Non-farm development has pushed Ohio's cropland prices to the highest levels in the Midwest, an indicator the state's agriculture is losing its Corn Belt character, said agricultural economist Allan Lines, Ohio State University.
Ohio's average cropland value of $2,380 per acre Jan. 1, 2000, is more in line with land values in the northeastern United States, where cropland prices compete with intensive non-agricultural uses, such as housing developments and shopping centers, Lines said.
"We are seeing cropland values reflect non-farm factors, which are individuals' desire for space, the desire to live in a green environment, combined with a transportation system that gives people the ability to live farther from their workplaces," Lines aid. "These are characteristics of rural areas adjacent to the Northeast's major urban centers."
Ohio's cropland values rose 1.3% during 1999, from a previous average of $2,350 per acre, while cropland values declined by 0.9 to 2.1% in Indiana, Illinois and Iowa, according to the U. S. Department of Agriculture. Missouri was the only other Corn Belt State with a positive increase, which was 5%, but still had the lowest average cropland value of $1,250 per acre.
For the first time in recent history, Ohio's cropland values pushed ahead of the Midwest's traditional leader, Illinois, whose cropland was valued at $2,320 per acre Jan. 1. The Corn Belt average cropland value was $2,010 per acre.
Lines said it's significant that Ohio overtook Illinois, whose cropland values more accurately reflect that state's potential for agricultural production and farm profitability. If Ohio were lumped with the Northeast, it would be on the lower tier of that region's cropland value spectrum, where average cropland values are $2,820 per acre.
According to USDA, selected Northeastern state's per-acre cropland values are: Pennsylvania, $3,020; New Jersey, $7,900; Maryland, $3,400; and Delaware, $2,800.
"The Northeast has gone through this major transition, where farmers accept they have to pay higher prices for land, due to non-farm factors," Lines said. "In Ohio, we have been in a state of denial about it for several years."
The transition is reflected in the type of farming done in the Northeast, compared to the Midwest's traditional staples of corn, soybean and wheat production and specialized livestock operations, Lines said. The Northeast has a diversified, mixed agriculture, which is conditioned by local geography, population, soils and climate, he said.
All that points to the need for Ohio farmers to expand the size of their operations, if they expect to maintain profitability for a more "traditional" kind of Midwestern agriculture, according to Lines.
"We have a situation where larger, more efficient farmers will be the model in the future, because of their greater ability to pay for land and input costs," he said.
Lines said Ohio's farms can be roughly categorized into very small, part-time "hobby farms," where the owner works in a non-farm occupation; mid-sized farms that continue to struggle to meet their costs of production; and emerging larger farms able to respond to the higher costs of production.
Whether Ohio should attempt to preserve rural lands for agricultural use will have to depend on the sentiment and actions of local communities, Lines said. But it is not too late to do something, he said.
"What do communities want to do?" Lines asked. "If a community decides it wants to preserve farmland and farming as its economic base, the community has to decide how they want to do it. There is no reason to give up on it."
Some communities are attempting to preserve farmland from non-agricultural development by purchasing development rights, restricting development through zoning laws and increasing the minimum size of lots for single-family dwellings, Lines said.
Not only do rising cropland values affect farming, but so do the changing demographics of increasing numbers of non-farmers in rural areas, Lines said. Potential conflicts may result from non-farmers' unfamiliarity with modern agricultural practices that may interfere with their desire for a scenic, pastoral way of life, he said.
Lines expects continued non-agricultural pressures to increase Ohio cropland values by 2 to 3% this year to about $2,430-$2,450 per acre.
The Jan. 1, 2000, per-acre cropland values for Corn Belt states other than Ohio and annual percentage of change in parentheses are Illinois, $2,320 (-2.1); Indiana, $2,250 (-0.9); Iowa, $1,890 (-2.1) and Missouri, $1,250 (+5.0).