Agricultural Advisory Committee for the TY 2011 Current Agricultural Use Values
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Agricultural Advisory Committee for the TY 2011 Current Agricultural Use Values Public Hearing Agricultural Advisory Committee February 25, 2011 Tax Equalization Division Ohio Department of Taxation
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Agricultural Advisory Committee for the TY 2011 Current Agricultural Use Values. Public Hearing Agricultural Advisory Committee February 25, 2011 Tax Equalization Division Ohio Department of Taxation. Introduction. - PowerPoint PPT Presentation
Transcript of Agricultural Advisory Committee for the TY 2011 Current Agricultural Use Values
Agricultural Advisory Committee for the TY 2011
Current Agricultural Use Values
Public Hearing
Agricultural Advisory Committee February 25, 2011
Tax Equalization Division
Ohio Department of Taxation
Introduction
This is a hearing before the Ohio Department of Taxation, February 25, 2011. We will be presenting data on the proposed tax year 2011 Current
Agricultural Use Values.
Agenda
Use Value Calculation Crop yields Crop rotation
– Minimum values Factors
– Crop prices– Cost of inputs– Capitalization rate
Calculation of Soil Values Sample calculations, 2008 & 2011
Comparative Charts – Cropland Data
Crop Yield Updates for 2011
Annual update of crop yields; began in TY 2006
Crop yields reported by the Ohio Agricultural Statistics Service for the past 10 years are averaged– That average is divided by the original
yields published in 1984 The resulting factor is applied to the
yields of record for each soil type
Yield Updates for TY 2011
For 2011, the factor is based upon yield data from 2000-2009
Soil yields from 1984 were increased by the following percentages– Corn: 22.80%
– Soybeans: 16.44%
– Wheat: 52.95%
Yield Updates for 2011
The yield update increases the corn yield for Miami Silt Loam, a soil with average productivity, from 108 to 133 bushels per acre.
By contrast, the average corn yield for all soil types in 2009 was 174 bushels per acre.
Cropping Pattern
Single crop pattern Based on most recent five year
average of acres harvested– Corn 38.6%– Soybeans 50.9%– Wheat 10.5%
Maintain 50% corn and 50% soybeans for organic and frequently flooded soils
Acres Harvested, 2005-2009% of
2005 2006 2007 2008 2009 5 Yr Avg TotalCorn 3,410,000 3,110,000 3,780,000 3,260,000 3,310,000 3,374,000 38.6%Beans 4,480,000 4,620,000 4,130,000 4,480,000 4,530,000 4,448,000 50.9%Wheat 830,000 960,000 730,000 1,090,000 980,000 918,000 10.5%Total 8,720,000 8,690,000 8,640,000 8,830,000 8,820,000 8,740,000 100%
Source: Ohio Department of Agriculture Annual Report, Table 5
Minimum Use Values
Slopes 25% or Less 2008 2009 2010 2011
Cropland $100 $170 $200 $300Pasture $100 $170 $200 $300Woodland $100 $100 $120 $200
Slopes exceeding 25%Pasture $100 $100 $100 $200Woodland $100 $100 $100 $200
CROP PRICES____________________
Crop Year CORN SOYBEANS WHEAT2009 3.70$ 9.60$ 4.35$ 2008 3.95$ 9.60$ 5.80$ 2007 3.95$ 10.10$ 5.50$ 2006 3.30$ 6.25$ 3.30$ 2005 1.80$ 5.55$ 3.20$ 2004 1.85$ 5.15$ 3.15$ 2003 2.45$ 7.20$ 3.20$ 2002 2.50$ 5.45$ 3.20$ 2001 2.00$ 4.40$ 2.50$ 2000 2.00$ 4.80$ 2.05$ 1999 2.00$ 4.80$ 2.10$ 1998 2.00$ 5.30$ 2.30$ 1997 2.65$ 6.45$ 3.25$
CROP PRICES USED IN FIVE YR. AVERAGESource: Ohio Agricultural Statistics Service
Tax Year CORN SOYBEANS WHEAT2011 2.89$ 7.22$ 3.64$ 2010 2.66$ 6.41$ 3.41$ 2009 2.29$ 5.60$ 3.05$ 2008 2.02$ 5.19$ 2.89$ 2007 1.96$ 4.89$ 2.64$ 2006 1.99$ 4.84$ 2.49$ 2005 2.06$ 5.12$ 2.49$ 2004 2.05$ 5.11$ 2.56$ 2003 2.11$ 5.34$ 2.69$ 2002 2.12$ 5.42$ 2.79$ 2001 2.25$ 5.74$ 2.95$ 2000 2.23$ 5.80$ 3.12$ 1999 2.34$ 5.88$ 3.14$ 1998 2.37$ 5.86$ 3.24$
AVERAGED CROP PRICES
Crop Prices 2008, 2010 & 2011
Difference
2008 2010 2011 08-11 10-11
Corn $2.02 $2.66 $2.89 $0.87 $0.23
Beans $5.19 $6.41 $7.22 $2.03 $0.81
Wheat $2.89 $3.41 $3.64 $0.75 $0.23
COST of INPUTS____________________
Non-Land Production CostsBase Unit, TY 2008, 2010 & 2011
Difference
2008 2010 2011 08-11 10-11
Corn $242.39 $286.65 $300.98 $58.59 $14.33
Beans $174.44 $189.10 $204.60 $30.16 $15.50
Wheat $156.68 $170.16 $192.94 $36.26 $22.78
Non-Land Production CostsAdded Unit, 2008, 2010 & 2011
Difference
2008 2010 2011 08-11 10-11
Corn $0.90 $0.83 $0.84 ($0.06) $0.01
Beans $0.50 $0.66 $0.77 $0.27 $0.11
Wheat $0.84 $1.14 $1.19 $0.35 $0.05
CAPITALIZATION RATE_____________________________
Capitalization RateTY 2008-2011
2008 2011
Mortgage/Equity Ratio 60/40 60/40
Years 15 15
Interest Rate 7.29 7.00
Equity Rate 8.15 7.30
Tax Additur 1.4 1.3
Capitalization Rate 8.3% 7.6%
Capitalization RateTY 2010-2011
2010 2011
Mortgage/Equity Ratio 60/40 60/40
Years 15 15
Interest Rate 7.09 7.00
Equity Rate 7.45 7.30
Tax Additur 1.4 1.3
Capitalization Rate 7.8% 7.6%
Calculation of Soil ValuesComparison of Values
2011 Sample Calculation
SOIL: Millgrove, Silt LoamSLOPE, EROSION: 0-2, SLIGHTDRAINAGE: Very PoorlyPROD. INDEX: 100
CORN BEANS WHEATYIELD / ACRE 144 52 64Yield adjustment 1.227966 1.164384 1.529545Adjusted Yield 177 61 98X PRICE / UNIT $2.89 $7.22 $3.64 = GROSS INCOME / ACRE $511.53 $440.42 $356.72YIELD / ACRE 177 61 98BASE YIELD 110 35 51 = YIELD ABOVE BASE 67 26 47 X ADDED UNIT COST $0.84 $0.77 $1.19ADDED UNIT COST / ACRE $56.28 $20.02 $55.93BASE YIELD COST $300.98 $204.60 $192.94 = TOTAL NON-LAND PROD. COST $357.26 $224.62 $248.87
NET RETURN / ACRE $154.27 $215.80 $107.85 X CROPPING PATTERN 0.386 0.509 0.105 = ROTATIONAL NET RETURN / ACRE $59.55 $109.84 $11.32TOTAL ROTATIONAL NET RETURN $180.71
CAPITALIZATION RATE 0.076 X Risk Management Factor 1 = ADJUSTED CAPITALIZATION RATE 0.076CAUV LAND VALUE $2,377.82 SAY $2,380
2008 Sample Calculation
SOIL: Millgrove, Silt LoamSLOPE, EROSION: 0-2, SLIGHTDRAINAGE: Very PoorlyPROD. INDEX: 100
CORN BEANS WHEAT HAYYIELD / ACRE 144 52 64 6Yield adjustment 1.177966 1.150685 1.522727 1.024911Adjusted Yield 170 60 97 6.1X PRICE / UNIT $2.02 $5.19 $2.89 $79.80 = GROSS INCOME / ACRE $343.40 $311.40 $280.33 $486.78YIELD / ACRE 170 60 97 6.1BASE YIELD 100 35 50 2 = YIELD ABOVE BASE 70 25 47 4.1 X ADDED UNIT COST $0.90 $0.50 $0.84 $24.23ADDED UNIT COST / ACRE $63.00 $12.50 $39.48 $99.34BASE YIELD COST $242.39 $174.44 $156.68 $133.80 = TOTAL NON-LAND PROD. COST $305.39 $186.94 $196.16 $233.14
NET RETURN / ACRE $38.01 $124.46 $84.17 $253.64 X CROPPING PATTERN 0.35 0.45 0.15 0.05 = ROTATIONAL NET RETURN / ACRE $13.30 $56.01 $12.63 $12.68TOTAL ROTATIONAL NET RETURN $94.62
CAPITALIZATION RATE 0.083 X Risk Management Factor 0.95 = ADJUSTED CAPITALIZATION RATE 0.07885CAUV LAND VALUE $1,199.97 SAY $1,200
2011 Sample Calculation
SOIL: Miami Silt LoamSLOPE, EROSION: 2-6, SLIGHTDRAINAGE: Well PROD. INDEX: 76
CORN BEANS WHEATYIELD / ACRE 108 38 50Yield adjustment 1.227966 1.164384 1.529545Adjusted Yield 133 44 76X PRICE / UNIT $2.89 $7.22 $3.64 = GROSS INCOME / ACRE $384.37 $317.68 $276.64YIELD / ACRE 133 44 76BASE YIELD 110 35 51 = YIELD ABOVE BASE 23 9 25 X ADDED UNIT COST $0.84 $0.77 $1.19ADDED UNIT COST / ACRE $19.32 $6.93 $29.75BASE YIELD COST $300.98 $204.60 $192.94 = TOTAL NON-LAND PROD. COST $320.30 $211.53 $222.69
NET RETURN / ACRE $64.07 $106.15 $53.95 X CROPPING PATTERN 0.386 0.509 0.105 = ROTATIONAL NET RETURN / ACRE $24.73 $54.03 $5.66TOTAL ROTATIONAL NET RETURN $84.43
CAPITALIZATION RATE 0.076 X Risk Management Factor 1 = ADJUSTED CAPITALIZATION RATE 0.076CAUV LAND VALUE $1,110.87 SAY $1,110
2008 Sample Calculation
SOIL: Miami, Silt LoamSLOPE, EROSION: 2-6, SLIGHTDRAINAGE: WellPROD. INDEX: 76
CORN BEANS WHEAT HAYYIELD / ACRE 108 38 50 4.6Yield adjustment 1.177966 1.150685 1.522727 1.024911Adjusted Yield 127 44 76 4.7X PRICE / UNIT $2.02 $5.19 $2.89 $79.80 = GROSS INCOME / ACRE $256.54 $228.36 $219.64 $375.06YIELD / ACRE 127 44 76 4.7BASE YIELD 100 35 50 2 = YIELD ABOVE BASE 27 9 26 2.7 X ADDED UNIT COST $0.90 $0.50 $0.84 $24.23ADDED UNIT COST / ACRE $24.30 $4.50 $21.84 $65.42BASE YIELD COST $242.39 $174.44 $156.68 $133.80 = TOTAL NON-LAND PROD. COST $266.69 $178.94 $178.52 $199.22
NET RETURN / ACRE ($10.15) $49.42 $41.12 $175.84 X CROPPING PATTERN 0.35 0.37 0.15 0.13 = ROTATIONAL NET RETURN / ACRE ($3.55) $18.29 $6.17 $22.86TOTAL ROTATIONAL NET RETURN $43.76
CAPITALIZATION RATE 0.083 X Risk Management Factor 1 = ADJUSTED CAPITALIZATION RATE 0.083CAUV LAND VALUE $527.23 SAY $510
Average CAUV Values 2004-2011
Product. Index
2004 2005 2006 2007 2008 2009 2010 2011
0-49 100 100 108 100 100 176 200 300
50-59 114 106 134 100 100 200 214 328
60-69 104 101 125 123 188 435 436 632
70-79 157 124 241 283 431 746 845 1126
80-89 342 293 465 521 708 1059 1278 1641
90-99 533 492 675 747 973 1368 1601 2017
100+ 690 650 880 970 1200 1620 1900 2380
TOTALS 135 123 177 181 249 459 505 700
Average CAUVDollars per Acre
1999-2011
$0
$100
$200
$300
$400
$500
$600
$700
1999($262)
2002($180)
2005($123)
2008($249)
2009($459)
2010($505)
2011($700)
Ohio Cropland Average ValueDollars per Acre, 1999-2010
USDA
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
1999($2,270)
2002($2,630)
2005($3,190)
2008($4,140)
2009($3,900)
2010($3,950)
Ohio Cropland Average Valueand Average CAUV
Dollars per Acre, 1999-2010
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
1999 2002 2005 2008 2009 2010
Conclusion Comments or questions. CAUV information is available on the
Department of Taxation’s web site --Tax.ohio.gov, under Government, Real Property Tax.
Contact information:Tax Equalization Division614.466.5744
