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Advisory Committee for the TY 2010 Current Agricultural Use Values

Introduction. This is a meeting before the Ohio Department of Taxation, May 7, 2010. We will be presenting data on the proposed tax year 2010 Current Agricultural Use Values.. Agenda . Updates to the model for 2010Yield updatesCrop pricesCost of inputsCapitalization rateCalculation of soil values.

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Advisory Committee for the TY 2010 Current Agricultural Use Values

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    1. Advisory Committee for the TY 2010 Current Agricultural Use Values Public Hearing Agricultural Advisory Committee May 7, 2010 Tax Equalization Division Ohio Department of Taxation

    2. Introduction This is a meeting before the Ohio Department of Taxation, May 7, 2010. We will be presenting data on the proposed tax year 2010 Current Agricultural Use Values.

    3. Agenda Updates to the model for 2010 Yield updates Crop prices Cost of inputs Capitalization rate Calculation of soil values

    4. Model Updates for 2010 Single crop pattern Based on most recent five year average of acres harvested Corn 39% Soybeans 51% Wheat 10% Eliminate hay Maintain 50% corn and 50% soybeans for organic and frequently flooded soils

    5. Acres Harvested, 2004-2008

    6. Model Updates for 2010 Elimination of hay Previously used two hay crops, mixed hay and grass hay Most produced for private use Lack of a consistent and reliable source for hay prices Produces more uniform values according to slope and productivity index

    7. Crop Yield Updates for 2010 Continue to update crop yields annually; 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

    8. Yield Updates for TY 2010 For 2010, the factor is based upon yield data from 1999-2008 Soil yields from 1984 were increased by the following percentages Corn: 18.73% Soybeans: 12.88% Wheat: 52.50%

    9. Yield Updates for 2010 The yield update increases the corn yield for Miami Silt Loam, a soil with average productivity, from 108 to 128 bushels per acre. By contrast, the average corn yield for all soil types in 2007 was 150 bushels per acre.

    10. CROP PRICES ____________________

    13. Crop Prices 2007, 2009 & 2010

    14. COST of INPUTS ____________________

    15. Non-Land Production Costs Base Unit, TY 2007, 2009 & 2010

    16. Non-Land Production Costs Added Unit, 2007, 2009 & 2010

    17. CAPITALIZATION RATE _____________________________

    18. Capitalization Rate TY 2007-2010 2007 2010 Mortgage/Equity Ratio 60/40 60/40 Years 15 15 Interest Rate 7.49 7.09 Equity Rate 8.35 7.45 Tax Additur 1.4 1.4 Capitalization Rate 8.4% 7.8%

    19. Capitalization Rate TY 2009-2010 2009 2010 Mortgage/Equity Ratio 60/40 60/40 Years 15 15 Interest Rate 7.06 7.09 Equity Rate 7.65 7.45 Tax Additur 1.4 1.4 Capitalization Rate 7.9% 7.8%

    20. Calculation of Soil Values Comparison of Values

    22. 2010 Sample Calculation

    23. 2007 Sample Calculation

    24. 2010 Sample Calculation

    25. Average CAUV Values 2003-2010

    26. Average CAUV Values by Reappraisal Cycle

    27. Conclusion Comments or questions.

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