Market Value Of Some Agricultural Lands Continues To Decline
GAINESVILLE—For the sixth consecutive year, the market value of Florida’s citrus lands has declined, according to a recent statewide survey conducted at the University of Florida’s Institute of Food and Agricultural Sciences.
Results of the annual Florida Land Value Survey by UF/IFAS’ Department of Food and Resource Economics show that in the past year, overall agricultural land values declined in the state’s southern regions, while they increased in northern areas. Agricultural land values have declined each year since 1990 in southern regions, but have increased since 1992 in the Northwest and since 1993 in the Northeast.
“Agricultural land values in the state’s southern regions have declined because of low returns to citrus production and the disappearing demand for land to convert to citrus production,” said John Reynolds, a UF/IFAS professor of natural resources. “Low prices for many vegetable crops in the past year also contributed to the decline in agricultural land values. The increases in value in the northern regions have followed the trend of agricultural land values in other southern states as the prices for field crops such as corn, soybeans and cotton have improved.”
Reynolds said the survey’s questionnaire was designed for estimates of the market value of different types of agricultural land in Florida during May 1996. About 235 people responded to the survey,including rural land appraisers, farm lenders, real estate brokers, farm managers, land investors, county extension agents and others who develop and maintain information about rural land values in their areas. The state was divided into four major regions (South, Central, Northeast and Northwest) based upon agricultural production, while a fifth region (Southeast) was not surveyed because of the impact of urban growth in that area.
The largest decline in agricultural land value occurred in grapefruit groves, which dropped 19 percent in the southern region of the state and 15 percent in Central Florida. The value of orange groves declined between 1 and 6 percent. The value of grapefruit groves declined due to low grapefruit prices, Reynolds said, while a slight improvement in orange prices prevented the value of orange groves from declining as much as grapefruit groves.
The values of cropland and pastureland, which were highest in the Central region, declined between 2 and 9 percent in the South and increased 1 to 6 percent in the northern areas. The lowest agricultural land values were reported in Northwest Florida, where they were equal to about three-fifths of the values in the Northeast. The value of farm woods increased about 6 percent in the Northwest and 5 percent inthe Northeast. Depending on the type of agricultural land, values increased in the northern regions from 1 to 8 percent, and the value of transition land (land that is being converted to a nonagricultural use) also increased in most areas.
Since 1988, accredited rural appraiser Juliana Young of Armfield-Wagner Appraisal and Research in Vero Beach has evaluated the survey’s trends in southeast Florida, particularly citrus-related properties and cattle production land. Young said the industry is in transition from many small independent growers to fewer large growers or grower associations, in response to cost effective production and product marketing strength. Grove value and the value of land suitable for grove development will fluctuate with this ownership cycle, Young said.
“Mature groves will continue to have minimal market demand, as many are in a state of transition with replanting necessary to maintain adequate production levels. Many mature grapefruit groves were stressed by the 1989 freeze. They have had low income returns from minimal caretaking over the past several years and have sour orange rootstock, with trees expected to decline from the tristeza citrus virus. These groves are not cost effective to operate under income returns of the past three seasons,” Young said.
Land value shifts will continue to follow income potential, Young said, and with limited crop diversity in citrus production areas and the lengthy time necessary to establish this type of planting, fluctuations in values will continue to be higher than in an area with multi-crop potential.
Land values for cattle production land have remained relatively stable, despite a reduction in income from cattle over the past year, Young said. And vegetable producers have come under heavy pressure from Mexican imports since NAFTA and the devaluation of the peso, Young said, but “no relief appears to be forthcoming from the quota and anti-dumping guarantees of NAFTA for political reasons only Washington can fathom.
“It appears that the Florida vegetable industry is expendable to our politicians and that the urban consumer does not care where their food is produced,” Young said. “There is inadequate alternative demand for the land in vegetable production. Not only will declining values impact vegetable growers,but also land holders who rent their land and the local property tax base.”