Bill Enns, a central California real estate agent specializing in farmland, takes dozens of calls every week from potential buyers. Most are looking for land on which to grwo nuts.
This summer in Merced County, Enns brokered the sale of 1,200 acres of open ground lacking a good source of water. Listed at $12,500 per acre, the land attracted dozens of buyers and sold within a month for a whopping $15,000 per acre. The buyer will plant it with almond trees, a notably water-intensive crop.
“It was one of the highest sales per acre that we’ve seen for that kind of land,” said Enns, vice president of the Farm Lands Department at Pearson Realty. “We’ve seen some numbers that would just blow your mind.”
The value of the land has increased with the value of nuts, as demand has increased in recent years. Investors, both foreign and domestic, seem to have taken note and moved to get onboard.
The almond industry is the sector that has seen the largest growth, largely on the back of export trade to growing economies, such as China and India.
Revenues for almonds and walnuts increased by 30 percent between 2010 and 2011, and revenues for grapes rose by 20 percent, according to the USDA. California’s agricultural exports during that time grew by more than $3 billion.
In 2011, for the first time, the value of California’s almond crop surpassed the state’s iconic grape industry to move into second place, behind dairy, as the state’s top commodity. Almond producers increased their productivity and their orchard sizes, and shipments more than doubled over the past 10 years, according to the California Almond Board. During the 2011-2012 crop year, California farmers brought in $3.9 billion in revenue.
Real estate experts say farmers and other investors wanting to cash in on that growth quickly cleared the inventories of available nut land. With little else to buy, they ripped out vineyards and other crops to plant almond orchards. Almonds — which grow from Red Bluff to Bakersfield — increased by over 100,000 acres since 2008, to 760,000 total bearing acres today, according to the Almond Board.
Scarcity of available almond land is also pushing some investors to plant trees in areas with a poorer water supply or less appropriate soil.
New investors range from local farmers trying to expand their orchards to international companies seeking high returns on prime almond farmland, experts say. Pension funds, insurance companies and retirement funds also are investing portions of their portfolios into agriculture. Olam International, a Singapore-based commodities supplier, farms 7,000 acres of almonds in California.
In Fresno County, almond land was valued at up to $18,000 per acre in 2012, and pistachio land at up to $25,000 per acre. That’s higher than citrus, grape, or tree fruit land —and much higher than the $7,200 average per acre farm real estate value in California last year, according to the USDA.
Source: washingtonpost.com
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