What is in this article?:
- Record cotton prices are bringing multiple bidders with significantly higher price offers for some farmland leases in Maricopa County, Ariz.
- Higher commodity prices are generating more farmland purchases in Yuma County by local farm operators and lessees.
- Mature tree nut orchards in Cochise County are commanding $15,000 per acre sales.
- The 2011 Arizona dairy forecast is mixed with higher milk prices and feed costs.
Land values in general in Pinal County located south of Phoenix dropped significantly during the Great Recession as the new housing market imploded. Farmland values sank like the Titanic.
"Pinal County farm land values in general dropped 65 to 70 percent for 40 acre and larger parcels from $33,000/acre in 2006 to about $9,700/acre in 2009," said Steve Pendleton of Southwest Agricultural Services in Mesa, Ariz.
In 2010, signs suggested farm land values were stronger with average ground worth about $12,000/acre.
"Some of the bright signs we are seeing include higher numbers of land sales in 2010 over 2009," Pendleton said. "We are basically stable from the 2009 sales price volume. That's a positive."
Pendleton says price recovery generally begins with an increase in sale transactions followed by some expected downward price pressure and price settling.
“If we can get the number of transactions up and continue to stabilize then hopefully we’ll start coming out of this dive.”
Farmland rental rates have increased slightly; from $100 to $125 per acre on average up to $150 per acre.
Farmland prices and rental rates are “stable, stable, stable” in southeastern Arizona, says Mark Finley of Finley Appraisal Services, Willcox, Ariz.
“With (high) cotton prices I don’t think anybody will sell (land),” Finley said.
Some high-dollar sales are occurring in portions of Cochise County for pecan and pistachio acreage.
“We had several high dollar pecan sales with mature pecan acreage selling at about $15,000 per acre; that’s Las Cruces, N.M. (pecan acreage) prices,” Finley stated. “These are good orchards with 2,400-pound per acre production with mature trees and a good watering system. That’s the top of the market.”
Most Cochise County farmland is valued at about $3,000. Finley predicts more cotton acreage this year with good alfalfa ground remaining in alfalfa production.
Rental rates for center pivot-irrigated ground are holding steady at $100 to $125 per acre. Demand is good for rental ground.