The past several months have seen a remarkable increase in commodity prices and in farm profits. In part driven by ethanol production and in part driven by increased foreign consumption, corn prices have gone through the roof, dramatically increasing the profits of farms across the country.
These increased prices have been a double-edged sword. While the increased profits have helped stimulate local economies and have been a major boon to farmers, they have come at the cost of increased prices for consumers at grocery stores across the country.
However, another cost of these increased land values has appeared in the form of higher property taxes. Particularly in states where agricultural property taxes are determined by examining the economic productivity of farmland, such Ohio, which sits in the middle of the Corn Belt, small farmers are expected to be hit hard.
In Ohio, property values are determined by Current Agricultural Use Valuation, which examines crop yields, crop patterns, and crop prices to determine the value of farmland. Given the sharp increase in the price of corn and the higher than average yields seen across the Midwest, many economists are predicting a significant increase in agricultural property taxes.
While the increased taxes are not likely to drive farmers out of business, they can pose a serious burden to small farmers who, unlike their corporate cousins, do not have the ready capital to absorb increased operational costs.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com/farm-loans/.
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Written by: Justin Ellison / Farm Plus Staff Writer