COLUMBUS, Ohio -- Ohio cropland and cash rents are anticipated to level off in 2009, and in some cases, decline slightly, according to results of the Ohio State University Extension 2009 Ohio Cropland Values and Cash Rents Survey.
"High commodity prices and relatively low input costs drove up profits in 2007 and 2008, but this year is not the case. We are unlikely to see those profit margins in 2009," said Barry Ward, an Ohio State University Extension economist and production business management leader. "That's going to put producers in a tough spot. Will they have made enough money in the last two years to weather the storm in 2009?"
According to the survey, produced by university economists within the Department of Agricultural, Environmental, and Development Economics, Ohio cropland values are expected to decrease by 2.4 percent to 4.9 percent, while cash rents may level off or decrease slightly by 0.24 percent. In some cases, depending on the region and land productivity, cash rents could increase 1.24 percent.
Ward said that falling commodity prices, coupled with high input costs, are driving the potential declines, and the situation isn't likely to change much in 2010.
"Input costs are lagging commodity prices and both producers and landowners are now in a squeeze," said Ward.
Ward said that farmers have a few options to help alleviate some of the financial pressures:
The Ohio Cropland Values and Cash Rents survey is conducted annually and draws on the expertise of farm managers, rural appraisers, agricultural lenders, OSU Extension educators, farmers and Farm Service Agency personnel. The results aid producers and landowners with purchase and rental decisions.
Some results of the 2009 survey include:
Ward estimates that over 50 percent of Ohio's cropland is rented. Of that, 75 percent is locked in cash rents.
SOURCE: Ohio State.