Ag land values to increase this year, results may be significant

Casper – Though agriculture organizations have been reluctant to make changes for the formulas used to calculate ag land values, Wyoming Stock Growers Association Executive Director Jim Magagna noted that it might be prudent to consider adjustments.

“The formula for ag land valuation has served us well, and all of the ag industry groups have been reluctant to tweak it,” he said. “Most significantly, ag valuation for tax purposes is on a very steep incline.”

Irrigated cropland values are scheduled to increase 37.5 percent, non-irrigated cropland may increase 23 percent, and rangeland is set to increase 14 percent due to inflated prices for commodities used to calculate land values.

“The formula to calculate land values involves the price of commodities – alfalfa for irrigated lands, wheat in the case of dryland farming and rental rates in the case of rangeland,” Magagna explained, noting that the value of those commodities over the prior five years is used in a weighted average.

Because of high prices in 2013, the value of ag lands will increase significantly this year.

“If we look at ag land valuation in Wyoming compared to our neighboring states, we are lucky,” he continued. “We’ve fought hard to get what we have today, but there has been a call from our members saying we should put a cap or make efforts so the values can’t go up as rapidly.”

Wyoming Farm Bureau passed a resolution at their annual convention to support a five percent cap on property cap increases, and Magagna noted that if the level were to be capped on the upper end, it needs a lower cap as well.

“I think getting a 15 percent cap increase in place might be realistic,” he said. “Our policy has always been that we let the formula continue to work, but if the members feel the issue ought to be addressed, we can look at an array of alternatives and potential legislation in 2015.”
Nuckolls, WSGA Region One vice president, commented, “We need to recognize the livestock industry is getting a double whammy. Our feed costs are through the roof, and then we have to pay the big increase in our taxes.”

Because of increases in commodity prices, as well as overall uncertainty in the ag industry over the past 10 years, WSGA members felt that a directive should be issued to the organization’s leadership to explore options to address extreme fluctuation in tax valuation of land. 

The directive, reading, “WSGA urges that an effort be made to address the extreme fluctuation in agricultural land assessed valuation due to commodity prices,” was passed by the organization’s full membership on Dec. 4.

“Under this directive, we are not asking for anything specific,” Magagna said. “Rather, we are saying we should be engaged in the process.”

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at saige@wylr.net.