Farmland values in the central San Joaquin decline in 2016 as crop prices tumble

The value of farmland in the central San Joaquin Valley cooled for some crops as prices for several high-flying commodities softened and access to water remained a concern, according to the Trends in Agricultural Land & Lease Values report released Thursday.

The annual report, prepared by the California chapter of the American Society of Farm Managers and Rural Appraisers, provides a detailed look at the 2016 price of farmland statewide and the factors affecting sales. The report was released at the Outlook 2017 Agribusiness Conference in Fresno.

One of the big stories in the Valley for 2016 was the tumble in the value of nut crops and the corresponding drop in the price for acres planted in almonds. Taking one of the biggest hits was Fresno County, one of the largest growers of almonds in the nation. Nut farm sales declined between 15 percent and 30 percent compared to 2015, when prices topped $42,000 an acre for the best land.

Janie M. Gaztman, of Gatzman Appraisal in Oakdale and one of the authors of the report, said land sales on the westside of the county dropped by a larger margin than those on the eastside, where water supplies were generally more reliable.

“As long as there was good water available, the price was stable,” Gatzman said.

The land values for pistachios didn’t fall as hard as pistachios are more drought and salt tolerant than almond trees. Land values for pistachios ranged from $20,000 to $36,000 an acre.

In 2015 raisin farms were in demand and land prices were strong as farmers and investors were looking for property to develop into more valuable crops. But that didn’t happen as much last year. The value for vineyards declined between 15 percent and 30 percent in Fresno and Madera compared to 2015.

Wine grape acreage in Fresno County hovered between $20,000 to $30,000, down slightly from the previous year. The value of the county’s wine grape vineyards paled in comparison to that of the more prestigious Napa and Sonoma wine regions.

Gatzman said the growing demand for premium wines and the limited properties for sale drove the price of vineyards in Napa to a record $400,000 an acre, and $170,000 acre in Sonoma.

“And it may be going up again,” Gatzman said.

Although the central San Joaquin Valley has long been considered the workhouse of the wine industry, producing more tons per acre than any other region of the state, most of its grapes are funneled into the value wine category.

Also hurting the Valley is the competition from lower priced foreign wines, Gatzman said.

One of the bright spots in the report is the stabilization in the value of tree fruit acreage. The central San Joaquin Valley is the heart of the state’s production of peaches, plums, nectarines and pluots. And while the industry has undergone tremendous consolidation, it also has focused on varieties of fruit that consumers pefer. The report notes that 2016 was profitable for most growers due to strong prices for fruit. The value for tree fruit acreage was between $18,000 to $30,000 an acre and unchanged from the previous year.

This story was originally published March 30, 2017 at 4:13 PM with the headline "Farmland values in the central San Joaquin decline in 2016 as crop prices tumble."