Advisory Committee for the TY 2010 Current Agricultural Use Values Public Hearing Agricultural...
27
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
-
Upload
samson-small -
Category
Documents
-
view
218 -
download
1
Transcript of Advisory Committee for the TY 2010 Current Agricultural Use Values Public Hearing Agricultural...
Advisory Committee for the TY 2010 Current Agricultural Use Values
Public Hearing Agricultural Advisory Committee
May 7, 2010
Tax Equalization DivisionOhio Department of Taxation
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 2010 Yield updates Crop prices Cost of inputs Capitalization rate Calculation of soil values
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
Acres Harvested, 2004-2008% of
2004 2005 2006 2007 2008 5 Yr Avg TotalCorn 3,300,000 3,410,000 3,110,000 3,780,000 3,260,000 3,372,000 39%Beans 4,420,000 4,480,000 4,620,000 4,130,000 4,480,000 4,426,000 51%Wheat 890,000 830,000 960,000 730,000 1,090,000 900,000 10%Total 8,610,000 8,720,000 8,690,000 8,640,000 8,830,000 8,698,000 100%
Source: Ohio Department of Agriculture Annual Report, Table 5
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
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
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%
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.
CROP PRICES____________________
Crop Year CORN SOYBEANS WHEAT2008 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$ 1996 2.55$ 6.85$ 4.00$
CROP PRICES USED IN FIVE YR. AVERAGESource: Ohio Agricultural Statistics Service
Tax Year CORN SOYBEANS WHEAT2010 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$ 1997 2.33$ 5.63$ 3.08$
AVERAGED CROP PRICES
Crop Prices 2007, 2009 & 2010
Difference
2007 2009 2010 07-10 09-10
Corn $1.96 $2.29 $2.66 $0.70 $0.37
Beans $4.89 $5.60 $6.41 $1.52 $0.81
Wheat $2.64 $3.05 $3.41 $0.77 $0.36
COST of INPUTS____________________
Non-Land Production CostsBase Unit, TY 2007, 2009 & 2010
Difference
2007 2009 2010 07-10 09-10
Corn $235.70 $264.12 $286.65 $50.95 $22.53
Beans $168.14 $175.21 $189.10 $20.96 $13.89
Wheat $153.67 $159.01 $170.16 $16.49 $11.15
Non-Land Production CostsAdded Unit, 2007, 2009 & 2010
Difference
2007 2009 2010 07-10 09-10
Corn $0.91 $0.72 $0.83 ($0.08) $0.11
Beans $0.49 $0.57 $0.66 $0.17 $0.09
Wheat $0.81 $0.86 $1.14 $0.33 $0.28
CAPITALIZATION RATE_____________________________
Capitalization RateTY 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%
Capitalization RateTY 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%
Calculation of Soil ValuesComparison of Values
2007 Sample Calculation
SOIL: Millgrove, Silt LoamSLOPE, EROSION: 0-2, SLIGHTDRAINAGE: Very PoorlyPROD. INDEX: 100
CORN BEANS WHEAT HAYYIELD / ACRE 144 52 64 6Yield adjustment 1.138136 1.108219 1.45 1.026336Adjusted Yield 164 58 93 6.2X PRICE / UNIT $1.96 $4.89 $2.64 $76.66 = GROSS INCOME / ACRE $321.44 $283.62 $245.52 $475.29YIELD / ACRE 164 58 93 6.2BASE YIELD 100 35 50 2 = YIELD ABOVE BASE 64 23 43 4.2 X ADDED UNIT COST $0.91 $0.49 $0.81 $23.98ADDED UNIT COST / ACRE $58.24 $11.27 $34.83 $100.72BASE YIELD COST $235.70 $168.14 $153.67 $134.50 = TOTAL NON-LAND PROD. COST $293.94 $179.41 $188.50 $235.22
NET RETURN / ACRE $27.50 $104.21 $57.02 $240.08 X CROPPING PATTERN 0.35 0.45 0.15 0.05 = ROTATIONAL NET RETURN / ACRE $9.63 $46.89 $8.55 $12.00TOTAL ROTATIONAL NET RETURN $77.08
CAPITALIZATION RATE 0.084 X Risk Management Factor 0.95 = ADJUSTED CAPITALIZATION RATE 0.0798CAUV LAND VALUE $965.87 SAY $970
2010 Sample Calculation
SOIL: Millgrove, Silt LoamSLOPE, EROSION: 0-2, SLIGHTDRAINAGE: Very PoorlyPROD. INDEX: 100
CORN BEANS WHEATYIELD / ACRE 144 52 64Yield adjustment 1.187288 1.128767 1.525Adjusted Yield 171 59 98X PRICE / UNIT $2.66 $6.41 $3.41 = GROSS INCOME / ACRE $454.86 $378.19 $334.18YIELD / ACRE 171 59 98BASE YIELD 118 36 52 = YIELD ABOVE BASE 53 23 46 X ADDED UNIT COST $0.83 $0.66 $1.14ADDED UNIT COST / ACRE $43.99 $15.18 $52.44BASE YIELD COST $286.65 $189.10 $170.16 = TOTAL NON-LAND PROD. COST $330.64 $204.28 $222.60
NET RETURN / ACRE $124.22 $173.91 $111.58 X CROPPING PATTERN 0.39 0.51 0.1 = ROTATIONAL NET RETURN / ACRE $48.45 $88.69 $11.16TOTAL ROTATIONAL NET RETURN $148.30
CAPITALIZATION RATE 0.078 X Risk Management Factor 1 = ADJUSTED CAPITALIZATION RATE 0.078CAUV LAND VALUE $1,901.26 SAY $1,900
2007 Sample Calculation
SOIL: Miami, Silt LoamSLOPE, EROSION: 2-6, SLIGHTDRAINAGE: WellPROD. INDEX: 76
CORN BEANS WHEAT HAYYIELD / ACRE 108 38 50 4.6Yield adjustment 1.138136 1.108219 1.45 1.026336Adjusted Yield 123 42 73 4.7X PRICE / UNIT $1.96 $4.89 $2.64 $76.66 = GROSS INCOME / ACRE $241.08 $205.38 $192.72 $360.30YIELD / ACRE 123 42 73 4.7BASE YIELD 100 35 50 2 = YIELD ABOVE BASE 23 7 23 2.7 X ADDED UNIT COST $0.91 $0.49 $0.81 $23.98ADDED UNIT COST / ACRE $20.93 $3.43 $18.63 $64.75BASE YIELD COST $235.70 $168.14 $153.67 $134.50 = TOTAL NON-LAND PROD. COST $256.63 $171.57 $172.30 $199.25
NET RETURN / ACRE ($15.55) $33.81 $20.42 $161.06 X CROPPING PATTERN 0.35 0.37 0.15 0.13 = ROTATIONAL NET RETURN / ACRE ($5.44) $12.51 $3.06 $20.94TOTAL ROTATIONAL NET RETURN $31.07
CAPITALIZATION RATE 0.084 X Risk Management Factor 1 = ADJUSTED CAPITALIZATION RATE 0.084CAUV LAND VALUE $369.85 SAY $370
2010 Sample Calculation
SOIL: Miami Silt LoamSLOPE, EROSION: 2-6, SLIGHTDRAINAGE: Well PROD. INDEX: 76
CORN BEANS WHEATYIELD / ACRE 108 38 50Yield adjustment 1.187288 1.128767 1.525Adjusted Yield 128 43 76X PRICE / UNIT $2.66 $6.41 $3.41 = GROSS INCOME / ACRE $340.48 $275.63 $259.16YIELD / ACRE 128 43 76BASE YIELD 118 36 52 = YIELD ABOVE BASE 10 7 24 X ADDED UNIT COST $0.83 $0.66 $1.14ADDED UNIT COST / ACRE $8.30 $4.62 $27.36BASE YIELD COST $286.65 $189.10 $170.16 = TOTAL NON-LAND PROD. COST $294.95 $193.72 $197.52
NET RETURN / ACRE $45.53 $81.91 $61.64 X CROPPING PATTERN 0.39 0.51 0.1 = ROTATIONAL NET RETURN / ACRE $17.76 $41.77 $6.16TOTAL ROTATIONAL NET RETURN $65.69
CAPITALIZATION RATE 0.078 X Risk Management Factor 1 = ADJUSTED CAPITALIZATION RATE 0.078CAUV LAND VALUE $842.24 SAY $840
Average CAUV Values 2003-2010
Product. Index
2003 2004 2005 2006 2007 2008 2009 2010
0-49 100 100 100 108 100 100 176 200
50-59 101 114 106 134 100 100 200 214
60-69 113 104 101 125 123 188 435 436
70-79 244 157 124 241 283 431 746 845
80-89 467 342 293 465 521 708 1059 1278
90-99 663 533 492 675 747 973 1368 1601
100+ 820 690 650 880 970 1200 1620 1900
TOTALS 163 135 123 177 181 249 459 505
Average CAUV Values by Reappraisal Cycle
0
100
200
300
400
500
600
1996-1998 1999-2001 2002-2004 2005-2007 2008-2010
TY 2008TY 2009TY 2010
Conclusion
Comments or questions.
