What is in this article?:
- Arizona farmland values and rental rates continue to increase due to higher commodity prices.
- One of the best examples of economic recovery in Arizona agriculture is increasing farmland values in Pinal County.
- Farmland rental rates have increased about 50 percent in Arizona's Maricopa and Pinal counties.
Commodity prices a big player
“2012 is a different year than last year in Maricopa County,” Havranek said. “We are seeing some light at the end of the tunnel. We’re seeing some land move (sell) in the outlying areas. This is such a change from the last couple of years. It’s refreshing.”
“Commodity prices are a big player,” Havranek said. “Cotton prices were strong last year and while they have softened I think we’ll still have a fair amount of cotton acreage this year. Alfalfa hay prices are still strong and will likely remain that way throughout this year.”
He expects Maricopa County farmland land prices to remain steady or increase slightly this year while rental rates, similar to Pinal County, near the 50 percent increase plateau.
“Commodity prices are a big driver in the movement on rents,” Havranek said. “It’s amazing to see how much change (increase) we’ve had in rental rates over the last two years compared to the 10 years prior. Competition is strong.”
In the central Arizona-Central Arizona Project (CAP) irrigation districts, Havranek says rents have increased in the double-price range - from $100 to $150 per acre last year to current levels at $200-plus/acre.
Produce is king in southwestern Arizona’s Yuma County and is a major commodity in California’s neighboring Imperial County. About 95 percent of the U.S. supply of winter vegetables is grown in this region. Most areas on the Yuma side are river valleys with ground suited for produce.
“The demand for farmland for purchase and lease (in Yuma County) is much improved over two years ago,” said Bill Moody, appraiser, Moody and Associates, Yuma. “Buyers are mostly operators investing profits to increase plantings.”
Moody says fresh produce prices were very profitable during the 2010-2011 growing season but fell to near breakeven levels during the just concluded 2011-2012 season.
“This has tempered the bullish attitude that was prevalent in Summer 2011 but attitudes remain positive,” Moody said. “I do not anticipate reduced plantings for the 2012-2013 produce season.”
Yuma County farmland prices and rents on the best vegetable-production ground are trending higher. In the Upper Yuma Valley, land can fetch $23,000 to $30,000 per acre with annual rents in the $600 to $850 per acre range.