By:
Chuck Woods (352) 392-1773 ext 281

Source(s):
John Reynolds Reynolds@fred.ifas.ufl.edu, 352-392-1845 ext.412
Julie Young Julie@armfield-wagner.com, 772-562-0532

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GAINESVILLE, Fla.—The value of agricultural land in all regions of the state increased during the past year, ending the double-digit drop in prices for orange and grapefruit groves in two previous years, according to a new University of Florida survey.

“The jump in values across the state can be attributed to the continued strong demand for farmland by developers, speculators, government agencies, as well as those who want land for homes and recreation away from urban areas,” said John Reynolds, a professor with UF’s Institute of Food and Agricultural Sciences.

The strong demand for farmland also has been buoyed by low interest rates and Florida’s ever-growing population, he said.

The value of transition land acreage being converted or likely to be converted to nonagricultural uses as sites for homes, subdivisions and commercial uses increased by as much as 29 percent near big cities, Reynolds said.

Reynolds’ 2003 agricultural land value survey, which measures changes over the past year, divides the state into four regions: south, central, northeast and northwest. He also collects data for Southeast Florida Miami-Dade, Broward and Palm Beach counties because of the impact urbanization has on agricultural land values in the region.

The survey showed the value of cropland increased from 5 percent to 11 percent, and the value of improved and unimproved pastureland increased from 7 percent to 16 percent. The value of farm woods increased 7 percent to 10 percent.

“After two back-to-back years of declining grove values in our 200l and 2002 surveys when the total drop exceeded 20 percent the value of orange and grapefruit groves increased in Central Florida and South Florida during the past year,” Reynolds said. “And the average value of citrus land continues to be higher in the south region than in the central region.”

In the south region, the value of orange groves increased 4.3 percent, grapefruit groves increased 7.4 percent and land with 5- to 7-year-old citrus plantings increased 4.4 percent. In the central region, the value of orange groves increased 5.2 percent, grapefruit groves increased 8.3 percent and land with 5- to 7-year-old citrus plantings increased 4.7 percent.

The average value of orange groves in the south region was $5,932 per acre, about $200 higher than in the central region. The estimated value of grapefruit groves was $3,929 per acre in the south region, about $15 higher than in the central region. And the value of land with 5- to 7-year-old citrus groves was $5,440 per acre in the south region, about $551 higher than in the central region.

The annual food and resource economics department survey, which Reynolds started in 1985, was compiled from information provided by 190 respondents from around the state. Respondents included property appraisers, farm lenders, real estate brokers, farm managers, land investors, federal farm-assistance and conservation staff, UF extension agents, and others who develop and maintain information about rural land values.

“For the fourth year in a row, the value of transition land was more than three times higher in the southeast region than in other regions,” Reynolds said. “And the values for transitional land in metropolitan counties in other regions of the state were two to three times as high as the value of transition land in nonmetropolitan counties.”

He said the value of transition land within five miles of a major town in metropolitan counties increased 12 to 13 percent in the northern areas and 13 to 18 percent in southern areas. The value of transition land within five miles of a major town ranged from $13,167 to $16,392 per acre, except in the southeast region where transition land values were $58,813 per acre.

The value of transition land more than five miles from a major town in metropolitan counties ranged from $7,000 to $10,388 per acre, except in the southeast region where transition land values were $31,786 per acre. The value of transition land within five miles of a major town in nonmetropolitan counties ranged from $4,312 to $6,500 per acre. Transition land more than five miles from a major town in nonmetropolitan counties ranged from $3,475 to $4,375 per acre.

“It is important to emphasize that the value of a specific tract of land may vary substantially from the survey estimates because of the physical characteristics of the tract, its location and the economic or institutional factors that restrict its use,” Reynolds said.

The 2003 Florida Agricultural Land Value Survey also shows:

• The value of irrigated cropland increased 7 percent in the central and south regions and 9 percent to 10 percent in the northwest and northeast regions. The value of nonirrigated cropland increased from 10.9 percent in the northwest region to 5.2 percent in the central region. The value of nonirrigated cropland increased about 9 percent in the northeast and south regions.
• The value of improved pastureland increased 9 percent to 15 percent in the southern areas and 7 percent to 9 percent in the northern areas. The value of unimproved pasture increased 16 percent in the south region, 11 percent to 14 percent in the northwest and central regions, and 7 percent in the northeast region. The large increases in pastureland values in the south region occurred mainly in coastal counties.
• The value of farm woods increased 9.7 percent in the northwest region and 7 percent in the northeast region.
• The lowest agricultural land values were in the northwest region.
• About two-thirds of the survey respondents expect agricultural land values to increase during the next year. Only 2 percent of respondents in northern areas and 3 percent in southern areas expected lower land values during the next year. Average land values are expected to increase from 4 percent to 7 percent across the state, except in the southeast region where values are expected to increase by 9.8 percent, which is the largest increase of all regions because of urban demand.
• Agricultural land values are expected to increase 3.6 percent in the northwest region and 3.9 percent in the northeast region. Respondents expect values will increase 4.9 percent in the central region and 6.6 percent in the south region.

Julie Young, an agricultural appraiser with Armfield-Wagner in Vero Beach, said the factors affecting land values include: desire to invest where there is a perceived lower risk and potential for adequate returns, available finances in the form of low mortgage rates, loss of available land due to urban development and governmental purchases, and market acknowledgement of the shrinking supply.

“The coastal counties are experiencing very high demand for development, with all sectors sustaining significant value increases,” Young said. “Rural fringe areas, where agricultural uses have predominated over the past 75 years, are converting to rural residential acreage homesites or large-scale subdivisions.

“Productive citrus land has realized moderate appreciation, but values will continue to fluctuate with production and income potential,” she said “Fringe urban areas are rapidly converting to residential uses, creating vast areas of low-density urban sprawl and new communities.”

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