Ohio farmers to see unprecedented increase in farmland values

Thursday, October 12, 2023

Farmers enrolled in Ohio's Current Agricultural Use Valuation (CAUV) program are facing an unprecedented increase in farmland values, which has the potential to impact their finances significantly.

CAUV Program: Ohio's Current Agricultural Use Valuation (CAUV) program is a tax formula that assesses farmland based on its agricultural use value, rather than its potential value for development. The formula considers factors such as soil type, yield output of crops like corn and soybeans, and assigns a value to the land.
Difference from Market Value: The CAUV value of farmland is not the same as its open market value. The open market value is determined by the negotiation between a willing buyer and seller and can vary widely. The CAUV value focuses on the land's production quality and value for agricultural use.
Significant Value Increase: Farmland values under the CAUV program have seen substantial increases, ranging from 78% to 100%. This increase is attributed to sustained high crop values over the past three years, but it's causing concerns among farmers, especially small farming businesses.
Impact on Small Farms: Rising operational costs, coupled with increased taxable values and higher tax bills, are creating financial challenges for small farming businesses. The tax burden is adding pressure to already thin profit margins.
Legislative Response: In response to these concerns, Ohio lawmakers are considering House Bill 187 (H.B. 187), which is aimed at providing relief to farmers and property owners. The bill proposes adjusting property values undergoing reappraisal by averaging a property's values over three years, rather than basing them solely on the current year's value.

The Ohio Farm Bureau has been working with the legislature to address these issues over the past several months. They are seeking solutions to help farmers cope with rising costs and the tax burden, especially as farm incomes are projected to decrease by around 20% by the end of the year. Farmers in Ohio are facing due to the substantial increase in CAUV values and the efforts being made to provide relief through legislative measures like H.B. 187.

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