Current Agricultural Use Value (CAUV)

What is Current Agricultural Use Value?
CAUV is the current value of farmland in agricultural use rather than its full market value. In 1972, Ohio voters approved a constitutional amendment that allowed qualified agricultural land to be valued at its current agricultural use value for real property tax purposes rather than fair market value.

What are the requirements for CAUV?
A minimum of 10 acres of land devoted to commercial agricultural use.

How is CAUV calculated?
There are five factors to consider when values are established:

  • Cropping pattern - based upon the slope of the soil: level ground weighted towards corn and beans; steep slope weighted towards wheat and hay.
  • Crop prices - based upon a survey of grain elevators in Ohio.
  • Crop yields - based upon FSA yields per acre for each soil type.
  • Non-land production costs - based upon farmer surveys by The Ohio State University.
  • Capitalization rate - based upon the interest rate for a 15-year fixed rate mortgage at Farm Credit
  • Services. The crop prices, crop yields, non-land production costs and capitalization rate are calculated by taking the previous seven years of numbers, eliminating the highest number and the lowest number, and then averaging the remaining five numbers. These four factors are then added and subtracted to determine the net profit per acre of soil type, and that number is then divided by the capitalization rate. This calculation is performed for each of the 3650 soil types in Ohio.

 

What crops are used in CAUV and what is the trend in pricing?
The three crops are corn, soybeans and wheat. Below are example prices
and years:

Tax Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Crop Years 96-02 97-03 98-04 99-05 00-06 01-07 02-08 03-09 04-10 05-11 06-12
Corn $2.05 $2.06 $1.99 $1.96 $2.02 $2.29 $2.66 $2.89 $3.19 $3.91 $4.48
Soybeans $5.11 $5.12 $4.84 $4.89 $5.19 $5.60 $6.41 $7.22 $7.74 $8.98 $10.13
Wheat $2.56 $2.49 $2.49 $2.64 $2.89 $3.05 $3.41 $3.64 $3.98 $4.54 $5.16


2014 CAUV Hearing Values
2014 Current Agricultural Use Value of Land Tables

Why are Current Agricultural Values increasing?
In the history of CAUV, 2005 values were at an all time low. The 2005 values represented the lowest averages for all soil types in Ohio. Current Agricultural Values are now trending upward, so it doesn t take much to see in actual increase in per acres pricing. The biggest factor increasing land value was an adjustment of the crop yields by Farm Service Agency. It was discovered in 2005 that FSA had not adjusted crop yields since 1984. Beginning in 2006, the yields per acre for each soil type were adjusted by multiplying the FSA yield by a factor that was determined by comparing the average of the last 10 years of actual yield
to the FSA yield. Soil values change in tax year 2011 being a reappraisal year.

Is CAUV right for my farm?
Current Agricultural Use Values were established in 1972 with the intent to accurately reflect what is happening in the farming industry.  The formula for CAUV is very complicated, but the reduction in value
compared to the market value of agricultural land, is still a savings for agricultural land.

Information taken from Ohio Farm Bureau at ofbf.org and Ohio Department of Taxation at tax.ohio.gov