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.
One of the best examples of the economic recovery underway in Arizona agriculture since the onset of the Great Recession is increasing farmland values in Pinal County, located in the state’s south central area.
Pinal County was one of Arizona’s hardest economically hit counties during the recession. Arizona was the second fastest-growing state in the nation behind Nevada prior to the nation’s economic meltdown.
The recession in part led to a whopping depreciation in Pinal County farmland values of 80 percent to 90 percent range on average.
“There were farmland sales in Pinal County’s south Eloy area priced at over $20,000 per acre during the boom, while the sales at the bottom were in the $2,000 to $3,000 range,” says Steve Pendleton, appraiser and broker with Southwest Ag Services based in Mesa, Ariz.
“Prices appear to have picked up in the last year with most farms bringing $4,000 to $5,000 per acre without any significant location premium.”
The economic turnaround in Pinal is slow. Price gains in agriculture are mostly led by higher commodity prices with some benefit from overall economic recovery. The Pinal County towns of Maricopa and Casa Grande are often viewed as bedroom communities for Phoenix, located 30 to 60 minutes travel time to the north.
The rest of the county is strongly based in agriculture with a farm crop mix including cotton, alfalfa, melons, barley, and wheat; plus dairy and beef cow operations.
“The bright spot in Pinal County today is farmland,” Pendleton said. “Significant appreciation in farmland prices began in late 2010 — especially in the true farming market areas.”
Pendleton spoke at the 2012 American Society of Farm Managers and Rural Appraisers (ASFMRA) Arizona Chapter’s Spring Ag Forum in Tempe.
Boosted commodity prices have also sparked sharp increases in Pinal County’s farmland rental rates.
“In general, 2011-2012 rents were up about 50 percent from 2010 and earlier,” Pendleton said. “Increased rents are widespread covering most of the farming areas in the county as long as water is availability.”
Pendleton and other speakers at this year’s ASFMRA Spring Ag Forum were all bullish about the growth in farmland values across Arizona’s $10.3 billion-based agricultural industry.
“These factors should play out for a cautiously optimistic and profitable 2012 in Arizona crop production,” said Shawn Wood, broker and appraiser with Headquarters West in Phoenix, and the Arizona ASFMRA chapter president.
Southwest Land Advisors broker-appraiser Charles Havranek of Goodyear, Ariz., shared optimism for farmland values in Maricopa County — the largest county in the nation — where its 3.5 million residents (Greater Phoenix area) are surrounded by agriculture.