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John E. Reynolds and Susan Moss* *John E. Reynolds is a Professor, and Susan Moss is a Coordinator of Economic Analysis in the Food and Resource Economics Department. The Florida Land Value Survey, conducted by the Food and Resource Economics Department at the University of Florida, provides estimates of the value of different types of agricultural land for geographic regions of the state. The survey questionnaire was designed to obtain estimates of the market value for different types of land as of May 1998. Survey respondents included rural appraisers, farm lenders, real estate brokers, farm managers, land investors, county extension agents, Farm Services Agency and Natural Resource and Conservation Service personnel, county property appraisers and other persons who develop and maintain information about rural land values in their areas. Respondents provided a total of 221 usable county reports for the 1998 survey. The state was divided, based on agricultural production, into four major regions (Northwest, Northeast, Central and South) (figure 1). A fifth region (Southeast) was delineated as a result of the impact of urbanization in southeast Florida and was only used in valuing transition land. Even though the state was divided into more homogeneous regions, wide variation in agricultural land values still exists within each region. Changes by Type of Land Use The largest changes in agricultural land values occurred in grapefruit groves (declines of 21 to 25 percent). Irrigated cropland values declined about 4 percent while non-irrigated cropland and pastureland values remained unchanged in the southern regions. Cropland and pastureland values increased 2 to 8 percent in the northern regions (table 1). Citrus. This is the seventh consecutive year that citrus land values have declined. The value of grapefruit groves declined 25 percent in the South and 21 percent in the Central region. The value of orange groves declined 5.6 percent in the South and 0.2 percent in the Central region. The value of land with 5- to 7-year-old citrus plantings decreased 6.6 percent in the South and 2.1 percent in the Central region. Cropland. The value of irrigated cropland increased 6 to 8 percent in the northern regions but declined about 4 percent in the southern regions. The value of non-irrigated cropland increased 7.6 percent in the Northwest and 1.4 percent in the Northeast. The value of non-irrigated cropland increased 0.4 percent in the Central region and remained unchanged in the South. Pastureland. The value of pastureland increased or remained unchanged in all regions. The value of improved pastureland increased 3 to 7 percent in the Northwest, the Northeast, and the Central regions. The value of unimproved pastureland increased in all regions. It increased about 3 percent in the northern regions and less than 2 percent in the southern regions. Farm Woods. The value of farm woods increased 3.6 percent in the Northwest and 5.1 percent in the Northeast. Regional Comparisons of Land Values The average value of orange groves and land with 5- to 7-year-old citrus plantings was higher in the South than in the Central region. However, the value of non-citrus agricultural land was higher in the Central region than it was in other regions. The average value of orange groves was $6,882 per acre in the South, about $120 per acre higher than it was in the Central region. The estimated value of grapefruit groves was $3,322 per acre in the Central region, almost $300 per acre higher than it was in the South. The average value of land with 5- to 7-year-old citrus plantings was $5,691 per acre in the South, more than $800 per acre higher than it was in the Central region. The value of irrigated cropland ranged from $2,273 per acre in the Central region to $1,234 in the Northwest. The values for the Northeast and South were $2,117 and $1,763 per acre, respectively. The value of non-irrigated cropland and improved pastureland are closely related and were $1,934 and $1,944 per acre, respectively, in the Central region. The values of non-irrigated cropland and improved pastureland for the Northeast were about 86 percent of the Central region's values, and the South's values were about three-fourths of those in the Central region. In the Northwest, the values were about two-thirds of the Northeast region's values. The value of unimproved pastureland was $1,342 per acre in the Northeast and $1,255 per acre in the Central region. The value of unimproved pastureland in the South and Northwest was 70 percent and 66 percent, respectively, of the Northeast value. The lowest agricultural land values were reported in the Northwest. Except for unimproved pastureland, the values of cropland and pastureland were highest in the Central region. Cash Rents The estimated cash rent for non-irrigated cropland was $31.70 per acre in the Northwest and $22.30 per acre in the Northeast (table 2). The estimated cash rent for improved pastureland was $21.60 per acre in the Northwest, $20.10 per acre in the Northeast, $18.00 per acre in the South and about $17.20 per acre in the Central region. Cash rent for unimproved pastureland ranged from $13.90 per acre in the Northwest to $9.40 per acre in the South. Cash rent for non-irrigated cropland was 2.8 percent of the estimated cropland value in the Northwest and only 1.4 percent of the land value in the Northeast. Average improved pastureland rental rates were 2.1 percent of the estimated value of improved pastureland in the Northwest, 1.5 percent in the South, 1.2 percent in the Northeast, and less than I percent in the Central region. Rental rates for unimproved pastureland were 1.6 percent of the estimated land value in the Northwest, 1.0 percent in the South and less than I percent in the Central and Northeast regions. These low rates of return have been consistent for several years, perhaps reflecting the extent to which the nonagricultural demand for land has been capitalized into agricultural land values. Transition Land Transition land is defined as agricultural land that is being converted or is likely to be converted for nonagricultural uses, such as home sites, subdivisions or commercial development. Transition land values were analyzed for metropolitan and non-metropolitan counties. Metropolitan counties (urban or urbanizing areas) are those that are classified as Metropolitan Statistical Areas by the U.S. Office of Management and Budget while non-metropolitan counties are the more rural counties. Transition land values were almost three times higher in the Southeast than they were in other regions; the values for transitional land in metropolitan counties were 2 to 3 times higher than the value of transition land in non-metropolitan counties (table 3). The value of transition land located within five miles of a major town in metropolitan counties ranged from $9,200 to $10,900 per acre, an increase of 7 to 15 percent over 1997. The values of transition land located more than five miles from a major town in metropolitan counties ranged from $4,282 to $6,428 per acre. Transition land values within five miles of a major town in non-metropolitan counties ranged from $3,011 to $4,773 per acre while the range for the values of transition land located more than five miles from a major town was $2,413 to $2,670 per acre. Expected Trends Survey respondents were more optimistic about an improved land market than they had been in recent years. They were asked if they expected agricultural land values to be higher, lower or to remain unchanged during the next 12 months. Seventy-eight percent of the respondents in the northern regions expected agricultural land values to increase in their region while 39 percent of the respondents in the southern regions expected land values to increase (table 4). Respondents in the Northwest expected land values to increase 5.1 percent during the next 12 months, and those in the Northeast expected an increase of 6.5 percent. Agricultural land values in the Central region were expected to increase 3.8 percent, and respondents in the South expected a 2 percent increase in agricultural land values. Use of the Survey Results Care must be exercised when making year-to-year comparisons between surveys for several reasons. First, the group of participating respondents changes from year to year. Second, government rules and regulations affecting water, land use and the environment may change and impact agricultural land values. Finally, with these changes, the results may not be directly comparable with results from previous years. Despite these limitations, this survey has provided estimates of agricultural land values that have been fairly consistent through time. These estimates serve as a guide to the relative value of different land uses within areas and between areas. It is important, however, to emphasize that the value of a specific tract of land may vary substantially from these estimates because of the physical characteristics of the tract, the location of the tract and economic and institutional factors that may affect or restrict its use. Therefore, the value of a specific tract of land should be determined by a professional appraiser. References Reynolds, John E., Susan Moss, and Stephenie Mack. "Northern Land Values Up, Southern Land Values Down: 1997 Survey Results." Florida Food and Resource Economics, No. 137. University of Florida, Gainesville, FL, July-August 1997. Reynolds, John E., . "The Florida Land Value Survey: A Decade of Results." Florida Food and Resource Economics, No. 122. University of Florida, Gainesville, FL, January-February 1995. Address editorial comments or correspondence regarding address or mailing to John E, Reynolds and Michael T. Olexa Editors, 1099 McCarty Hall, Food and Resource Economics Department, University of Florida, Gainesville, Florida32611-0240. Editorial assistance provided by Kim Box. Articles appearing in Florida Food and Resource Economics, may be reproduced, in whole or in part, without special permission. Newspapers, periodicals and other publications are encouraged to reprint articles that would be of interest to their readers. Credit is requested if information is reprinted. This publication was produced at an annual cost of $150.20, or 7.5 cents per copy, to present research results and economic information on Florida food and agricultural industries. |
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