SEBRING — Why did the sale prices of 52 Central Florida citrus properties range from $3,000 to $15,000 per acre?
Factors included vacant land, wetlands, lakefronts, building improvements and on-site homes, said the Lay of the Land 2013 Market Report by Dean Saunders, president of Coldwell Banker Commercial Saunders Real Estate in Lakeland.
Another factor, said Raymond McIntyre, Highlands County Property Appraiser: whether groves are in prime spots for housing or commercial development. During the boom years of 2005-2007, the speculative value of every house and every acre in Florida went up, McIntyre said.
However, in 2008, the recession hit in earnest, and all property values fell.
“Most values are back to where we were in ‘03 and ‘04,” McIntyre said Friday.
Conservation easements also affect land values, the new owners of Blue Head Ranch said, and row-crop farms in Hendry County are more valuable because the black, mucky land is richer and packing houses are closer.
The three most significant statewide land sales in 2013 and early 2014 were 379,638 timberland acres in the Panhandle for $562 million, 130,800 acres in several Central Florida counties for $138 million, and Blue Head Ranch in Highlands County for $66 million.
Of the six most significant sales, Blue Head fetched the least per acre: $1,296. The most: $7,474 was paid for a 4,683-acre Hendry County farm.
“It is our opinion that good quality, irrigated farmland located in the Immokalee (Collier County), Palmetto (Manatee County), and Ruskin (Hillsborough County) growing regions will continue to have average market values between $7,000 to $8,000 per farmable acre,” said the Lay of the Land report. “Higher per-acre values would occur ... closer in proximity to the packinghouse facilities located in Immokalee, Palmetto, and Ruskin. They range from $8,000 to 10,000 per farmable acre.”
In the Ruskin region, higher values are paid for less-than-100-acre tracts suitable for strawberries or blueberries.
Citrus land is all about trees: “The size of the sales ranged from 20 to 334 net tree acres,” Saunders said. Net tree acre denotes how many trees there are in every acre.
“The price per net tree acre usually reflects ... actual acreage of planted citrus trees of all ages, including productive and unproductive trees and resets/vacancies.
“Value per net tree acre also reflects ... variety mix, rootstocks, tree age, resets, vacancies, irrigation, drainage, disease pressure, cold/warm location, and future development potential,” Saunders said. “Citrus grove net tree acre conditions may range from mostly dead trees/vacancies to highly productive mature trees capable of 600+ boxes per acre.”
“There is good demand for high-producing groves on the ridge and the interior of Florida,” Saunders said, but abandoned citrus groves still may be valuable. “Marginal, less-productive groves with permits and infrastructure have good demand, especially in historically good locations with irrigations systems and permits in place. Alternative uses for marginal and abandoned grove land include new citrus groves, blueberries, peaches and development.”
Land values for Central Florida’s interior counties — Highlands, Hardee, DeSoto, Highlands, Polk and Okeechobee — range from $4,500 to $6,000 per farmable acre, Saunders said. In 2013, 39 arms-length grove sales were verified along the Lake Wales Ridge. The most productive citrus land produced high prices: per net tree acreage ranged from $5,602 with mostly vacant tree sites and scattered young trees to $17,423 for mature grove producing 500 to more than 600 boxes per acre.
When crop values were included in citrus sales, the range was just $1,713 to $3,425 per net tree acre.
Farmlands owned by investment funds are being reacquired. Those lands were purchased so they could be leased to area growers for a 5 percent return to the investor. However, Saunders said, “Historically, the average rental rate for row-crop farming in Florida does not generate enough income to provide this type of investor with a 5 percent return.”
Tomato prices are influenced by Mexican imports, “which has resulted in a significant number of farmers reducing their planted acreage,” Saunders said. Two more factors: labor, and a suitable substitute for methyl bromide — a soil pesticide that depletes ozone. It was phased out in 2005.
Because berries — which includes tomatoes — are perishable, the nearness to a packing house is crucial, said Ray Royce, executive director of the Highlands County Citrus Growers Association.
When Blue Head started growing strawberries and blueberries, the former owners built their own chilling house, Royce said. Citrus is less perishable, so sending grapefruit, tangerines and oranges to Polk County doesn’t affect land prices, he said.
Highlands County doesn’t have much of the black, mucky soil which is better suited to row crops, but crops are diversifying nevertheless, Royce said. Cabbage is grown here, along with watermelons and sand sugar cane.
“We’ve talking about this with some of the economic development folks. It would it make sense to have cooler facility at the airport. If you were a small (fruit farmer) guy, you would have a place to take your stuff too.”
The Nature Conservancy and the Department of Defense purchased two Highlands County easements at just over $1,550 per acre to buffer military installations from development. These easements are less restrictive than the Wetlands Reserve Program; consequently, the payments are smaller, Saunders said.
The U.S. Fish Wildlife is purchasing easements for the Everglades Headwater Project in Highlands, Polk, Osceola and Okeechobee counties, but none in 2013, Saunders reported. However, he’s heard the president is requesting $5 million in funding for one easement in 2014.
How much is Central Florida citrus land worth?
The formula includes two factors: boxes per acre of citrus produced per net tree acre.
• 50 to 175 boxes, from $5,602 to $8,300
• 200 to 313 boxes, from $6,395 to $14,091
• 375 to 425 boxes, from $9,374 to $15,214
• 500 to 600+ boxes, from $15,475 to $17,423
Source: Land of the Land 2013 Market Report, Coldwell Banker Commercial Saunders Real Estate