COLUMBUS – The price per acre of farmland in Ohio was valued at $6,460 in 2020, according to United States Department of Agriculture statistics.
Agriculture expert Andy Vance said it’s a significant challenge for beginner and young farmers to own land.
“That barrier to entry, the highest barrier to entry, really is acquisition of land and other capital intensive resources. You’re talking about machinery as well. The cost of farm machinery has gone up considerably over that same time period. The challenge with land in particular, of course, is that we’re not making any more of it,” Vance said.
While owning land is a priority for many farmers, others rent the land they farm. According to the report, monthly rent per acre cost $156 in 2020 – more than double what it was in 2000.
“If you are a landowner and you have several farmers in your area who are interested in farming your land and they all come at you offering more money, you get into sort of an auction type scenario,” Vance said. “And eventually, you know, if you’re a farmer, you have to be worried about bidding yourself out of profitability that you pay so much for the land that you can’t make enough money, particularly in times when prices are low or if you’re in a situation like we’re in this year where fertilizer costs have skyrocketed over the past two years in this general inflationary environment we’re in.
“So you really have to be mindful as a farmer, not to get too far out at the end of the rope playing up these land prices.”
Among the rest of the nation, Ohio is ranked 11th most expensive for purchase price per acre.
“The farmland is very good in most of the state. And at the same time, you have a number of growing metropolitan areas,” Vance said. “Everybody thinks of Cincinnati, Columbus [and] Cleveland, but Ohio is unique compared to a state like, say Iowa as an example or even Illinois, where in addition to the three key cities, you also have Dayton and Toledo and Steubenville and Zanesville and Youngstown and all these other what I call mini-metros that also are expanding.
“You know, as the urban area expands outward as there is development pressure, as more companies like Amazon and Intel come into the state and want to build manufacturing sites… those sites are almost all on farmland. And so while you might be the lucky farmer who wins the lottery by being able to sell property to one of those players or build a new subdivision in a suburb that’s growing out from the urban core, that does mean that there’s fewer acres of farm ground, so you have development pressure.
“You have also the fact that farmland is very good and as farms consolidate, as we mentioned earlier, that drives up the price. It’s a bit of a double-edged sword and all leads to escalating and increasing farm prices because we’re not making any more of it.”