Legal with Leah: Understanding Ohio’s 2026 CAUV Update
The 2026 Current Agricultural Use Value update brings lower values in many reappraisal counties and a significant policy win on permanent pasture.
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Note: This story was updated in 2017.
Ohio Farm Bureau has information current to the 2023-2024 valuation.
Farmers who are enrolled in the Current Agricultural Use Valuation (CAUV) program have been seeing sharp increases in the taxable value of their land. While no less frustrating to landowners, these increases can be explained by looking at how the formula works.
What is CAUV?
CAUV was established after Ohio Farm Bureau campaigned for a constitutional amendment to have farmland taxed for its agricultural value, rather than its fair market value. The agricultural value of farmland is determined by the following equation:(Income from agricultural production – Non-land production costs)/ Capitalization rate = Current Agricultural Use Value
1. Start with gross farm income: The projected farm income for all land enrolled in CAUV is based on the soil type and data from three crops: corn, soybeans and wheat.Yield information for each of these crops starts with Farm Service Agency production data and is adjusted by the 10-year average of actual statewide yields.Prices for each crop are based on a survey of Ohio grain elevators.*
2. Subtract non-land production costs*: These costs are based on Ohio State University data and include typical farm input costs for corn, soybeans and wheat.
3. Divide by the Capitalization Rate*: This rate is based on the mortgage interest rate for a 15-year fixed rate mortgage from Farm Credit Services with 40% equity and 60% debt and is adjusted for taxes.
*When determining crop prices, production costs and the capitalization rate, the last seven years of values are used, with the highest and lowest values removed and the remaining five years averaged.
Consider the following example based on 2017 data for the Miami Silt Loam soil type:
Corn:
- Average Yield: 143 bushels per acre
- Average Price: $4.51 per bushel
- Gross Income Per Acre: $644.93
- Non-land production costs: $561.98
- Net return per acre: $82.95
Soybeans:
- Average Yield: 50 bushels per acre
- Average Price: $10.83 per bushel
- Gross Income Per Acre: $541.50
- Non-land production costs: $360.75
- Net return per acre: $180.75
Wheat:
- Average Yield: 77 bushels per acre
- Average Price: $5.53 per bushel
- Gross Income Per Acre: $425.81
- Non-land production costs: $370.23
- Net return per acre: $55.58
Factoring in Cropping Patterns:
- Harvest data will determine the percent that each crop will represent in the final per acre income.
- 2017 Cropping Data: Corn: 40 percent, Soybeans: 54 percent, Wheat: 6 percent
Final Per Acre Income for Miami Silt Loam:
- Corn: $82.95 x 0.4 = $33.18
- Soybeans: $180.75 x .54 = $97.61
- Wheat: $55.58 x .06 = $3.33
- Total = $134.12
Current Agricultural Use Value:
- A net income of $134.12 divided by the Capitalization Rate of 8.0 percent = CAUV Land Value of $1680 per acre 2017 CAUV Value
So, why did CAUV values increase?
From 2008-2014, the CAUV values resulting from the CAUV calculation saw large increases. This was due to two main factors:
(1) Crop prices had increased substantially through 2012, and those higher crop prices were added into the formula, drawing up the average crop price used in the calculations. This resulted in a higher net income in the calculation as crop prices outpaced increases in production costs.
(2) At the same time, the capitalization rate used in the formula decreased substantially. The capitalization rates dropped from around 8% in the mid-2000s to a low of 6.2% in 2014. This was a result of interest rates being held at or near zero by the Federal Reserve which also held the interest rates used in the calculation at historic lows.
Simply put: A higher net income divided by a lower capitalization rate equals an increase in CAUV land values.
What’s changed since 2014?
Since 2014, Ohio Farm Bureau has lobbied the tax department and the Ohio legislature to make important changes to the CAUV calculation. In 2015, OFBF was successful in gaining data updates to the CAUV formula from the Ohio Department Taxation. These changes prevented bigger increases and ensured that the most up-to-date data available was being used in the CAUV calculation. In 2017, OFBF was successful in lobbying the General Assembly to include CAUV reform language in the biennial budget bill. Those changes ensured the most accurate data was being used to calculate the capitalization rate and allowed conservation lands to be valued at the minimum value, phasing in over a six year period to allow communities to adjust to more accurate valuations. The capitalization rate changes alone created an average 30% decrease in CAUV cropland values for those counties on the 2017 reassessment cycle. Counties on the 2018 and 2019 reassessments will see the impacts of CAUV reform as they reach their next reassessment.
Final Note
The rate of increase in CAUV land values does not necessarily translate to the same rate of increase in taxes owed by the landowner due to tax credits and other factors. CAUV values remain substantially lower than the fair market value, making the program essential to farmers.
My first recommendation in your journey is to start out with a local farming friend or mentor along with joining an organization like Ohio Farm Bureau.
We’re just so thankful for the Farm Bureau and the foundation for helping put this together. And of course, the Boyert family for the vision they had with this grant. It’s jumping us forward 10 years. It’s unbelievable.
I could not have done it without the resources I have found through Farm Bureau.
It wasn’t until I joined the Wilmington College Collegiate Farm Bureau that I truly saw how my passion could translate into leadership, advocacy and a career.
The issue of property taxation remains as one of the biggest challenges our members face today. Ensuring agricultural property is valued for its agricultural potential and not development is critical to the continued success of Ohio agriculture.
Through the Select Partner program, we became educated in farm insurance and weren't just selling policies. It became more and more clear why farmers need an advocate like Ohio Farm Bureau.
So many of the issues that OFBF and its members are advocating for are important to all Ohioans. I look at OFBF as an agricultural watchdog advocating for farmers and rural communities across Ohio.
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