New UF/IFAS study shows double-digit increases for most Florida farmland values

April 4, 2005

GAINESVILLE, Fla. — The value of agricultural land continued to increase in all areas of the state last year, buoyed by a population boom and strong nonagricultural demand for land, according to a new University of Florida survey.

“Following recent trends, the market for agricultural land was very active this past year, and the rate of increase in land values was particularly high in the southern regions of the state,” said John Reynolds, a professor emeritus with UF’s Institute of Food and Agricultural Sciences. “In most land-value categories, we recorded double-digit increases.”

He said the most prominent changes occurred in South Florida where the value of cropland increased by 58 percent and pastureland values jumped by 76 percent. The largest increases were in the Indian River area, Okeechobee County and the Gulf Coast counties.

Cropland and pastureland in other regions also experienced substantial increases: 19 to 25 percent in the central region of the state, 10 to 19 percent in the northwest region and 9 to 15 percent in the northeast region.

Although citrus groves did not increase in value as much as cropland and pasture, the value of orange groves in the south region increased by 10 percent and 12 percent in the central region. The value of grapefruit groves increased 34 percent in the south region and 15 percent in the central region. The value of land with 5- to 7-year-old citrus plantings increased about 9 percent in the south and central regions.

The average value of orange groves in the south region was $6,540 per acre, about $130 per acre higher than in the central region. The estimated value of grapefruit groves increased to $5,264 per acre in the south region, about $746 per acre higher than in the central region. The average value of land with 5- to 7-year-old citrus groves was $5,920 per acre in the south region, about $580 per acre higher than in the central region.

Reynolds’ 2004 land value survey, which measures changes over the past year, divides the state into five regions: south, southeast, central, northeast and northwest. Because of the impact urbanization has on agricultural land values, Reynolds collects data for the southeast region, including Miami-Dade, Broward and Palm Beach counties.

He also measures the value of transition land – acreage being converted or likely to be converted to nonagricultural sites for homes, subdivisions and commercial uses. Counties were divided into metropolitan and non-metropolitan counties, and transition land values were estimated for each region.

The value of transition land within five miles of a major town in metropolitan counties increased by 7 to 13 percent in northern regions of the state and by 6 to 52 percent in southern regions. In dollar amounts, the value of transition land in metro counties ranged from $14,082 to $24,983 per acre, except in the southeast region of the state where transition land values were $62,500 per acre.

The value of transition land more than five miles from a major town in metro counties ranged from $7,950 to $14,352 per acre, except in the southeast where the value was $36,250 per acre.

In non-metro counties, the value of transition land within five miles of a major town ranged from $4,793 to $6,778 per acre. Transition land more than five miles from a major town ranged from $3,921 to $5,446 per acre.

For the 2004 study, six counties were reclassified. Reynolds said the changes in the northwest include moving Jefferson and Wakulla counties into the Tallahassee metropolitan statistical area (MSA), which is a federal designation for urban or urbanizing areas. In the northeast region, Gilchrist County was moved into the Gainesville MSA, and Flagler County was removed from adjacent MSA counties. In the southern region, Indian River County was designated as the Vero Beach MSA.

“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 survey measured land values up to May 2004, and it does not include any changes in land values that may have occurred after last year’s hurricane season.”

The 2004 Florida Agricultural Land Value Survey also shows:

Last year, the value of cropland and pastureland in the south region increased from $1,100 to $1,400 per acre. The value of improved pasture was higher in the central region than in other regions. The lowest agricultural land values were reported in the northwest region, ranging from $1,450 per acre for unimproved pasture to $2,193 per acre for irrigated cropland.
The value of irrigated cropland was $3,901 per acre in the south region, $3,709 in the central region, and $3,428 in the northeast region. The value of non-irrigated cropland was $3,237 in the central region, $2,657 in the northeast region and $1,983 in the northwest region.
The value of improved pasture ranged from $3,608 per acre in the central region to $1,783 per acre in the northwest region. The value of unimproved pasture ranged from $2,605 per acre in the south region to $1,451 in the northwest region.
The value of farm woods increased by 18 percent in the northwest region of the state and by 16 percent in the northeast region.
Survey respondents were asked if they expect agricultural land values to be higher, lower or remain unchanged during the next 12 months. Eighty-five percent of the respondents in northern areas and 67 percent of the respondents in south region expect land values to increase during the next year. Only 2 percent expect lower land values during the next 12 months. Respondents in the southeast region said that they expect land values to increase by 30 percent, primarily because of strong urban demands.
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/IFAS extension agents, and others who develop and maintain information about rural land values.

More details on the survey, Nonagricultural Demand Causes Agricultural Land Values to Increase (FE 545), are available on the UF/IFAS Electronic Data Information Source (EDIS) at http://edis.ifas.ufl.edu/.