By:
Chris Eversole

Source(s):
John Reynolds (352) 392-1845 ext. 412
Mark Brown (352) 392-1874 ext. 501

GAINESVILLE — The value of Florida’s citrus groves is plummeting because of a glut of fruit, while urbanization is rapidly pushing up the value of agricultural land near cities, a University of Florida survey shows.

Grapefruit groves are hardest hit. Since a peak in 1990, the value of grapefruit groves has dropped 75 percent in the 14 counties in the south region and gone down 67 percent in the 14 counties in the central region, the 1998 Florida Land Market Report shows. This includes the past year’s decline of 25 percent in the south region and 21 percent in the central region.

Meanwhile, the value of agricultural land ripe for development within five miles of cities of 50,000 people or more rose 15 percent in the northeast region, 8 percent in the central and northwest regions and 7 percent in the southwest region, according to the survey, conducted by the department of food and resource economics of UF’s Institute of Food and Agricultural Sciences.

The only region in which the estimated value of agricultural land within five miles of a city declined was the southeast.

“The 1.4 percent decline in the region, which includes Dade, Broward and Palm Beach counties, wasn’t significant,” said UF agricultural economist John Reynolds. “There is a limited amount of agricultural land in that region, and with prices at $28,000 an acre, people have a big incentive to sell instead of staying in agriculture.”

The value of citrus groves is declining because citrus producers planted heavily in Southwest Florida after freezes wiped out thousands of acres of citrus in Central Florida during the 1980s, Reynolds said.

“The new groves came into production during the ’90s, and the supply of fruit outpaced demand,” he said. “When this happened, citrus prices dropped, and land values declined.

“With grapefruit groves dropping in value from the $12,000-per-acre range to the $3,000-per-acre range in the past eight years, producers are in an economic dilemma,” Reynolds said. “They have so much money sunk into their land that they can’t afford to get out of production, but many of them can’t turn a profit.”

Orange groves are not declining in value as much as grapefruit groves are, the survey showed. In the 1998 survey, the value of orange groves declined 6 percent in the south region and less than 1 percent in the central region.

“Orange groves are holding their value better than grapefruit groves because demand for Florida orange juice is growing,” said Mark Brown, an economist with the Florida Department of Citrus and a member of the UF faculty.

“The biggest growth is in ready-to-serve orange juice because many consumers prefer it over concentrate. Ready-to-serve juice competes well against juice imported from Brazil,” he said. “Brazil exports mostly concentrated juice because it takes up one-seventh the cargo space.”

Meanwhile, Reynolds said, two factors contribute to the sharp increases in the value of land near cities in the northeast region.

First, the coastline between Jacksonville and Daytona Beach is developing rapidly. “Prices are shooting up because we’re rapidly running out of room along the coast,” Reynolds said.

Second, the areas around Gainesville are becoming very popular for new residents. “People like the amenities of the University of Florida and the area’s outstanding health-care facilities,” he said.

“Although land values in northeast Florida are rising, property is relatively affordable,” he said. “Land in transition from agriculture to urban development has an average value of $10,600 per acre in northeast Florida, while transition land along the southeast coast is almost three times higher.”

The survey also shows:

— the changes in the value of irrigated land used for crops varied from an 8 percent increase in the northeast region to a 4 percent decline in the southwest region,

— the changes in the value of nonirrigated crop land varied from an 8 percent increase in the northwest region to no change in value in the southwest region,

— the changes in the value of improved pasture land varied from 7 percent in the northeast region to no change in the southwest region,

— the changes in the values of unimproved pasture land varied from 3 percent in the northwest region to less than 1 percent in the central region.

The 221 respondents to the survey — who included property appraisers, lenders, real estate brokers, farm managers, land investors, Cooperative Extension Service agents and federal farm-assistance staff — were asked to estimate values as of May 1, so their estimates did not take into consideration any potential effect of this summer’s drought.

“Normally, one bad year will not have a large impact on values,” Reynolds said. “However, if the failed crops in the Panhandle and North Florida lead to a lot of foreclosures and an excess number of farm properties on the market, values could drop.”

-30-

0