Value Of Some Agricultural Land In Florida Continues To Decline
GAINESVILLE—For the seventh consecutive year, the market value of Florida’s citrus lands has declined as a growing population and foreign agricultural competition continued to take their toll, according to a recent statewide survey conducted at the University of Florida’s Institute of Food and Agricultural Sciences.
Overall agricultural land values declined in South Florida in the past year, continuing a downward trend since 1990, but increased in northern areas. Land values have risen since 1992 in the northwest and since 1993 in the northeast, said John Reynolds, UF/IFAS professor of natural resources.
The largest decline in agricultural land value occurred in grapefruit groves, which dropped 19 percent in South Florida and 15 percent in the central area of the state, according to the 1997 Florida Land Value Survey by the department of food and resource economics at UF/IFAS. The value of orange groves declined more than 2 percent in the south and remained unchanged in the central region. The average value of orange groves in the south was $7,290 per acre, more than $500 per acre higher than the value reported for the central region.
“Agricultural land values in the central and southern parts of the state have declined because they reflect the agricultural income potential from the land,” Reynolds said. “Faced with record levels of citrus production and low vegetable prices, participants in the land market are pessimistic and expect land values to decline further in the south.”
In the northern areas of the state, agricultural land values have followed an upward trend like most of the rest of the country, as the income potential for grain producers remains reasonably good, Reynolds said.
Even with the increase, the lowest reported agricultural land values were in Northwest Florida, even though the value of farm woods increased about 10 percent in the northwest and 2 percent in the northeast. The market values of cropland and pastureland, which were highest in Central Florida, increased 5 to 9 percent in the northern regions but declined between 3 and 5 percent in the south.
Julianna Young, an accredited rural appraiser with Armfield-Wagner Appraisal and Research in Vero Beach, said offshore competition continues to affect Florida’s cropland. No large-scale growth in production is expected, she said, because the state has a competitive disadvantage in vegetable production with foreign countries under current trade agreements.
“Also over the past year, the demand for agricultural lands in transitional locations close to urban development has increased,” Young said. “The state’s continued economic growth is expected to increase demand for residential conversion from agricultural land, especially in coastal counties.”
The value of transition land — acreage being converted to nonagricultural use — increased in most areas of Florida, particularly in the southeast. During the past year, the value of transition land within five miles of a major town increased by about 14 percent in the northern regions, while changes in the southern regions ranged from a decline of 5.9 percent to an increase of 8.9 percent.
A survey questionnaire was designed to provide estimates of the market value of the different types of agricultural land in Florida for May 1997. More than 190 people responded to the survey, including rural land appraisers, farm lenders, real estate brokers, farm managers, land investors, county extension agents and others who maintain information about rural land values in their area.
Young, who has evaluated the survey’s trends in southeast Florida since 1988, said the citrus industry remains in transition in response to increased production and the limited marketing power of growers. Increasing orange production, both domestically and internationally, is expected to lower both income and orange grove values during the next several years.
“Grapefruit production continues to increase, with pressure to abandon older groves with limited or declining production,” Young said. “The value of these older groves will remain very low and have limited market demand. Values for young grapefruit groves should improve over the mid-term, but may depend on the number of older groves that are abandoned.”
Young said overall production from grapefruit is expected to level off or decline in the future as limited income returns force farmers to abandon more groves, but it takes several years for that lost production to show up in state totals. Expansion into foreign markets could alleviate over-production problems, Young said, “but trade agreements are very slow to reach fruition, and no quick turnaround is expected.”