

Survey results indicate that "top" performing cropland in northwest Ohio averages 186.7 bushels of corn per acre or 59.9 bushels of soybeans per acre. Results also show that the average value of "top" cropland was $6,314 per acre in 2011. According to this survey, "top" producing cropland in northwest Ohio is expected to be valued at $6,886 in 2012. This is a projected increase of 9.1%.

"Top" cropland in northwest Ohio rented for an average of $208 per acre in 2011 and is expected to rent for $232 in 2012 according to survey results, which equals $1.24 per bushel of corn produced. Rents in the "top" cropland category are expected to equal 3.4% of land value.

Average Cropland

Yields for "average" producing cropland average 156.0 bushels of corn per acre or 48.8 bushels of soybeans per acre. Results show that the value of "average" cropland in northwest Ohio was $5,303 per acre in 2011. According to survey data, this "average" producing cropland is expected to be valued at $5,688 per acre in 2012. This is a projected increase of 7.3%.

"Average" cropland rented for an average of $162 per acre in 2011 according to survey results and is expected to rent for $180 in 2012 which equals $1.15 per bushel of corn produced. Rents in the "average" cropland category are expected to equal 3.2% of land value in 2012.

Poor Cropland

The survey summary shows the average yield for "poor" performing cropland in northwestern Ohio equals 127.2 bushels of corn per acre or 39.5 bushels of soybeans per acre. Results also show that the average value of "poor" cropland was $4,315 per acre in 2011 and is expected to average $4,654 per acre in 2012. This is a projected increase of 7.9%.

"Poor" cropland rented for an average of $122 per acre in 2011 and is expected to average $131 per acre in 2012 according to survey results which equals $1.03 per bushel of corn produced. Rents in the "poor" cropland category are expected to equal 2.8% of land value in 2012.

The northwest region for the purposes of this survey includes Williams, Fulton, Lucas, Ottawa, Defiance, Henry, Wood, Sandusky, Paulding, Putnam, Hancock, Seneca, Van Wert, Allen, Hardin, Wyandot, Crawford, Marion, and Morrow counties. See Figure 2.

Table 2. Ohio Cropland Values and Cash Rents
Northwest Ohio Results
  Avg Std Deviation Range*
Top Avg Corn Yield (Bushel/Acre) 186.7 17.5 204.2 169.2
Avg Soybean Yield (Bushel/Acre) 59.9 5.4 65.3 54.5
Market Value per Acre 2011 $6,314 $1,184 $7,498 $5,130
2012 $6,886 $1,187 $8,074 $5,699
Rent per Acre 2011 $208 $36 $244 $172
2012 $232 $43 $276 $189
Average Avg Corn Yield (Bushel/Acre) 156.0 13.7 169.8 142.3
Avg Soybean Yield (Bushel/Acre) 48.8 4.5 53.3 44.2
Market Value per Acre 2011 $5,303 $966 $6,268 $4,337
2012 $5,688 $942 $6,629 $4,746
Rent per Acre 2011 $162 $29 $191 $132
2012 $180 $31 $211 $149
Poor Avg Corn Yield (Bushel/Acre) 127.2 18.1 145.3 109.1
Avg Soybean Yield (Bushel/Acre) 39.5 5.9 45.4 33.6
Market Value per Acre 2011 $4,315 $1,004 $5,319 $3,311
2012 $4,654 $883 $5,537 $3,770
Rent per Acre 2011 $122 $20 $142 $101
2012 $131 $19 $150 $112
5-Year Projected Percent Change in Cash Rent 5.40% 13.44% 18.84% -8.04%
5-Year Projected Percent Change in Cropland Value 8.25% 12.90% 21.15% -4.65%
Projected 2012 Mortgage Interest Rate (20-Year Fixed) 5.43% 0.71% 6.14% 4.72%
Projected 2012 Operating Loan Rate 4.26% 0.41% 4.67% 3.84%
Projected 2012 Pasture Cash Rent (Improved, Non-Rotation) $68 $36 $103 $32
Projected 2012 Pasture Land Value (Improved, Non-Rotation) $2,758 $892 $3,650 $1,866
*Range is one standard deviation above and below the average (mean). Approximately two-thirds of the responses fall within this range

Southwest Ohio Results

Figure 3. Southwest Ohio

Survey results from southwest Ohio are summarized in Table 3.

Top Cropland

Survey results indicate that "top" performing cropland in southwest Ohio averages 198.1 bushels of corn per acre or 59.6 bushels of soybeans per acre. Results also show that average value of "top" cropland was $7,030 per acre in 2011. According to this survey, "top" producing cropland in southwest Ohio is expected to be valued at $7,584 per acre in 2012. This is a projected increase of 7.96%.

"Top" cropland in southwest Ohio rented for an average of $245 per acre in 2011 and is expected to rent for $263 per acre in 2012 according to survey results which equals $1.33 per bushel of corn produced. Rents in the "top" cropland category are expected to equal 3.5% of land value in 2012.

Average Cropland

Yields for "average" cropland equal 163.5 bushels of corn per acre. Results show that the value of "average" cropland in southwest Ohio was $5,660 per acre in 2011. According to survey data, this "average" producing cropland is expected to be valued at $6,092 per acre in 2012. This is a projected increase of 7.6%.

"Average" cropland rented for an average of $194 per acre in 2011 and is expected to rent for $205 per acre in 2012 according to survey results which equals $1.25 per bushel of corn produced. Rents in the "average" cropland category are expected to equal 3.4% of land value in 2012.

Poor Cropland

The survey summary shows the average yield for "poor" cropland in southwestern Ohio equals 133.0 bushels of corn per acre. Results also show that the average value of "poor" cropland was $4,538 per acre in 2011. According to survey data, this "poor" producing cropland is expected to be valued at $4,926 per acre in 2012. This is an increase of 8.6%.

"Poor" cropland rented for an average of $155 per acre in 2011 and is expected to average $165 per acre in 2012 according to survey results which equals $1.24 per bushel of corn produced. Rents in the "poor" cropland category are expected to equal 3.3% of land value in 2012.

The southwest region for the purposes of this survey includes Mercer, Auglaize, Shelby, Logan, Union, Delaware, Darke, Miami, Champaign, Clark, Madison, Franklin, Preble, Montgomery, Greene, Butler, Warren, Hamilton, Clermont, Clinton, Fayette, and Pickaway counties. See Figure 3.

Table 3. Ohio Cropland Values and Cash Rents
Southwest Ohio Results
  Avg Std Deviation Range*
Top Avg Corn Yield (Bushel/Acre) 198.1 16.4 214.5 181.6
Avg Soybean Yield (Bushel/Acre) 59.6 6.0 65.6 53.6
Market Value per Acre 2011 $7,030 $1,459 $8,490 $5,571
2012 $7,584 $1,556 $9,140 $6,028
Rent per Acre 2011 $245 $33 $277 $212
2012 $263 $37 $300 $226
Average Avg Corn Yield (Bushel/Acre) 163.5 14.3 177.9 149.2
Avg Soybean Yield (Bushel/Acre) 49.0 4.8 53.8 44.2
Market Value per Acre 2011 $5,660 $1,193 $6,852 $4,467
2012 $6,092 $1,169 $7,261 $4,923
Rent per Acre 2011 $194 $41 $235 $152
2012 $205 $36 $241 $169
Poor Avg Corn Yield (Bushel/Acre) 133.0 15.1 148.0 117.9
Avg Soybean Yield (Bushel/Acre) 39.5 6.6 46.1 32.8
Market Value per Acre 2011 $4,538 $1,156 $5,694 $3,382
2012 $4,926 $1,255 $6,181 $3,671
Rent per Acre 2011 $155 $34 $189 $121
2012 $165 $29 $194 $136
5-Year Projected Percent Change in Cash Rent 7.96% 12.13% 20.09% -4.16%
5-Year Projected Percent Change in Cropland Value 6.46% 9.98% 16.45% -3.52%
Projected 2012 Mortgage Interest Rate (20-Year Fixed) 5.23% 0.70% 5.94% 4.53%
Projected 2012 Operating Loan Rate 5.12% 1.36% 6.48% 3.76%
Projected 2012 Pasture Cash Rent (Improved, Non-Rotation) $49 $31 $80 $18
Projected 2012 Pasture Land Value (Improved, Non-Rotation) $3,353 $1,010 $4,364 $2,343
*Range is one standard deviation above and below the average (mean). Approximately two-thirds of the responses fall within this range

Additional Survey Results

Survey respondents were asked to give their best estimates for long-term land value and cash rent change as well as projections for mortgage and operating loan interest rates for 2012.

The average estimate of cropland value change in the next five years is an increase of 7.21% (for the entire five-year period). There was a large range in responses from survey participants for cropland value change in five years. Responses ranged from an increase of 40% to a decrease of 25%.

The average estimate of cash rent change in the next five years is an increase of 6.97%. There was a large range in responses from survey participants for cash rent change in five years. Responses ranged from an increase of 30% to a decrease of 38%.

The summary of these responses is presented in Tables 1 through 3 and includes Expected Percent Change in the Value of Cropland in the Next Five Years, Expected Percent Change in the Cash Rental Rates in the Next Five Years, Expected Average Interest Rate for Mortgage Loans for 2012, Expected Average Operating Loan Rate for 2012, Pasture Cash Rent per Acre, and the Value of Pasture Land. Tables 1 through 3 below show the results of the survey for these measures for western Ohio, northwest Ohio, and southwest Ohio.

Table 4. Average estimated Ohio land value per acre (tillable, bare land), per bushel corn and soybean yields, by geographical area and land class, Ohio Cropland Values and Cash Rents Survey 2011–12.
Area Land Class Corn
(Bu/A)
Soy
(Bu/A)
Land Value
2011 ($/A) 2012* ($/A) % Change (2011–2012)
Northwest Top 186.7 59.9 $6,341 $6,886 9.1%
Average 156.0 48.8 $5,303 $5,688 7.3%
Poor 127.2 39.5 $4,315 $4,654 7.9%
Southwest Top 198.1 59.6 $7,030 $7,584 7.9%
Average 163.5 49.0 $5,660 $6,092 7.6%
Poor 133.0 39.5 $4,538 $4,926 8.6%
Western Top 193.8 59.7 $6,732 $7,293 8.3%
Average 160.5 48.9 $5,504 $5,916 7.5%
Poor 130.7 39.5 $4,439 $4,805 8.2%
*Projected Land Value
Table 5. Average estimated Ohio cash rent per acre (tillable, bare land), per bushel corn and soybean yields, by geographical area and land class, Ohio Cropland Values and Cash Rents Survey 2011–12.
Area Land Class Corn (Bu/A) Soy (Bu/A) Rent per Acre Rent per Bushel Corn Rent as % of Land Value
2011 ($/A) 2012* ($/A) % Change (2011–2012) 2011 ($/Bu) 2012* ($/Bu) 2011 (%) 2012* (%)
Northwest Top 186.7 59.9 $208 $232 11.5% $1.11 $1.24 3.3% 3.4%
Average 156.0 48.8 $162 $180 11.1% $1.04 $1.15 3.1% 3.2%
Poor 127.2 39.5 $122 $131 7.4% $0.96 $1.03 2.8% 2.8%
Southwest Top 198.1 59.6 $245 $263 7.3% $1.24 $1.33 3.5% 3.5%
Average 163.5 49.0 $194 $205 5.7% $1.19 $1.25 3.4% 3.4%
Poor 133.0 39.5 $155 $165 6.5% $1.17 $1.24 3.4% 3.3%
Western Top 193.8 59.7 $229 $250 9.2% $1.18 $1.29 3.4% 3.4%
Average 160.5 48.9 $179 $194 8.4% $1.12 $1.21 3.3% 3.3%
Poor 130.7 39.5 $140 $150 7.1% $1.07 $1.15 3.2% 3.1%
*Projected Rental Rate

Summary

This study will add to existing research on Ohio farmland values and cash rents that can assist producers and landowners with purchase and rental decisions. Existing research includes the following:

Also, check with your local OSU Extension office for local land value/rental survey summaries. For additional information on farmland lease issues see the Department of Agricultural, Environmental, and Development Economics (AEDE) Farm Management webpage at: aede.osu.edu/research/osu-farm-management/publications.

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