Farmland Value and Cash Rental Rates in Western Ohio: 2015-2016 Report

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The results of the 2016 Western Ohio Cropland Values and Cash Rents study, conducted from February to April, have been released. The survey, which gathered insights from professionals knowledgeable about Ohio's cropland values and rental rates, provides valuable insights into the current state of Ohio's agricultural landscape.

The study summarises the average estimated land value per acre, corn and soybean yields, and cash rents by geographical area and land class for the 2015 survey. The results are presented for western, northwest, and southwest Ohio, with regional summaries for each area.

In southwestern Ohio, the yield for poor performing cropland equals 141.4 bushels of corn per acre. The average value of poor cropland in this region was $6,476 per acre in 2015, and it is expected to decrease to $6,078 per acre in 2016, a decrease of 6.1 percent. Poor cropland rented for an average of $138 per acre in 2015 and is expected to average $128 per acre in 2016, a decrease of 7.4 percent.

In northwest Ohio, poor cropland averaged 130.0 bushels of corn per acre and 38.0 bushels of soybeans per acre in 2015. The average value of poor cropland in this region was $5,298 per acre in 2015, and it is expected to decrease to $4,709 per acre in 2016, a decrease of 11.1 percent.

Cash rents in western Ohio are projected to average $78 per acre in 2016, while the average value of pasture land is expected to average $4,237 per acre. Cash rents in western Ohio are expected to decline from 5.6 percent to 7.6 percent in 2016, depending on the region and land class.

The study also highlights factors affecting cash rental rates, including supply and demand of cropland for rent, expected return from producing crops on a farm parcel, and the variability of that return. Secondary factors include buildings and grain storage availability, location of the farm (including road access), USDA Farm Program measurables, services provided by the operator, conditions of the lease, payment dates, reputation of the landowner/operator, special contracts, and more.

The range in the survey represents two-thirds of the responses, providing reliable data. For example, the range for cropland values and cash rents in southwest Ohio is shown in Table 3, while the range for cropland values and cash rents in northwest Ohio is shown in Table 2.

The survey also asked respondents to give their best estimates for long-term land value and cash rent change. The average estimate of cropland value change in the next five years for western Ohio is a decrease of 8.46 percent (for the entire five-year period). The average estimate of cash rent change in the next five years is a decrease of 8.05 percent. These estimates are summarised in Tables 1 through 3.

Survey respondents were also asked to estimate interest rates for 2016 for two borrowing terms: 20 year fixed-rate mortgage and operating loan. The average estimate of 20 year fixed-rate mortgage borrowing is 4.94 percent for 2016. The average estimate of operating loan interest rates is 4.39 percent for 2016.

Factors affecting Ohio cropland values and cash rents include land productivity, potential crop return, field size and shape, drainage, population density, ease of access, market access, local market prices, potential for wildlife damage, field perimeter characteristics, and competition for rented cropland in a region.

Table 5 summarises the average estimated Ohio cash rent per acre, per bushel corn and soybean yields, by geographical area and land class for the 2016 survey. The study concludes that Ohio cropland values and cash rental rates are projected to decrease in 2016.