The financial value of Ohio’s farmland appreciated in 2012 and should continue to rise this year, according to a recent report by Barry Ward, a production business management expert at The Ohio State University Extension.
According to the report, which cites data from the Ohio Ag Statistics Service, the value of Ohio’s bare cropland increased 13.6 percent last year, from $4,400 per acre to $5,000 per acre.
“With many dollars and buyers chasing farmland, it isn’t a surprise to see land values increase again substantially in 2012,” according to the report. “Crop profitability along with low interest rates have been the primary drivers in this unprecedented run-up in cropland values. The relative scarcity of farmland has also been a driver in cropland values.”
Ward believes that the outlook for 2013 is for continued growth with the “potential for strong profits.” Farmers are expected to buy up land this year based on their strong balance sheets. Ward also states that investors are closely examining farmland as an alternative investment opportunity.
Other experts believe that regional farmland values – while not in the kind of bubble that eventually burst in the housing market and with Internet stocks – may see a downward correction, according to an AgWeb.com article.
In spite of strong fundamentals such as high commodity prices and low interest rates, factors such as changes in America’s ethanol-based Renewable Fuel Standard and the outcome of farm bill legislation could help shift the multiyear trend of increasing farmland values in the midwest, experts say.
Do you see farmland values continuing to increase? Would you consider buying Ohio farmland this year?
Photo by Peter Bohan, Reuters
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