SOUTH FLORIDA – May 13, 2008 – The value of agricultural land in South Florida, which includes Polk County, rose as much as 48 percent in 2007 compared to a year earlier, while prices for citrus groves show estimated increases of up to 64 percent over a two-year period. Farm land values in North Florida were more volatile, falling as much as 13.8 percent for some properties while increasing 20 percent for others.

Those findings came from the annual land value survey released recently by the University of Florida’s Institute of Food and Agricultural Sciences. The statewide survey of 127 people, including appraisers, lenders, real estate brokers and county extension agents, was conducted in October for land values in May 2007.

The survey was substantially revised in 2006 after Rodney Clouser, a professor of food and resource economics, took over. The most significant change was dividing the state into two sections instead of the four or five divisions used previously.

That means comparisons between land values in the latest survey and those for 2005 and earlier are not statistically precise.

South Florida takes in Citrus, Marion, Volusia and all counties to the south. North Florida includes Alachua, Flagler, Levy, Putnam and counties to the Georgia-Alabama border.

No land categories in South Florida decreased in value in 2007. The biggest change came for irrigated crop land, which includes all crops but citrus, which rose to $10,432 per acre, up 48 percent from $7,036 in 2006.

Unimproved pasture land in South Florida rose 44.8 percent to $7,752 while improved pasture land rose 31 percent to $9,025.

Citrus groves in South Florida had the highest values, the survey showed. A mature orange grove was worth $16,123 per acre, a mature grapefruit grove $11,183 and a young, commercially productive citrus grove (5 to 7 years old) $11,900 an acre.

No comparisons with 2006 citrus values were reported because the previous survey did not get enough responses to gauge citrus land.

Compared with citrus values in the 2005 survey, mature oranges rose 64 percent over the two-year period, mature grapefruit jumped 36.5 percent, and the value of new citrus groves increased 40.6 percent.

In that survey, Central Florida included the area from Hillsborough, Polk and Osceola counties to the south and Citrus, Marion and Volusia to the north – about half the South Florida area in the new survey. But Clouser said the two-year comparison is a rough estimate of the trend in citrus land values.

Typically agricultural lands draw a significant amount of their value from the income produced by crops grown on it. The record high farm prices for oranges in the 2006-07 season would appear to be a factor in the higher prices for citrus groves last year.

“My best guess is that it probably made citrus land values look a little higher in 2007,” Clouser said.

But other factors played a greater role in setting prices for all agricultural land last year, he added.

“Land sales experts continue to indicate that increases in the value of Florida agricultural lands were primarily due to a strong nonagricultural demand for land and that farmland ownership was investment-based, not income-based,” the report said.

The report also noted the Florida real estate market had changed significantly since May 2007 and that more than 80 percent of survey respondents expected values to remain flat or decline in 2008.

Ron Muraro, an economist at the Citrus Research and Education Center in Lake Alfred who co-authored the report, agreed many factors may lead to a slowdown or decline in land values. They include a slowdown in large housing developments, the general downturn in the state’s housing marketing, a decline in speculative buying and difficulty in financing real estate deals in the wake of the subprime mortgage problem.

But Clouser told The Ledger on Thursday that speculators have not completely left the Florida real estate market.

Clouser said he regularly gets calls from prospective out-of-state buyers interested in buying agricultural land today for development 10 to 15 years later. Many calls have come from investors looking for new lands to produce crops for the burgeoning biofuels industry.

Copyright © 2008 The Ledger, Lakeland, Fla., Kevin Bouffard. Distributed by McClatchy-Tribune Information Services.

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