Crop Issues
By: Carl Zulauf, Professor Emeritus, Ohio State University; and Eric Richer, Associate Professor and Field Specialist , Ohio State University Extension, October 2025
Net return to storing Ohio corn and soybeans since 1973 is examined. Cash storage of Ohio corn and soybeans after June is generally not profitable as prices decline on average and in a majority of years. Net returns to cash and futures hedged storage ending no later than June do not differ statistically from zero, indicating returns just cover total storage cost. Nevertheless, this findings is consistent with building on-farm storage because on-farm storage offers other opportunities to improve farm profits. They include faster harvest, thus less harvest loss, and more flexible post-harvest marketing, such as location of cash sales. Although not statistically different, net returns have generally been higher for storing Ohio soybeans than corn. This is consistent with soybeans’ more rapid growth in consumption. Hedged storage has the advantage of lower net return risk, especially at longer storage periods.
Ohio Corn Price Seasonal
Although Ohio cash corn price has averaged nearly the same in October ($3.02) and November ($3.03) since 1973, October is used as the harvest low price month. The decision in part reflects that October is the harvest low for soybeans (see next section). Average Ohio cash corn price increased through June, peaking at 117% of its October price (see Figure 1). Price increased the most (4 percentage points) from November to December. It declined on average after June. Largest decline was from August to September. Ohio cash price was higher in roughly one-third of the years after June, specifically, 37%, 31%, and 30% of the years for July, August, and September, respectively. For a brief discussion of data sources and procedures, see Data Note 1.
Ohio Soybean Price Seasonal
The Ohio soybean and corn cash price seasonal are largely similar (see Figures 2 and 1). Average cash price is highest in June. Largest average decline is from August to September. Soybean cash price did increase more consistently from its October low, specifically one to two percentage points per month through May and had a lower and less definitive peak. Average soybean price for June and July all rounded to 113% of the October low. Corn’s peak was 117% in June. Ohio soybean’s August and September cash price both exceeded its July price in 22% of the years.
Net Return to Storing Ohio Corn and Soybeans
Net return to the two most common storage strategies, cash storage and storage hedged with futures, is examined for storage periods from October (lowest cash price) to June (highest cash price). Net cash storage return per bushel equals (a) Ohio cash price for the end-of-storage month (for example, December) minus (b) October Ohio cash price minus (c) interest opportunity cost of storing instead of selling at harvest minus (d) physical storage cost at commercial facilities to keep the crop in useable condition. Net futures hedged storage return per bushel equals (a) net return to cash storage plus (b) change in futures price over the storage period minus (c) cost of trading futures. Since price and storage cost have increased over time, net return is expressed as a percent of the October price. Data Note 2 further discusses the procedures and data sources.
Average net return to cash storage expressed relative to the October price does not differ statistically from $0 for both corn and soybeans for all 8 storage periods. Thus, from a statistical perspective, returns just cover total storage cost. However, average net return above total cash storage cost is close to or exceeds 3% of October price for Ohio corn stored to February and beyond and for Ohio soybeans stored to March and beyond (see Figure 3). Such returns are high enough to perhaps have economic meaning even if they lack statistical significance. Return to storage is nominally higher for soybeans than corn, with soybean’s advantage increasing for storage beyond March.
Net return to futures hedged storage generally averages close to $0, especially as the storage period lengthens. The advantage of hedged storage is that risk of net return variation is lower for it than cash storage. This advantage becomes notable for storage beyond January (see Figure 4). Combining Figures 4 and 3 suggest that the higher average net return for cash storage beyond January can be viewed as a compensation for the higher risk of cash storage beyond January.
Summary Discussion
Cash storage of Ohio corn and soybeans after June is generally not profitable as prices decline on average and in a majority of years.
Net return to cash and futures hedged storage Ohio corn and soybeans that ends no later than June does not differ statistically from zero. Stated alternatively, on average, returns to storage just cover the total cost of storage.
The preceding finding is however consistent with building on-farm storage since on-farm storage provides other opportunities to improve farm profitability. They include faster harvest due to longer harvest days plus less travel and wait time in getting a crop stored. Faster harvest can reduce harvest loss due to inclement weather. On-farm storage also gives more flexibility to post-harvest marketing, especially the location of cash sales.
Although not statistically significant, return to cash storage has been nominally higher for Ohio soybeans than corn. This finding should not be surprising as consumption has increased percentage wise much more for soybeans than corn. As price increases to stimulate future soybean production to satisfy growing demand, storage is more likely to be profitable.
A clear advantage of hedged storage is a lower risk of net return variation than cash storage, especially over longer storage periods. This finding was expected since it is well documented in the literature.
Data Notes:
- Cash price in this study is the average monthly price paid to Ohio farmers by first handlers as reported by USDA, NASS (US Department of Agriculture, National Agricultural Statistics Service). Starting the study with the 1974 marketing year postdates the early 1970s increase in price variability (Kenyon, Jones, and McGuirk). The last complete marketing year is 2024.
- Physical storage cost is from USDA, Commodity Credit Corporation through the 2005 marketing year. Thereafter, it is from an Ohio country elevator, cross checked with another Ohio first delivery point. Opportunity storage cost is measured using the October secondary market 6 month US Treasury bill rate, discount basis. Six months is the Treasury bill maturity closest to the 8 month October-June storage period examined in this study. Source is the Federal Reserve Bank of St. Louis. The Chicago July futures contract is used for the storage hedge. It is the first corn and soybean futures contract maturity after June. For each month, average July futures settlement price is calculated using prices from Barchart.com. Hedge storage cost is brokerage fee plus liquidity cost for the futures trade. Brokerage fee is assumed to be $50 for a round trip buy and sell of a futures contract based on inquiries of brokers. Liquidity cost arises since the price at which a futures trade is executed usually differs from the price when the trade is placed (i.e. execution is not instantaneous). Based on Brorsen and Thompson and Waller, liquidity cost is $25 per futures trade made before February 1 and $12.50 thereafter. Liquidity cost is less after February 1 since trading volume increases as contract maturity nears. For an in-depth discussion of storage and trading cost, see Zulauf and Kim (2020).
References and Data Sources
Barchart.com. 2025. Futures price data. https://www.barchart.com/
Brorsen, B. W. 1989. Liquidity Costs and Scalping Returns in the Corn Futures Market. Journal of Futures Markets 9(3): 225-236.
Federal Reserve Bank of St. Louis. September 2025. Federal Reserve Economic Data. https://fred.stlouisfed.org
Kenyon, D., E. Jones, and A. McGuirk. 1993. Forecasting Performance of Corn and Soybean Harvest Futures Contracts. American Journal of Agricultural Economics 75(May): 399-407.
Ohio Country Elevator. 2006-2025. Personal inquiry of annual corn and soybean storage rates.
Thompson, S. R. and M. L. Waller. 1987. The Execution Cost of Trading in Commodity Futures Markets. Food Research Institute Studies Vol. XX, No. 2: 141-163.
US Department of Agriculture, Commodity Credit Corporation. 1978-2007. Annual personal inquiry.
US Department of Agriculture, National Agricultural Statistics Service. September 2025. QuickStats. http://quickstats.nass.usda.gov/
By Clint Schroeder, Program Manager for Ohio Farm Business Analysis Program and Eric Richer, Field Specialist, Farm Management
With the projected price discovery period now closed for winter wheat Ohio farmers have until September 30, 2025, to select the crop insurance coverage that best suits their operation. However, the decision on policy type and coverage levels for 2026 crops could be impacted by the passage of the One Big Beautiful Bill Act (OBBBA). Signed into law on July 4, 2025, OBBBA offers higher area-based policy coverage levels, increases premium support, and expands support for beginning farmers and ranchers. This article will highlight these key changes so that producers can make more informed decisions for 2026 production on their farm.
Previously, producers that wanted to purchase Supplemental Coverage Option (SCO) as part of their policy were required to enroll those base acres in the Price Loss Coverage (PLC) program. The OBBBA has decoupled SCO from the traditional Farm Bill decision allowing farmers to enroll in either the Agriculture Risk Coverage (ARC) or PLC program. Additionally, premium support, the subsidy for SCO has increased from 65% to 80%. In 2027 SCO coverage will also increase to 90%, up from the current 86% revenue benchmark. This band of coverage is currently available in the form of the Enhanced Coverage Option (ECO). ECO is currently available at two coverage levels, 86% to 90% and 90% to 95%. The premium support for these policies also increased to 80%. It is important to note that SCO and ECO provide coverage above the individuals’ underlying Multi-Peril Crop Insurance (MPCI) policy but are based off of the county’s production for that year. That is to say, SCO and ECO do not provide additional protection at the unit level for each farm, field and crop.
Premium support across all Basic and Optional Units was also increased by 3 to 5 percentage points. While OBBBA did not specifically raise the premium support for Enterprise Units, the increased subsidy for Basic and Optional Units affects the calculation the Risk Management Agency (RMA) uses to set premium support levels for Enterprise Units. Table 1 outlines the premium support for each coverage level under prior legislation compared to current support under the OBBBA.
|
Table 1: Premium Subsidy Rates: Prior Legislation vs OBBBA |
||||
|
|
Prior Legislation |
OBBBA |
||
|
Coverage Level |
Basic and Optional Units |
Enterprise Units |
Basic and Optional Units |
Enterprise Units |
|
50% |
67% |
80% |
67% |
80% |
|
55% |
64% |
80% |
69% |
80% |
|
60% |
64% |
80% |
69% |
80% |
|
65% |
59% |
80% |
64% |
80% |
|
70% |
59% |
80% |
64% |
80% |
|
75% |
55% |
77% |
60% |
80% |
|
80% |
48% |
68% |
51% |
71% |
|
85% |
38% |
53% |
41% |
56% |
Beginning farmers will also receive an increased subsidy that is tiered based on their years of farming. A Beginning Farmer or Rancher (BFR) is now defined as an individual who has not actively operated and managed a farm or ranch in any state, with an insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 10 crop years. Under prior legislation BFRs received premium support of 10%. The OBBBA increases the subsidy amount to 15% for the first two years, 13% in year three, and 11% in year four. Years 5 through 10 will remain at the 10% additional premium support level.
Implications
The 2026 projected winter wheat price for Ohio is now set at $5.76 per bushel, down from $6.06 per bushel in 2025. The volatility factor for 2025 was .23 and decreased slightly to .20 in 2026. The 2026 MPCI wheat policies will use this price and volatility factor to determine producer premiums. SCO and/or ECO area-based policies can then be added as options, if desired. The corn and soybean projected prices will be determined from February 1-28, 2026 with an insurance signup deadline of March 15. Farmers should consult with their crop insurance agent to receive a quote tailored to their crop, county, unit structure, and approved yield. In some instances, reducing individual coverage and purchasing SCO or ECO may provide additional risk protection at a lower cost.
References
Ohio Crop Returns Outlook for 2025 - Final Crop Enterprise Budgets for 2025
Barry Ward, Leader, Production Business Management
Lower crop prices and a mix of higher and lower input costs have set the stage for another challenging profit outlook for Ohio commodity crops in 2025. Supply and demand fundamentals have both continued to negatively affect commodity crop prices. Some input costs are projected to be higher while some are expected to be steady to lower. The result of this set of economic fundamentals is an outlook for low to negative margins for the 2025 corn, soybean and wheat crops.
Production costs for Ohio field crops are forecast to be steady to slightly higher than last year with higher machinery and equipment costs leading the way. Lower crop protection chemical prices are offset by an expected increase in product need. Fuel and crop insurance costs are also projected to be slightly lower but land rents continue to increase on average.
Variable costs for corn in Ohio for 2025 are projected to range from $502 to $614 per acre depending on land productivity. The trend line corn yield (190.1 bpa) scenario included in the corn enterprise budget shows an increase in variable costs of 2.4% with an increase in fixed costs of 3.4% due to higher rents and machinery/equipment costs.
Variable costs for 2025 Ohio soybeans are projected to range from $264 to $298 per acre. Variable costs for trend-line soybeans (56.8 bpa) are expected to decrease 2% in 2025 compared to 2024 while fixed costs are expected to increase 2.9% in 2025.
Wheat variable expenses for 2025 are projected to range from $231 to $288 per acre. The trend line wheat yield (81.5 bpa) scenario included in the wheat enterprise budget shows a decrease in variable costs of 2.3% with an increase in fixed costs of 2.7%.
Returns will be mixed depending on crop price change throughout the rest of the year. Grain prices used as assumptions in the 2025 crop enterprise budgets are $4.20/bushel for corn, $10.20/bushel for soybeans and $6.00/bushel for wheat (wheat price set in October using the September ’25 Futures price at that time).
Projected returns above variable costs (contribution margin) range from $137 to $344 per acre for corn and $200 to $398 per acre for soybeans. Projected returns above variable costs for wheat range from $160 to $299 per acre although significant crop price decreases since last fall (when the price was set for this enterprise budget) will likely cause wheat to be less profitable than these return projections indicate.
Return to Land is a measure calculated to assist in land rental and purchase decision making. The measure is calculated by starting with total receipts or revenue from the crop and subtracting all expenses except the land expense. Returns to Land for Ohio corn (Total receipts minus total costs except land cost) are projected to range from -$73 to $118 per acre in 2025 depending on land production capabilities. Returns to land for Ohio soybeans are expected to range from $51 to $237 per acre depending on land production capabilities. Returns to land for wheat (not including straw or double-crop returns) are projected to range from $42 per acre to $171 per acre assuming a planting-time price of $6/bushel. If a current forward harvest price for wheat of $5.25/bushel is used, the Return to Land is in a lower range of -$5 to $101 per acre depending on land production capabilities.
Total costs projected for trend line corn production in Ohio are estimated to be $1021 per acre. This includes all variable costs as well as fixed costs (or overhead if you prefer) including machinery, labor, management and land costs. Fixed machinery costs of $109 per acre include depreciation, interest, insurance and housing. A land charge of $241 per acre is based on data from the Western Ohio Cropland Values and Cash Rents Survey Summary. Labor and management costs combined are calculated at $84 per acre. Details of budget assumptions and numbers can be found in footnotes included in each budget.
Total costs projected for trend line soybean production in Ohio are estimated to be $677 per acre. (Fixed machinery costs: $88 per acre, land charge: $241 per acre, labor and management costs combined: $50 per acre.)
Total costs projected for trend line wheat production in Ohio are estimated to be $620 per acre. (Fixed machinery costs: $58 per acre, land charge: $241 per acre, labor and management costs combined: $51 per acre.)
Data used to compile these enterprise budgets includes research, surveys, market data, economic modeling, calculations and experience of authors.
Current budget analyses indicates less favorable returns for all three primary commodity crops in Ohio for 2025 but crop price change and harvest yields may alter this outcome. These projections are based on OSU Extension Ohio Crop Enterprise Budgets. Newly updated Enterprise Budgets for 2025 have been completed and posted to the Farm Office website: https://farmoffice.osu.edu/farm-management/enterprise-budgets
By: David Marrison, OSU Extension Field Specialist, Farm Management
click here for PDF version of article
Drought conditions continued to degrade across Ohio. According to the U.S. Drought Monitor report on September 17, 59.56% of Ohio is experiencing severe or greater drought conditions with 9.5% classified as D4 or exceptional drought conditions (Figure 1). It is important to remember that D4 conditions only occur once every 50 to 100 years. Approximately 98% of the state is experiencing at least abnormally dry conditions. One silver lining is the current seven-day forecast shows the potential for rain in many areas of Ohio next week which should help slow the progress of drought should it occur.
The drought conditions have impacted both pastures and hayfields across Ohio. The Conservation Reserve Program (CRP) administered under the USDA Farm Service Agency permits emergency haying and grazing on certain CRP practices in a county designated as D2 or higher on the U.S. Drought Monitor, or in a county where there is at least a 40 percent loss in forage production.
Emergency use of CRP acres is available in eligible counties if the stand is in condition to support such activity and is subject to a modified conservation plan. Producers should contact their FSA office to determine if the county remains eligible and to obtain a modified conservation plan.
After a county is approved for emergency haying and grazing, conditions are reviewed monthly to determine whether continuing the emergency activities is warranted. To date, 70 counties (79.5%) in Ohio are eligible (as of 9/17/2024). These can be found in Table 1:
Table 1: Ohio Counties Eligible for Emergency CRP Grazing
|
County |
State Date |
|
County |
Start Date |
|
County |
Start Date |
|
Adams |
8/20/2024 |
|
Hamilton |
9/17/2024 |
|
Noble |
7/16/2024 |
|
Allen |
9/17/2024 |
|
Hancock |
9/17/2024 |
|
Ottawa |
9/10/2024 |
|
Ashland |
9/17/2024 |
|
Hardin |
9/10/2024 |
|
Paulding |
9/17/2024 |
|
Athens |
7/16/2024 |
|
Harrison |
7/30/2024 |
|
Perry |
7/23/2024 |
|
Auglaize |
9/10/2024 |
|
Henry |
9/10/2024 |
|
Pickaway |
7/16/2024 |
|
Belmont |
7/16/2024 |
|
Highland |
7/30/2024 |
|
Pike |
7/30/2024 |
|
Brown |
8/20/2024 |
|
Hocking |
7/23/2024 |
|
Preble |
9/17/2024 |
|
Butler |
9/10/2024 |
|
Holmes |
9/17/2024 |
|
Putnam |
9/17/2024 |
|
Carroll |
8/20/2024 |
|
Jackson |
7/30/2024 |
|
Richland |
9/17/2024 |
|
Champaign |
9/03/2024 |
|
Jefferson |
7/23/2024 |
|
Ross |
7/16/2024 |
|
Clark |
9/03/2024 |
|
Knox |
9/17/2024 |
|
Sandusky |
9/10/2024 |
|
Clermont |
9/10/2024 |
|
Lawrence |
12/19/2023 |
|
Scioto |
8/20/2024 |
|
Clinton |
8/20/2024 |
|
Licking |
8/27/2024 |
|
Shelby |
9/10/2024 |
|
Coshocton |
9/03/2024 |
|
Logan |
9/10/2024 |
|
Tuscarawas |
7/30/2024 |
|
Crawford |
9/17/2024 |
|
Lucas |
9/10/2024 |
|
Union |
9/03/2024 |
|
Defiance |
9/10/2024 |
|
Madison |
7/16/2024 |
|
Vinton |
7/23/2024 |
|
Delaware |
9/03/2024 |
|
Marion |
9/17/2024 |
|
Warren |
9/03/2024 |
|
Fairfield |
7/16/2024 |
|
Meigs |
7/16/2024 |
|
Washington |
7/16/2024 |
|
Fayette |
7/16/2024 |
|
Miami |
9/10/2024 |
|
Wayne |
9/17/2024 |
|
Franklin |
7/16/2024 |
|
Monroe |
7/16/2024 |
|
Williams |
9/10/2024 |
|
Fulton |
9/10/2024 |
|
Montgomery |
9/03/2024 |
|
Wood |
9/10/2024 |
|
Gallia |
7/30/2024 |
|
Morgan |
7/16/2024 |
|
Wyandot |
9/17/2024 |
|
Greene |
9/03/2024 |
|
Morrow |
9/17/2024 |
|
|
|
|
Guernsey |
7/16/2024 |
|
Muskingum |
7/16/2024 |
|
|
|
More information about the emergency grazing of CRP acreage can be found at: https://www.fsa.usda.gov/programs-and-services/conservation-programs/conservation-reserve-program/emergency-haying-and-grazing/index
Producers are encouraged visit their local Farm Service Agency office to report crop and livestock losses. By providing this data, producers can learn their eligibility for the FSA disaster programs. Producers can locate their local office at: www.fsa.usda.gov/oh FSA has also developed an on-line disaster assistance discover tool which allows producers to learn which of the many USDA assistance programs which might fit their operation due to this year’s drought. This easy-to-use tool can be accessed at: https://www.farmers.gov/protection-recovery/disaster-tool
References:
OSU Drought Response Page. Accessible at: https://kx.osu.edu/page/early-drought-response
US Drought Monitor. Accessible at: https://droughtmonitor.unl.edu/
Emergency Conservation Program. United States Department of Agriculture, Farm Service Agency. Source: https://www.fsa.usda.gov/programs-and-services/conservation-programs/conservation-reserve-program/emergency-haying-and-grazing/index
Barry Ward, Leader, Production Business Management
Writing this feels like déjà vu. It feels like we’ve lived through this before and for good reason. The article I wrote last year about significant increases in Current Ag Use Value of farmland can be repeated almost word for word.
Again, large increases in the Current Ag Use Value (CAUV) of farmland in 2024 will result in higher property taxes for farmland owners in 2025. Twenty-four of Ohio’s eighty-eight counties will see property tax increases in 2025 due to higher CAUV. Several factors have led to this increase in ag use valuation. The average current ag use value is expected to be $1,616 per acre across all soil types (proposed final value). This compares to a value of $759 per acre in 2021 which represents an increase of 113%.
The Current Agricultural Use Value (CAUV) Program is a differential real estate tax assessment program for owners of farmland. The program allows for the assessment value of farmland parcels to be taxed according to their use value in agriculture (or their value related to income from agriculture) rather than the market value (defined as the value if the land were sold by a willing seller to a non-related willing buyer). To arrive at this “use value”, a formula is used that includes several variables to capitalize the net income from agricultural products.
Landowners with farmland and woodlands in Ohio are eligible to sign-up for the CAUV program through their county auditor’s office if they meet the requirements.
There are two paths for a parcel to qualify for the Current Agricultural Use Valuation (CAUV) Program. To qualify for CAUV, land must meet one of the following requirements during the three years preceding an application.
•Ten or more acres must be devoted exclusively to commercial agricultural use; or
•If under ten acres are devoted exclusively to commercial agricultural use, the farm must produce an average yearly gross income of at least $2,500.
Each of the 3517 different soil types in Ohio is assigned a current ag use value (CAUV) each tax year. The value represents the expected net present value of an acre of land devoted solely to agricultural production for the dominant crops in Ohio. To determine this value, an average of yields and prices for corn, soybeans, and wheat is used to determine gross income. Non-land costs are then subtracted from gross income for a measure of net income. Finally, this net income is divided by a capitalization rate based upon recent values of farm interest and equity rates.
Counties are subject to an update in CAUV every 3 years so only a portion (24 of the 88) have been updated in 2024 that will impact 2025 property taxes. As counties see updated values only every three years, there is the opportunity for large changes as many farmland owners will see this year.
Several factors have led to much of this increase in ag use valuation. Higher crop market prices and increased crop yields included in the formula have been significant drivers in the higher current ag use values. Price increases have been substantial as compared to the prices used in the 2021 calculations (the last time these counties underwent CAUV updates). Corn price has increased 22.6%, soybean price increased 18.8% and wheat price increased 16.0%.
Although we have seen substantial decreases in crop market prices this year, the prices used in the formula don’t reflect this yet. The prices used in the formula are based on a 7 year “olympic average” of United States Department of Agriculture (USDA) marketing year average prices. The higher crop prices in 2020 through 2022 continue to keep this price variable high in spite of recent falling crop prices.
Yields used to determine values for each soil type increased 8.0% for corn, 5.7% for soybeans and 8.5% for wheat as compared to the yields used for the 2021 calculations.
Although Ohio farmers have seen significant increases in input costs since 2021 and the Ohio Crop Enterprise Budgets reflect this, there haven’t been enough years of these higher costs to significantly impact the cost variables used in the formula.
Low interest rates (capitalization rate) have also contributed to the increasing current ag use values as recent higher interest rates aren’t yet fully represented in the formula. The capitalization rate used in the formula in 2024 CAUV calculations was an increase at 8.2% as compared to the rate of 7.8% used in 2021, the last time these counties saw an update in CAUV. Recent higher interest rates will continue to increase the capitalization rate (denominator in the CAUV calculation) in future years which will help to moderate current ag use values.
For a detailed look at the variables and calculations that are used to determine CAUV for farmland, access the Ohio Department of Taxation online publication “2024 Current Agricultural Use Value of Land Tables Explanation of the Calculation of Values for Tax Year 2024”.
The Ohio Department of Taxation annually publishes this explanation of the CAUV valuation method complete with the measures used to calculate CAUV and examples of the calculations for certain soil units for the present year. This year’s document is titled “2024 Current Agricultural Use Value of Land Tables Explanation of the Calculation of Values for Tax Year 2024” and is available online at:
https://tax.ohio.gov/government/real-state/cauv
Woodlots
Those with woodlots will likely see decreases in CAUV for their parcels which will decrease property taxes on these parcels in 2025. This year the Ohio Department of Taxation updated the CAUV woodland clearing cost from $1,000 per acres to over $4,000 per acre based on data from the Ohio Forestry Association (OFA) and inflation data. The larger land clearing costs will result in all woodlands to be valued at the minimum CAUV of $230 per acre in 2024.
Legislative Changes
There has been quite a lot of conversation about legislative changes in determining property taxes in Ohio. There are a number of bills that have been initiated that address changes in valuation and/or taxation of property but none have made much progress. One bill that includes some language that would impact CAUV is Ohio House Bill 447.
Ohio House Bill 447 would modify and expand property tax homestead exemptions, gradually reduce school districts’ 20-mill floor for tax levies and modify the formula for determining farmland’s current agricultural use value (CAUV). The change to CAUV language in the bill would increase the tax additur (a value that reflects the statewide effective property tax rate on agricultural land) to include a 10% floor. In practice, this change would serve to lower the current agricultural use value for land devoted exclusively to agricultural use. This bill has seen little movement recently and remains in committee. Part of the reason that this bill and others haven’t progressed very far through the legislative process is the existence of the Joint Committee on Property Taxation Review and Reform.
A provision in the Senate version of the last biennial state budget was to require CAUV be determined by averaging the last three years of Current Ag Use Values. (This provision was ultimately excluded from the final biennial budget.) The current method for determining CAUV requires an update or reappraisal every 3 years. Significant changes in the variables that are used to calculate CAUV can lead to big changes in values during this this three-year interval. These large increases or decreases are often unanticipated by taxpayers. The provision that was considered would have required the Current Ag Use Value be calculated taking the current year calculated value plus the two prior years’ calculated values (for each soil type) and averaging the three. This proposed method would likely result in smaller increases and decreases in a given 3-year cycle for CAUV calculations. This provision continues to be discussed and may yet see further legislative consideration.
Joint Committee on Property Taxation Review and Reform
The Joint Committee on Property Tax Review and Reform in Ohio was created in the state's operating budget in 2023 to review the state's property tax system and make recommendations to the General Assembly. The committee is considering a wide range of legislative and administrative changes that may change the property tax system in Ohio and is required to issue a report by the end of the 2024.
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 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 131 surveys.
Respondents were asked to group their estimates based on three land quality classes: average, top, and bottom. 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.
Results from the Western Ohio Cropland Values and Cash Rents Survey show cropland values in western Ohio are expected to increase in 2024 by 3.3 to 5.8 percent depending on the region and land class. Cash rents are expected to increase from 3.2 to 3.8 percent in 2024 depending on the region and land class. Decreasing profit margins have competed with relatively strong farm equity positions and increasing property taxes to direct values and rents so far in 2024. Cropland values and cash rents are expected to increase although they are projected to be smaller increases than the past two years.
Factors Important to 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, property taxes and specific conditions of the lease. This fact sheet summarizes the survey research data collected for western Ohio cropland values and cash rents:
https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents
Projected Estimates of Land Values and Cash Rents
Survey respondents were asked 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 an increase of 3.6 percent (for the entire five-year period). Responses for the five-year cropland value change ranged from an increase of 50 percent to a decrease of 50 percent.
The average estimate of cash rent change in the next five years is an increase of 2.7 percent. The cash rent change also had a large range, with responses ranging from an increase of 25 percent to a decrease of 50 percent.
Interest Rates
Survey respondents were also asked to estimate 2024 interest rates for two borrowing terms: 20 year fixed-rate mortgage and operating loan. The average estimate, according to survey respondents, of 20 year fixed-rate mortgage borrowing is 7.1 percent. According to the same respondents, the average estimate of operating loan interest rates is 8.3 percent.
The full survey research summary can be found at the Farm Office website: https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents
Featured Discussion on the Downward Trend in Global Profitability of Crop Farming and a Bearish Outlook for 2024
During its annual conference from June 10th to 14th, the agri benchmark Cash Crop Network discussed recent developments in global crop production. I was fortunate to recently attend the agri benchmark conference in Valladolid, Spain. The conference was hosted by the Spanish Ministry of Agriculture who together with its operating company Tragsa, established and manages a network of 37 typical crop farms. Approximately 55 international experts from all over the world discussed recent results and topical issues of global crop production.
The Ohio State University College of Food, Agricultural and Environmental Sciences is a member of the agri benchmark network and I serve as the network representative for the College. The following are a few selected highlights from the conference.
Last year (2023) was difficult for most typical agri benchmark farms when compared with previous, more profitable, years. Increasing machinery cost and lower output prices many farms experienced a massive downturn in return to land.
The projections for 2024 for the agri benchmark network, which is coordinated by the German Thünen Institute, are even more bearish. The likely relief provided by lower fertilizer prices will not fully compensate for the increase in machinery costs. In addition, based on global price projections, farm-gate production prices are likely to be lower in 2024 than in 2023. Many typical farms are likely to struggle with returns in 2024.
US renewable diesel boom – how US soybean production may increase
A number of U.S. states have implemented blending targets for renewable fuels. As a result, renewable diesel production has increased substantially. By 2029 this will lead to an annual demand of 8 million tons of soybean oil renewable diesel production (FAPRI-MU, 2024), a 3-million-ton increase in demand relative to 2020. The respective supply can be generated through more domestic crushing or an increase of soybean acreage; most likely, a combination of both options will be used. To satisfy this increased demand for soybean oil via expansion of soybean acreage, about 5.1 million ha (+15% of current soybean acreage) of additional farmland would be required. An increase in soybean acreage may come from either (a) shifting away from continuous corn rotations to corn-soy and (b) shifting corn-soy rotations toward corn-soy-soy. Based on agri benchmark data, Margaret Lippsmeyer from Purdue University showed that option (a) would require an increase in soybean prices of 6% and option (b) of 8% to make these rotations preferable over existing ones.
Ukraine grain exports: No specific effects on Central & Eastern European farm-gate prices
At the national level, agri benchmark farm-gate data did not yield an indication that growers in Central and Eastern Europe have been suffering from the inflow of Ukrainian grain. As the graph attached indicates, respective wheat margins between Western Europe and Central and Eastern Europe actually narrowed. However, agri benchmark partners mentioned that in regions close to the Ukrainian border lower than usual prices have been observed.
EU sugar production: Expanding and rather profitable in 2023
Due to high EU sugar prices in 2022, EU production increased by 7% in 2023. Therefore, the EU became a net exporter again. Since global sugar prices were still rather high, the negative impact on domestic prices was low. Thomas de Witte from Thünen Institute stated that profitability of sugar beet production was extraordinarily high – an advantage of 1.000 to even 2.000 €/ha over other crops could be observed. A possible future cut of 15 to 30 €/t in beet prices (or 20% to 40%) would still make beets competitive at wheat prices of 230 €/t.
Regenerative agriculture – a promising option to reduce environmental footprint?
The members of the agri benchmark Network discussed the concept and the environmental claims of regenerative agriculture. Many industry leaders and politicians are promoting this idea to address public concerns regarding agriculture; influential global consulting companies try to educate growers regarding the profitability of suggested measures such as cover crops and no-till. One discussion focused on the notion that proponents of regenerative agriculture oversell the potentials, in particular regarding greenhouse gas savings and economics. Furthermore, the two major sources for GHG emissions – nitrogen use and land use change – are not addressed. Considering these shortcomings, the network will be publishing a thesis paper on this topic and will suggest more meaningful indicators to define goals that effectively reduce GHG emissions and reduce pressure on biodiversity.
agri benchmark, a nonprofit, politically independent organization, provides comprehensive information and advice on crop production systems. With its proven and unique farm level data and a global network of on-the-ground experts, agri benchmark enables economic and environmentally sustainable decision-making by agricultural stakeholders worldwide.
Let’s grow together – Your strategic partner for tomorrow’s agriculture
For more information visit: agribenchmark.org
Evolution of average return to land* across all crops (USD/ha)
* Total revenue (incl. decoupled payments) minus total cost (excluding land cost);
weighted average per farm, simple average across all farms per region
Evolution of farm-gate wheat prices – regional agri benchmark averages (USD/t)
Source: agri benchmark Cash Crop (2024)
Group picture from the conference
Source: agri benchmark Cash Crop (2024)
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The U.S. Department of Agriculture Agricultural Marketing Service (USDA) is asking the agricultural community to weigh in on a new program aimed at the voluntary carbon market in the U.S. The agency has published a Request for Information seeking input on what the agency should consider in developing rules for the new “Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program.” The purpose of the new program, created by the passage of the Growing Climate Solutions Act last year, is to facilitate farmer, rancher, and private forest landowner participation in voluntary carbon markets by: (1) publishing a list of widely accepted protocols designed to ensure consistency, reliability, effectiveness, efficiency, and transparency of voluntary credit markets; (2) publishing descriptions of widely accepted qualifications possessed by covered entities that provide technical assistance to farmers, ranchers, and private forest landowners; (3) publishing a list of qualified technical assistance providers and third-party verifiers; and (4) providing information to assist farmers, ranchers, and private forest landowners in accessing voluntary credit markets.
Farmers haven’t engaged in the voluntary carbon market to the extent some predicted several years ago, when “carbon agreements” began circulating through the agricultural community. A carbon agreement is a private contract that compensates a farmer for adopting practices that sequester carbon, with one ton of sequestered carbon creating a “carbon credit.” Those who pay farmers for the carbon credits can retain the credits or trade the credits through a carbon market. The owner of the carbon credits can use the credits to offset their greenhouse gas emissions, with the goal of reducing their “carbon footprint.”
According to USDA Secretary Vilsack, “high-integrity voluntary carbon markets offer a promising tool to create new revenue streams for producers and achieve greenhouse gas reductions from the agriculture and forest sectors. However, a variety of barriers have hindered agriculture’s participation in voluntary carbon markets and we are seeking to change that by establishing a new Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program.” In its Request for Information, the agency seeks responses to eight questions:
Question 1: How should USDA define the terms “consistency,” “reliability,” “effectiveness,” “efficiency,” and “transparency” (see 7 U.S.C. 6712(c)(1)(A)) for use in protocol evaluation?
Question 2: What metrics or standards should USDA use to evaluate a protocol's alignment with each of the five criteria to be defined in Question 1? What should USDA consider as minimum criteria for a protocol to qualify for listing under the Program?
Question 3: In general, after a new protocol is published, how long does it take for a project to use the protocol and be issued credits ( i.e., what is the lag time between protocol publication and first credit generation)?
Question 4: Which protocol(s) for generating voluntary carbon credits from agriculture and forestry projects should USDA evaluate for listing through the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program?
Question 5: Additional information for any protocol(s) identified under Question 4.
Question 6: How should USDA evaluate technical assistance providers (TAP)? What should be the minimum qualifications, certifications, and/or expertise for a TAP to qualify for listing under the Program?
Question 7: Should the qualifications and/or registration process be different for entities and individuals that seek to register as a TAP?
Question 8: What should be the minimum qualifications and expertise for a third-party verifier to qualify for registration under the Program?
The agency will accept comments on the questions until June 28, 2024.
Part of a broader policy initiative
USDA announced the Request for Information on the same day that Secretary Vilsack, Energy Secretary Granholm, and Treasury Secretary Yellen, published a Joint Statement of Policy and Principles for Voluntary Carbon Markets, which outlines seven principles for the government’s approach to advancing “high-integrity voluntary credit markets,” summarized in a White House Fact Sheet:
- Carbon credits and the activities that generate them should meet credible atmospheric integrity standards and represent real decarbonization.
- Credit-generating activities should avoid environmental and social harm and should, where applicable, support co-benefits and transparent and inclusive benefits-sharing.
- Corporate buyers that use credits should prioritize measurable emissions reductions within their own value chains.
- Credit users should publicly disclose the nature of purchased and retired credits.
- Public claims by credit users should accurately reflect the climate impact of retired credits and should only rely on credits that meet high integrity standards.
- Market participants should contribute to efforts that improve market integrity.
- Policymakers and market participants should facilitate efficient market participation and seek to lower transaction costs.
The recent USDA announcements once again suggest that there are many issues for farmers considering engaging in the carbon market. Caution is usually warranted when dealing with a new, developing market. For farmers who do want to enter into the carbon market, be sure to refer to our posts on Carbon as a commodity for agriculture? and Considering carbon farming? Take time to understand carbon agreements. The Farmers Legal Action Group also has an excellent publication on Farmers Guide to Carbon Market Contracts in Minnesota, also useful for Ohio farmers.
Tags: carbon market, carbon agreement, VCM, Growing Climate Solutions Act, greenhouse gas
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Co-authored by Glen Arnold, OSU Extension Field Specialist in Manure and Nutrient Management
This week’s snow was a reminder that we’re still in the middle of winter in Ohio, with more cold weather yet to come. Winter weather is a challenge for those who handle manure, and it’s equally challenging to know the laws for applying manure on frozen and snow covered ground. Those laws vary according to several important factors: whether ground is frozen or snow covered, whether a farm is operating under a permit, and the geographical location of the land application. Here’s a summary of the different winter application rules and standards in effect this winter.
What is frozen ground? Ohio’s rules don’t define the term frozen ground, but generally, ground is considered frozen if you cannot inject manure into it or cannot conduct tillage within 24 hours to incorporate the manure into the soil.
Farms with Permits. Farms with permits from the Ohio Department of Agriculture (ODA) or Ohio EPA operate under different rules than other manure applications in Ohio, and they cannot apply manure in the winter unless it is an extreme emergency. Movement to other suitable storage is usually the selected alternative. Several commercial manure applicators have established manure storage ponds in recent years to help address this issue.
Applications in the Grand Lake St. Marys (GLSM) watershed. There is a winter manure application ban from December 15 to March 1 for the GLSM watershed, 8ODA has the authority to allow an application, but that is not likely during the winter period. After March 1, applications on frozen ground or ground covered in more than one inch of snow may occur only if the manure is injected or incorporated within 24 hours of surface application. The rule is in OAC 901:13-1-11.
Applications in the Western Lake Erie Basin (WLEB) watershed. In those parts of western Ohio that are in the WLEB watershed, below, the House Bill 1 restrictions established in 2016 are still in effect. The law prohibits any manure application on frozen ground. Applications are permissible on snow-covered soil if the manure is injected into the ground or incorporated within twenty-four hours of surface application. The law is in ORC 939.08.
Other parts of Ohio. It’s important to note that the NRCS Nutrient Management Conservation Practice Standard Code 590 (NRCS 590) now applies statewide in Ohio (but does not replace the GLSM and WLEB restrictions). NRCS 590 was revised in 2020 and states that the surface application of manure on frozen and snow-covered soil is not acceptable unless it is an emergency. An emergency is a temporary situation created by unforeseen causes and only after all other options have been exhausted. In this emergency situation only, limited quantities of liquid manure may be applied to address manure storage limitations only until non-frozen soils are available for manure application. The Ohio Department of Agriculture will enforce NRCS 590 in counties outside of GLSM and WLEB only if there is a manure discharge from the field. If a citation is issued for a discharge, liability for the discharge will be based on the 590 standards.
All applications of liquid manure to frozen and snow-covered soils must be documented in the producers’ records and must be applied in accordance with ALL of the following criteria:
- The rate of application shall not exceed the lesser of 5,000 gallons/acre or P removal for the next crop.
- Applications are to be made on land with at least 90% surface residue cover (cover crop, good quality hay or pasture field, all corn grain residue remaining after harvest, all wheat residue cover remaining after harvest).
- Manure shall not be applied on more than 20 contiguous acres. Contiguous areas for application are to be separated by a break of at least 200 feet.
- Applications should be in areas of the field with the lowest risk of nutrient transport such as areas furthest from streams, ditches, waterways, and with the least amount of slope.
- Application setback distances must be a minimum of 200 feet from grassed waterways, surface drainage ditches, streams, surface inlets, water bodies and 300 feet from all wells, springs and public surface drinking water intakes. This distance may need to be increased due to local conditions.
- For fields exceeding 6% slope, manure shall be applied in alternating strips 60 to 200 feet wide generally on the contour, or in the case of contour strips on the alternating strips.
Stockpiling. For farmers with solid manure, stockpiling could be an option. There are two different types of stockpiles: short-term and long-term.
The short-term stockpile standards are in NRCS Field Office Technical Guide 318, Short Term Storage of Animal Waste and Byproducts Standard (“NRCS 318”). Essentially, short- term stockpile is a pile of solid manure being kept temporarily in one or more locations. It is considered a temporary stockpile as long as the pile is kept at the location for no more than 180 days and stockpiled in the field where the manure will be applied. Setback distances listed in NRCS 318 should be followed to prevent discharge to waters of the state. There are multiple recommendations listed in NRCS 318 that speak to location, timing, and preventative measures to use while stockpiling the manure short term.
The long-term stockpile standards are in NRCS Field Office Technical Guide 313 Waste Storage Facility Standard (“NRCS 313”). A long-term stockpile is directly related to solid manure being piled and kept at a facility for longer than 180 days at a permanent location. It is recommended that all permanent long term storage stockpiles follow the guidelines in NRCS 313 with the utilization of a stacking facility and the structural designs of fabricated structures. A stacking facility can be open, covered or roofed, but specific parameters should be in place to prevent manure runoff from the site—these recommendations are in NRCS 313.
Check with your SWCD office. Regardless of where you are in Ohio, it’s probably best to check with your county Soil and Water Conservation District office before considering winter manure application in Ohio. The rules have changed, and you should become aware of those that affect your operation in your area.
Tags: manure, land application, NRCS 590, western Lake Erie basin, grand lake st marys, nutrient management
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A federal court decision last week vacated the registrations of dicamba products XtendiMax, Engenia, and Tavium for over-the-top applications on soybean and cotton crops, making the use of the products unlawful (see our February 12, 2024 blog post). The decision raised immediate questions about whether the U.S. EPA would exercise its authority to allow producers and retailers to use "existing stocks" of dicamba products they had already purchased. Yesterday, the U.S. EPA answered those questions by issuing an Existing Stocks Order that allows the sale and use of existing stocks of the products that were packaged, labeled, and released for shipment prior to the federal court decision on February 6, 2024. For Ohio, the EPA's order allows the sale and distribution of existing stocks until May 31, 2024 and the use of existing stocks until June 30, 2024.
Here is the EPA's order:
- Pursuant to FIFRA Section 6(a)(1), EPA hereby issues an existing stocks order for XtendiMax® with VaporGrip® Technology (EPA Reg. No. 264-1210), Engenia® Herbicide (EPA Reg. No. 7969-472), and A21472 Plus VaporGrip® Technology (Tavium® Plus VaporGrip® Technology) (EPA Reg. No. 100-1623). This order will remain in effect unless or until subsequent action is taken. The issuance of this order did not follow a public hearing. This is a final agency action, judicially reviewable under FIFRA § 16(a) (7 U.S.C. §136n). Any sale, distribution, or use of existing stocks of these products inconsistent with this order is prohibited.
- Existing Stocks. For purposes of this order, “existing stocks” means those stocks of previously registered pesticide products that are currently in the United States and were packaged, labeled, and released for shipment prior to February 6, 2024 (the effective date of the District of Arizona’s vacatur of the dicamba registrations). Pursuant to FIFRA section 6(a)(1), this order includes the following existing stocks provisions:
a. Sale or Distribution by the Registrants. As of February 6, 2024, sale or distribution by the registrants of these products is prohibited, except for the
purposes of proper disposal or to facilitate lawful export.
b. Sale or Distribution by Persons other than the Registrants. Persons other than the registrants, including but not limited to co-ops and commercial distributors, who are already in possession of these products as of February 6, 2024, may sell or distribute these products until the end date for sale and distribution of existing stocks identified in Table 1; except that such persons may distribute these products after the date identified in Table 1 solely for purposes of proper disposal, lawful export, or to facilitate return to the manufacturer.
c. Distribution or Sale by Commercial Applicators. Notwithstanding paragraph 2.b, for the purpose of facilitating use no later than the relevant end date for use of existing stocks identified in Table 1, distribution or sale of existing stocks of these dicamba products that are in the possession of commercial applicators is permitted
until the relevant end date for use in Table 1.
d. Use of Existing Stocks. As of the date of this order, use of XtendiMax, Engenia, and Tavium is permitted until the relevant date identified in Table 1, provided that such use of existing stocks is consistent in all respects with the previously approved labeling accompanying the product.
What happens next?
The Existing Stocks Order addresses dicamba over-the-top applications for the current growing season, but it's not the end of the dicamba controversy. One potential next step could come from the petitioners in the federal case that vacated the dicamba product registrations, Center for Biological Diversity v. EPA. The petitioners could file a motion asking the Court to review the Existing Stocks Order--an action that took place in the previous dicamba cancellation case, National Family Farm Coaltion v. EPA (Monsanto). The petitioners in that case unsuccessfully sought an Emergency Motion to enforce the vacatur and hold the EPA Administrator in contempt for issuing an Existing Stocks Order. A second next step that may yet play out is an appeal of the recent federal decision by the EPA, which has 30 days from the February 6 decision date to file an appeal. At least one thing is clear at this point: the long-term future of dicamba over-the-top products will continue to exist in a state of uncertainty.
Tags: dicamba, EPA, pesticides, herbicides, FIFRA, existing stocks
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