Here Edwards, Lien & Toso, Inc

2018 Trends®|IN AGRICULTURAL LAND & LEASE VALUES

2018 COORDINATING TEAM 2018 Trends® Coordinating Team...... 1 Janie Gatzman, ARA About ASFMRA...... 2 Gatzman Appraisal — Oakdale, CA California Chapter, ASFMRA...... 2 Tiffany Holmes, ARA Mission of the California Chapter...... 2 Edward, Lien & Toso, Inc. — Hilmar, CA Friends of the Chapter...... 2 Liz McAfee Message from the President...... 3 It’s Liz! A Design Studio — Fresno, CA Chapter Board of Directors...... 3 ® Suzie Roget 2018 Trends Sponsors...... 4 California Chapter, ASFMRA Photographers...... 4 Woodbridge CA Disclaimer/Copyright...... 4 Message from the Trends® Co-Chairs...... 5 ARTICLE 2017: A Strange Year ...... 7 2018 REGION CHAIRS REGION ONE REGION ONE Sacramento Valley...... 13 Kyle Dalrymple Land and Lease Values...... 19 Edwards, Lien & Toso, Inc. — Gridley CA Historical Value Range per Acre...... 20 REGION TWO REGION TWO Hal Forcey, ARA North Coast...... 23 Forcey Appraisal — Santa Rosa CA Land and Lease Values...... 31 Historical Value Range per Acre...... 32 REGION THREE REGION THREE Kary Griffith Northern San Joaquin Valley...... 35 Yosemite Farm Credit — Modesto CA Land and Lease Values...... 43 REGION FOUR Historical Value Range per Acre...... 44 Jaime Bigham, ARA REGION FOUR Fresno-Madera Farm Credit — Fresno CA Central San Joaquin Valley...... 51 Kristin Massetti, ARA Land and Lease Values...... 59 Correira-Xavier, Inc. — Fresno CA Historical Value Range per Acre...... 60

REGION FIVE REGION FIVE Southern San Joaquin Valley...... 67 Michael Ming, ARA, FRICS Alliance Appraisal, LLC — Bakersfield CA Land and Lease Values...... 73 Historical Value Range per Acre...... 74 REGION SIX REGION SIX Allison Renz Clark, ARA Central Coast...... 79 American AgCredit — Salinas CA Land and Lease Values...... 87 Historical Value Range per Acre...... 88 REGION SEVEN Curtis A. Buono, ARA, MAI, AI-GRS REGION SEVEN Cushman & Wakefield — San Diego CA Southern California...... 91 Land and Lease Values...... 95 REGION EIGHT Historical Value Range per Acre...... 96 Michael F. Merkley, ARA REGION EIGHT American AgCredit — Fallon NV Mountains...... 99 Land and Lease Values...... 103 REGION NINE Historical Value Range per Acre...... 104 David K. Bell, ARA American AgCredit — Reno NV REGION NINE Nevada...... 107 Land and Lease Values...... 109 Historical Value Range per Acre...... 110

Glossary...... 113

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 1 About|ASFMRA California Chapter|ASFMRA

The American Society of Farm Managers and Rural Appraisers® The California Chapter of the American Society of Farm (ASFMRA®) is the largest professional society for rural Managers and Rural Appraisers was chartered in 1949 property land experts in the United States. ASFMRA repre- as an affiliate of the national organization. It is a non- sents The Most Trusted Rural Property Professionals and is the profit mutual benefit corporation under California law and organization for individuals who provide management, con- supports the educational, ethical and professional standards sultation, and valuation services, as well as real estate services of ASFMRA. The California Chapter is the second largest on rural and agricultural assets. The land experts who hold ASFMRA Chapter in the country and prides itself on being an membership in ASFMRA work under a professional code of innovator in education for Western Ag Professionals. Through ethics, which includes continuing education requirements. the annual Trends® in Agricultural Land & Lease Values You can rest assured that if you are working with someone publication, Spring Outlook Agribusiness Conference, Fall who is an accredited member of the Society, you are truly Meeting, FARMit® Education Program, California Water & working with a competent land expert and agricultural pro- Irrigation District Maps and numerous classes and seminars, fessional who can assist you with all of your land asset needs. the Chapter is a trusted and reliable resource for agribusi- ASFMRA, founded in 1929, provides members with the ness in the west. The members of the California Chapter are resources, information, and leadership that enable them to dedicated to their profession and are relied upon as being the provide valuable services to the agricultural community. best in the business. The focus of ASFMRA is providing education, accreditation Mission of the California Chapter, ASFMRA Empowering and networking opportunities for members who offer farm agricultural property professionals with education and and ranch management, rural and real property appraising, expertise to provide premier valuation, management and con- review appraisal, and agricultural consulting services to sulting services. the private and public sectors and to the governmental and lending communities. Friends of the Chapter The California Chapter, ASFMRA provides an important link for professionals through an affiliate membership category – Friends of the Chapter. Accredited Designations|ASFMRA Friends is intended for those individuals who do not qualify for membership in the ASFMRA as a rural appraiser, review appraiser, farm manager or agricultural consultant but wish AAC Accredited Agricultural Consultant to be affiliated with the California organization. AFM Accredited Farm Manager ARA Accredited Rural Appraiser For more information on membership or Chapter RPRA Real Property Review Appraiser activities, please call (209) 368-3672 or email [email protected]

2018 Trends® in Agricultural Land & Lease Values |PUBLISHED BY

California Chapter of the American Society of Farm Managers and Rural Appraisers, Inc. (ASFMRA) P.O. Box 838 Woodbridge CA 95258 (209) 368-3672 www.calasfmra.com [email protected]

2 2018 TRENDS® in Agricultural Land & Lease Values Message from the|PRESIDENT California Chapter|BOARD of DIRECTORS

The California Chapter of the American Society of Farm Managers and Rural Appraisers once again PRESIDENT presents Trends® in Agricultural Land and Lease Values. Over the years, Trends® has become the ubiq- Dan Whisenhunt, AAC, MBA uitous reference guide for investors, farm managers, Agcom, LLC/Dan Whisenhunt Consulting agricultural consultants, valuation professionals, Turlock CA lenders and other agricultural professionals looking for land and lease values. Since its inception in PRESIDENT-ELECT 1991, the publication’s growth has been unabated JoAnn C. Wall, ARA and value-added for the reader, serving an ever- Above & Beyond Real Estate Services, Inc. widening audience, both professionally and Templeton CA geographically. We are very fortunate to possess the resources within the California Chapter to continue to compile and present this valuable information, making it available to agriculturalists throughout the country. FIRST VICE PRESIDENT The Trends® publication and the Outlook Agribusiness Conference could Martin Seanez, ARA not happen without the commitment and hard work of many people. There Edwards, Lien & Toso, Inc. Fresno CA are numerous professionals who selflessly donate their time and resources to make this event and publication valuable to the agriculture industry. We also need to recognize those who came before us; whose vision and dedication SECOND VICE PRESIDENT made Trends® and the Outlook Conference the successes that they are. James R. Pisani, ARA We extend a special thank you to the Co-Chairs of the Trends® publication Farm Credit West committee, Janie Gatzman, ARA and Tiffany Holmes, ARA for their countless Woodland CA hours, and to the regional chairs and committee members who have dedicated their time and resources to compile and present the Trends® information from SECOND YEAR BOARD MEMBER their respective areas. We would also like to thank Liz McAfee, our publica- Kenneth K. Peters, AFM ® tion graphic designer, whose talents are an integral part Trends ’s success. Capital Agricultural Property Services, Inc. And last but certainly not least, to Suzie Roget, the chapter’s Executive Fresno CA Vice President, who coordinates the many aspects of both Trends® and the Outlook Conference. FIRST YEAR BOARD MEMBER Thanks also go out to our sponsors. Trends® would not be possible without the support of the businesses and individuals who provide financial assistance Michael F. Merkley, ARA through their purchase of sponsored ad space. It is through this support that American AgCredit we can continue to provide a high-level, professional product like Trends®. Fallon NV Please take note of them as you read through the pages of the publication and make an effort to support them with your business when opportunities arise. SECRETARY/TREASURER The Trends® publication is an example of the chapter’s professionalism and Peter M. Holmes, Jr., AAC abilities to serve the agricultural community, as well as our commitment to Valley Ag Loans, Inc. providing unmatched valuation, management and consulting services. Our Woodland CA numerous educational offerings available to the agribusiness community are also unparalleled. If you are interested in becoming one of California’s most recognizable agriculture professionals, or if you would like to know more about what the California Chapter and the professional designations of the ASFMRA can do for you and your business, please accept my personal invitation to visit our website at www.calasfmra.com, or speak to one of our members. They will be happy to give you their testimonial and introduce you to others who have also benefited from membership in the Chapter. We trust you will find this issue of Trends® valuable. Kindly tell your friends and colleagues about this resource. Additional copies of Trends® are available in both print and electronic formats from the California Chapter website (www.calasfmra.com) or through Suzie Roget at our Chapter office. She can be reached at (209) 368-3672, or by email at [email protected]. Dan Whisenhunt, AAC, MBA President of the California Chapter ASFMRA

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 3 2018 Trends®|SPONSORS 2018|PHOTOGRAPHY

Advanced Ag Realty & Appraisal...... 58 Hopper Company...... 72 We would like to thank the photogra- Ag Land Consultants Inc...... 46 Houk & Hornburg, Inc...... 76 phers who submitted their photos for our Ag Lenders Society of California...... 34 House Agricultural Consultants...... 22 2018 Trends® publication. AgIS Capital...... 16 Institute for Food and Agriculture...... 65 Matthew Burlile AG-LAND Investment Brokers...... 18 Integra Realty Resources...... 16 temeculavalleywineries.com — Temecula, CA AgriBusiness Financial, Inc...... 49, 64, 73 Intero Real Estate Services...... 14, 22 Kyle Dalrymple AgriBusiness Investment Group...... 54 James G. Palmer Appraisals Inc...... 65 Edwards, Lien and Toso, Inc. — Gridley, CA Agri-Comm Appraisal, LLC...... 34 Kefa Capital, Inc...... 48, 63, 72, 82 Agriculture and Business Professionals, Inc...... 22 Lynn E. Rickard, ARA...... 72 Ken Dodderer Fresno First Bank — Fresno, CA Alliance Ag Services, LLC/ M. Green and Company LLC CPAs...... 76 Alliance Appraisal, LLC...... 77 MacLane & Company, Inc...... 25 iStockphoto.com AQUAOSO Technologies, PBC...... 5 Madi K’s...... 37 Shutterstock.com Arthur C. Bliss, Jr. (Arthur Bliss Ranch)...... 84 Manuel Ortiz Real Estate...... 72 Please contact the California Chapter, Atkinson Consulting Services, LLC...... 77 Merrill Real Estate & Ag Consulting...... 59 ASFMRA if you are interested in AXA Equitable AgriFinance-Al Connor.....34, 106 Merriman Hurst & Associates Inc...... 76 submitting photographs for the 2019 Baker Peterson & Franklin CPA LLP...... 54 MetLife...... 53 publication: [email protected] Bank of Stockton...... 40 Monte Vista Farming Company...... 39 Bender Rosenthal, Inc...... 22 Murphy Austin Adams Schoenfeld LLP...... 18 Bergthold Ag Services...... 16 Murray Wise Associates...... 58 Bolen Fransen Sawyers, LLP...... 64 Natural Resources Group, Inc...... 64 | Brigantino and Company...... 86 NorCal Chapter of the ASA...... 37 DISCLAIMER COPYRIGHT California FarmLink...... 19 Pacific Gold Agriculture...... 70 California Outdoor Properties, Inc. Pacific SouthWest Irrigation ...... 43 Disclaimer ...... 22, 29, 46, 65, 70, 90, 95, 101, 108 Pearson Realty - Craig Larson...... 49, 65, 76 California Water & Irrigation District Maps.....102 The information, views, and opinions Pearson Realty - Robb Stewart...... 70 CBIZ MHM...... 69 expressed in this publication and the Pearson Realty - William Enns...... 63 CBRE...... 66, 98 individual articles herein are those of Pearson Realty...... 58 CBRE Agribusiness...... 57 the respective author(s), and do not Petersen & Company...... 46 Central Valley Community Bank...... 50, 62, 78 necessarily reflect the views and Premier Ag Appraisal ...... 63 Chandler Ag Appraisal...... 56 opinions of the California Chapter of the Prudential Agricultural Investments...... 55 Chicago Title...... 65, 72 American Society of Farm Managers Rabobank, N.A...... 6 Clark Company...... 83 and Rural Appraisers, Inc. (California Reeve - Associates Real Estate...... 49 Cogdill & Associates...... 48 Chapter, ASFMRA), its officers, Rincon Corporation...... 84 Community West Bank...... 85 directors, or members. Ron Silva Realty, Inc...... 64 Correia-Xavier, Inc...... 58 Runyan Appraisal Service...... 76 This publication and the individual Cove Ranch Management...... 65 Schenberger, Taylor, McCormick articles herein are provided as general Cushman & Wakefield & Jecker, Inc...... 90 - Agribusiness Solutions Team...... IFC market commentary, and are not intended Schuil & Associates, Inc...... 46, 56, 77 Cushman & Wakefield to and do not constitute financial, legal, - Pacific Commercial Realty Advisors...... 71 Shasta Land Services, Inc...... 18, 103 investment, consulting or other profes- Donlon Realty...... 49 Simon & Hower, Inc...... 73 sional advice. The California Chapter, Dumont Printing...... 94 Tech Ag Financial Group, Inc...... 71 ASFMRA has not verified the accuracy Edwards, Lien & Toso, Inc...... 41 Ten Haken Hinz & Company...... 22 or basis-in-fact of any claim or statement F&M Bank...... 49 Terra West Group, LLC...... 42 made in the individual articles. If you Farm Credit - American AgCredit, CoBank, Texas Chapter, ASFMRA...... 84 have any questions about the infor- Farm Credit West, Fresno Madera Farm Credit, The Mendrin Group...... 42, 83 mation, views, or opinions expressed, Golden State Farm Credit...... BC The Ranch Co...... 72 including the underlying basis or meth- Farmer Mac...... 56 Tri Counties Bank...... 17 odology, you should contact the respec- FARMit® Education Program...... 106 UBS Farmland Investors LLC...... 34 tive author(s). Fenske Appraisal Services...... 87 Umpqua Bank...... 15, 28, 48, 81 Forcey Appraisal...... 30 US Trust Bank of America You should not rely on any informa- Fresno First Bank...... 54 Private Wealth Management...... 65 tion, views, or opinions in this pub- Gatzman Appraisal...... 9 Valbridge Property Advisors lication or the individual articles, but Giomi Inc...... 49 ...... 22, 27, 49, 65, 77, 86 rather, should seek the advice of a pro- Green Leaf Farms, Inc...... 63 Valley Ag Loans, Inc...... 19 fessional with regards to your specific Grimbleby Coleman CPAs, Inc...... 38 Valley Republic Bank...... 77 needs. Accredited members of the H.R. Macklin & Sons, Inc...... 77 Watson Realty...... 77 American Society of Farm Managers Hancock Agricultural Investment Group/ Way and Associates...... 48 and Rural Appraisers (ASFMRA), Hancock Farmland Services...... 47 Western Agricultural Services...... 12 including those whose contact Hein Ranch Company...... 76 Western Ranch and Home, Inc...... 64 information may be found in this pub- Home Realty and Land Co...... 76 Wonderful Agricultural Management...... 63 lication, have completed a rigorous Hoobler Insurance Services...... 49 Zengel & Associates...... 59, 87 training program in the valuation and

continued on page 112

4 2018 TRENDS® in Agricultural Land & Lease Values Message from the 2018 Trends®|CO-CHAIRS

Never would we have thought six years noted but were considered “outliers” by ago sitting in a board meeting we would the committee compiling the data. Due be here welcoming you to another year to the many factors that characterize of this premier publication. But we would agricultural properties in California and not be here if it wasn’t for the great foun- Nevada, one should not assume that all of dation that was laid before us. Thank the farms or ranches within a certain area, you to everyone who has worked on and or of a particular crop, will fall within the put together this publication in the past; ranges shown. The market is simply too it would not be what it is today without dynamic to make such assumptions. We your hard work. strongly recommend you obtain the as- Welcome to the 2018 Trends® In Agricultural Land and Lease sistance of a trained professional in your area to determine the Values, the 27th year of this publication. Thank you for your value or lease rate of a specific property. You will find contact interest in the premier publication of annual agricultural land information for many seasoned professionals in this publica- and lease value trends in California and Nevada. tion. Accredited members of the ASFMRA have completed a rigorous training program in the valuation and management of This publication is the product of countless hours of effort from agricultural properties. The ASFMRA is the only appraisal and volunteers throughout California and Nevada. We would like to management organization that offers a curriculum specifically thank our regional chairs: Kyle Dalrymple, Hal Forcey, ARA, based on agricultural real estate. Kary Griffith, Jamie Bigham, ARA, Kristen Massetti, ARA, Michael Ming, ARA, Allison Clark, ARA, Curtis Buono, ARA, Finally, the views and opinions expressed in the articles Michael Merkley, ARA, and David Bell, ARA. The regional throughout this publication are those of the authors and do not chairs along with their committees provide the raw value data necessarily reflect the views of the California Chapter of the and analysis that form the backbone of this publication. These ASFMRA or its members. This entire publication is copyright- professionals and their committee members deserve our collec- ed by California Chapter. All rights reserved. Do no reproduce tive gratitude. without the expressed written consent of the California Chapter. We would also like to thank our sponsors. Without their support Thank you again for your interest and support, we hope you ® we could not have created this publication to share with you. enjoy the 2018 issue of Trends ! We are grateful for their participation over the years and hope Sincerely, ® they continue to be partners in our Trends publication. Suzie Tiffany Holmes, ARA Janie Gatzman, ARA Roget and Liz McAfee deserve recognition as well for all of Co-Chairs their work and dedication to this publication. 2018 Trends® in Agricultural Land & Lease Values The value and lease data presented represents a general range of data for each state market. Specific sales or leases may be present in the market that are higher or lower than the ranges

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 5 GOOD THINGS COME TO THOSE WHO WORK.

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Food & Agribusiness Centers Fresno I Modesto I Salinas I Santa Rosa I Yuba City I Visalia I Bakersfield I Santa Maria I El Centro

6 2018 TRENDS® in Agricultural Land & Lease Values 2017|A STRANGE YEAR

Defining the California agricultural land market for 2017 is Tree nuts also gave us a bit of a head-scratcher in 2017. Don’t tricky: was it Stable Mable? Floods, Fires, Mudslides, Oh My! be fooled by the charts; while the high end of the ranges did Disaster Fatigue? Calm Before the Storm? For most commodi- soften in many markets, the low end often strengthened, and ties and land uses, the consensus is clear: it was a strange year. overall the markets remained fairly stable. Slight mean orchard Wine grapes, which gave us such an interesting storyline price decreases over the past year were due primarily to lower- last year, were rather boring in 2017 (except for some fires, quality properties selling, not necessary due to an overall de- but we’ll get to those later). The wine grape vineyard value valuation in nut orchards as was the case in 2016. range remained unchanged in most regions, with all regions Almond orchard value ranges tightened in nearly all regions of reporting stable markets. The only notable change occurred in the Sacramento and San Joaquin Valleys in 2017. Mean almond the Lodi Region where vineyard prices continued growing by orchard prices continued climbing in the Sacramento Valley, in- a mean of 5% from the prior year and 16% from 2015, due creasing by 4% from 2016 and 14% total from 2015. In the San to continued demand from Napa-area wineries for Lodi-area Joaquin Valley from 2016-2017, mean almond orchard prices grapes. Fresno-area wine grapes also continued their mean fell by 6% in the north and 5% in the south, but increased by value decline, by about 8% from their 2015 peak. In Sonoma 2% in the Fresno-Madera region, indicating a generally stable County our new inclusion of secondary areas, which were pre- market overall. From the market peak in 2015, mean orchard viously untracked but have seen sales increase as wineries and growers seek value-priced land and vineyards, appeared to show softening in Fresno WINE GRAPES $400,000 the low end of the value range, however prices Lodi High Price Paid per Acre were actually stable from the prior year. The Monterey $350,000 lighter California wine grape crop in 2017 was San Luis Obispo/ Santa Barbara $300,000 good news for the industry still churning through Sonoma bumper crops from the prior few years. While the Napa $250,000 industry endured some flooding at the beginning SoCal of the crop year, extreme summer heat, a heat $200,000 wave during harvest, and catastrophic wildfires that resulted in tragic loss of life and homes at $150,000 harvest’s end (but very little damage to the crop), none of these turned out to have a significant $100,000 impact on the land and vineyard markets, which $50,000 continued largely unchanged from 2016.

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 7 prices declined by a total of 10% in the north, 13% in the Fresno-Madera region, and 22% in the south, $50,000 however. In general owners held the highest-quali- Region 1: Sacramento Valley ALMONDS $45,000 ty orchards or only offered them for above-market High Price Paid per Acre Region 3: North San Joaquin Valley prices, reducing the high end of the range; while $40,000 buyers were increasingly reluctant to buy properties Region 4: Central San Joaquin Valley Region 5: South San Joaquin Valley $35,000 with the riskiest water sources, bringing up the low end of the range. In the Sacramento Valley planting $30,000 of new orchards, particularly on the west side of the $25,000 valley, continued in earnest and many of the sales represented newly-planted spec orchards. Demand $20,000 was strong in all markets but buyers had more $15,000

caution at the high and low ends of the value range. $10,000 Walnut orchard value ranges were also generally $5,000 very stable. From 2016-2017 mean walnut orchard

prices increased by 2% in the Sacramento Valley, but 1993 1994 1995 1996 1997 1998 1999 200 200 200 200 200 200 200 200 200 200 201 201 201 201 201 201 201 201 $0 0 1 2 3 4 5 6 7 decreased by 5% in the northern San Joaquin Valley 0 1 2 3 4 5 6 7 8 9 and 23% in the southern San Joaquin Valley— though in the south the high end of the range actually increased, while the low end decreased more significantly. In the Sacramento Valley an active market $50,000 with mostly average-fair properties selling resulted WALNUTS High Price Paid per Acre $45,000 in a tighter value range. In general, most orchard $40,000 prices were very similar to 2016 values for compa- Region 1: Sacramento Valley rable quality. In the San Joaquin Valley, sales in the Region 3: North San Joaquin Valley $35,000 north valley continued to represent older orchards Region 5: South San Joaquin Valley $30,000 with less desirable varieties, pushing down the low end of the value range. In the south valley a slightly $25,000 greater number of sales expanded the value range $20,000 on both the high and low ends, while sale prices were generally stable from the prior year. The lack $15,000 of prime properties selling negatively impacted the $10,000 high end of the range in all markets. $5,000 Pistachio orchards showed a mean price decline

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0 of 5% in the Fresno-Madera region and 12% in the south San Joaquin Valley from 2016. From the market peak in 2015, mean prices declined by a total of 9% in Fresno-Madera and 25% in the south valley. As with the other nut crops, few high-quality $45,000 properties were offered in the market, though there PISTACHIOS was strong demand present in spite of lower returns High Price Paid per Acre $40,000 from record-breaking crops in 2016 and 2017. $35,000 Region 1: Sacramento Valley Younger orchards with better water sources defined Region 3: South San Joaquin Valley the high end of the range, while older orchards with $30,000 risky water sources defined the low end of the range. $25,000 In all San Joaquin Valley markets nut orchard prices were highly responsive to water source, with buyers $20,000 showing a preference for properties with reliable $15,000 sources of both surface and groundwater. $10,000 Soft fruits continued to show price stability even as increasing labor costs brought continued profit- $5,000 ability into question. Sacramento Valley prunes,

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0 northern San Joaquin Valley cherries, and Central San Joaquin Valley stone fruit all showed stable orchard values from the prior year. Table grapes showed stable values in Fresno-Madera and a 30% mean value increase from 2015 in the south valley,

8 2017 Statewide Perspective though 2016-2017 showed a slight decrease due to slightly lower high-end sales. However, raisin $45,000 SOFT FRUITS vineyard mean values decreased by 6% from 2016, Sacremento Valley Prunes High Price Paid per Acre $40,000 and south valley stone fruits declined by about 20% North SJ Valley Cherries from 2016. Citrus mean grove values increased by Central SJ Valley Stone Fruit $35,000 South SJ Valley Table Grapes 9% from 2016 in Fresno-Madera to their highest South SJ Valley Stone Fruit $30,000 value range in history, reflecting the higher profitability for mandarin, Clementine or Blood varieties $25,000 which all show significant acreage increases. Citrus $20,000 grove mean values also increased in Southern California by 7-12% over 2016 values. $15,000 Dairy facility values again remained stable in 2017 $10,000 with very few sales taking place. Milk prices were slightly higher in 2017 but still below the cost of $5,000 production, particularly with labor costs on the rise. 1994 1995 1996 1997 1998 1999 200 200 200 200 200 200 200 200 200 200 201 201 201 201 201 201 201 201 1993 $0 Most facility sales took place in the northern San 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7 8 9 Joaquin Valley and represented 300- to 700-cow facilities. Half of those sales were intended for facility removal and permanent planting development, while the other half were divided between conver- Region 3: North San Joaquin Valley DAIRIES $5,000 sion to feedlot use (dairy consolidation), continued Region 4: Central San Joaquin Valley High Price Paid per Acre dairy operation, or conversion to a goat dairy. Region 5: South San Joaquin Valley $4,500 Open land values gave us the most interesting story

$4,000 lines in 2017, and most of the interest revolves around the ag industry’s newest four-letter word: $3,500 SGMA. The Sustainable Groundwater Management Act passed in 2014 and will regulate groundwater $3,000 usage in California for the first time in the state’s history. The potential for coming restrictions on $2,500 well water usage due to SGMA regulation weighed $2,000 heavily on the minds of buyers in the central and south regions of the San Joaquin Valley and in $1,500 parts of the Central Coast, though sellers were less attuned to the risk. Buyers sought and priced land

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $1,000 accordingly. In the northern San Joaquin Valley, buyers and sellers were less aware of SGMA or concerned that it might impact their operations. However, land sales outside of districts on the east

Janie M. Gatzman, ARA (209) 262-8214 Ag Valuation & Consulting [email protected] Investments | Leases | Partial Interests Oakdale, CA

Specializing in: Nut Crops | Plantable Land | Facilities Ranches | Undivided Partial Interests COVERING THE SAN JOAQUIN & SACRAMENTO VALLEYS

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 9 side of Stanislaus and Merced Counties had already been severely curtailed due to county groundwa- $30,000 $30,000 ter ordinances restricting the development of new Madera County Fresno County wells. In the Sacramento Valley, land buyers and $25,000 CROPLAND CROPLAND EAST $25,000 sellers rarely mentioned SGMA, likely because most of the Sacramento Valley is not designated as $20,000 $20,000 “critically overdrafted,” and as a mostly medium- priority basin, has a longer timeline for SGMA $15,000 $15,000 implementation than the San Joaquin Valley or the Central Coast. In both the northern San Joaquin $10,000 District District $10,000 and Sacramento Valleys, we expect greater diver- gence in values of land, orchards and vineyards that $5,000 Wells Wells $5,000 rely on well water only versus those that also have reliable surface water, as SGMA’s Groundwater 2001 2001 2007 2007 201 201 201 201 2005 200 9 201 2005 200 9 201 201 201 1993 1995 1997 1993 1995 1997 1999 1999 $0 2003 2003 $0 Management Plan implementation dates approach 1 1 in 2020 or 2022 (depending on basin prioritization). 3 5 7 3 5 7 SGMA awareness and its impact on value was most apparent in the San Joaquin Valley in 2017. In Madera County, district cropland fell by a mean of 16% from its 2015 peak, while well-irrigated $40,000 cropland fell by more than twice that amount: a Region 1: Sacramento Valley CROPLAND $35,000 mean of 38% from its 2015 peak. Similarly in Region 3: North SJ Valley High Price Paid per Acre Region 4: Central SJ Valley Fresno County, central and east-side district $30,000 cropland fell by a mean of only 3% from its 2015 Region 5: South SJ Valley peak, while cropland reliant on wells fell by seven $25,000 times that amount: a mean of 21% from 2015. Tulare County showed its widest range of cropland $20,000 value ever: from $15,000 to $28,500 per acre. $15,000 The low end was defined by properties mostly or entirely reliant on well water, while the high end $10,000 was defined by properties in the most reliable irrigation districts. The high end of the range actually $5,000 increased by 5% from 2015, while the low end

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0 remained unchanged. In Kings County cropland in the north districts increased by a mean of 2% from 2015, cropland in the central districts remained unchanged, while cropland on the west side fell by a mean of 30% from its 2015 peak. In Kern County cropland in the northeast and central areas $120,000 decreased by a mean of 10% from 2015, cropland COASTAL CROPLAND in the southeast area decreased by a mean of 5% Ventura High Price Paid per Acre from 2015, while land with state water decreased SLO/Santa Barbara $100,000 by a mean of 23% from its 2015 peak. No buyer Monterey Santa Cruz interest was reported for open land in “White Land” $80,000 areas of the county, which are areas with no water San Benito

district coverage. $60,000 Land values in the cool, rich coastal regions showed

stable prices from 2016-2017 in San Luis Obispo $40,000 and Santa Barbara Counties, as well as in the Gilroy area. The Monterey area showed a slight mean value increase of 4% over 2016, while San Benito County $20,000 increased by a mean of 18% over 2016. San Benito’s 1994 1995 1996 1997 1998 1999 200 200 200 200 200 200 200 200 200 200 201 201 201 201 201 201 201 201 increase is fueled by expansion from Salinas Valley 1993 $0 0 1 2 3 4 5 6 7 growers seeking additional land, and low inventory 0 1 2 3 4 5 6 7 8 9 in both areas; only a handful of agricultural properties changed hands in Monterey County in 2017, and none at all in the prime Blanco District farming region. In San Luis Obispo County, county-level

10 2017 Statewide Perspective restrictions on groundwater development have $30,000 driven up Paso Robles-area values of vested, CROPLAND FEDERAL DISTRICTS plantable land from $12,000 to more than $20,000 High Price Paid per Acre per net acre. In Southern California, land values $25,000 remained unchanged from 2016 in the Imperial, North SJ Valley-Stanislaus Coachella, and Palo Verde valleys. $20,000 North SJ Valley-Merced While legalization of recreational cannabis in Central SJ Valley California revitalized the greenhouse market in South SJ Valley $15,000 the Central Coast in 2016, the number of transactions decreased in 2017. Significant uncertainty $10,000 remains in this market due to permitting confusion between state and local regulators, black market $5,000 competition resulting in a steep drop in the market price of cannabis, and the yet-to-be implemented track-and-trace system. Local support for cannabis

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0 growing operations also appears unstable. For instance, in Calaveras County, county supervisors in 2016 welcomed legal cannabis grows as a way to recover from the devastating Butte Fire of 2015. About 700 legal operations were permitted and taxed in 2016-2017. However, the board of supervisors faced a backlash from the community for the influx of cannabis operations, and sup- portive supervisors were recalled and replaced with anti-cannabis supervisors who voted to ban all cannabis grows in early 2018. The permitted growers who find their operations suddenly illegal have promised a new wave of recalls to reinstate the legal permitting process, warning that illegal grows will mushroom out of control without legitimate county regulation. In the meantime, the taxes and investments legitimate operators have made will remain uncompensated.

Thus, uncertainty reigned in 2017, making it a strange year indeed. However, the premier rural property professionals of ASFMRA’s California Chapter tend to be glass-half-full kind of folks (particularly if the glass in question is at least half full of California wine). We are heartened by the growing signs of stability in many of the key agricultural land markets in California, and we’re closely following the value impacts of new and coming regulation of California’s surface and groundwater supplies. We hope you enjoy the 2018 edition of Trends®. Janie Gatzman, ARA Gatzman Appraisal Co-Chair of Trends® in Agriculture Land & Lease Values

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 11 REGION ONE|SACRAMENTO VALLEY Butte, Colusa, Glenn, Placer (West), Sacramento (North), Solano, Sutter, Tehama, Yuba, and Yolo

REGION TWO|NORTH COAST Del Norte, Humboldt, Lake, Marin, Mendocino, Napa, Sonoma and Trinity

REGION THREE|NORTHERN SAN JOAQUIN Amador (West), Calaveras (West), Contra Costa, El Dorado (West), Merced, Sacramento (South), San Joaquin, and Stanislaus

REGION FOUR|CENTRAL SAN JOAQUIN Fresno and Madera

REGION FIVE|SOUTHERN SAN JOAQUIN Kern, Kings, and Tulare

REGION SIX|CENTRAL COAST WESTERN AGRICULTURAL SERVICES Alameda, Monterey, San Benito, Providing professional farm and ranch San Luis Obispo, San Mateo, Santa Barbara, management, consulting, rural appraisal Santa Clara, Santa Cruz, and Ventura and real estate brokerage since 1981. REGION SEVEN|SOUTHERN CALIFORNIA Imperial, Los Angeles, Orange, Riverside, San Bernardino, and San Diego

REGION EIGHT|MOUNTAINS Alpine, Amador (East), Calaveras (East), El Dorado (East), Inyo, Lassen, Mariposa, Modoc, Mono, Nevada, Placer (East), Plumas, Shasta, Sierra, Siskiyou, and Tuolumne

REGION NINE|NEVADA Mary Rickert Jim Rickert, ARA, AFM Carson City, Churchill, Clark, Douglas, Elko, (530) 336-6667 [email protected] Esmeralda, Eureka, Humboldt, Lander, Lincoln, P. O. Box 817, Fall River Mills, CA 96028 Lyon, Mineral, Nye, Pershing, Storey, Washoe, 2016 Distinguished California Agriculturist 2015 Aldo Leopold Award Winner, CA and White Pine Photo credit: Pablo Vescia

12 2018 TRENDS® in Agricultural Land & Lease Values REGION ONE|SACRAMENTO VALLEY

Region Chair and Committee Kyle Dalrymple - CHAIR Jim Abel, ARA, MAI, SRA Lorrain Friant, AFM, AAC, ARA Heather Ellingson Greg Peters

General Comments The preceding year experienced an increased number of trans- ranches occurring over the past year were purchased by estab- actions within the Sacramento Valley Region. Demand for es- lished cattle operators looking to expand their winter grazing tablished orchard properties as well as orchard adaptable lands capacity. This region saw no viable turn-key dairy facility sales continues to drive the regional market. Growers are continu- in 2017. ing to enjoy favorable returns for virtually all orchard crops Overall, nearly all types of agricultural properties displayed with almond and walnut prices steadily rising over the last ±18 stable/strong values over the past year, continuing to be primarily months. Rebounding almond prices have continued to propel driven by permanent planting development. It is anticipated new almond developments, largely along the west side of the that land suitable for permanent plantings in this region will valley in Tehama, Glenn, Colusa, Sutter and Yolo Counties. remain at elevated levels due to the limited supply of suitable Solano County has seen a significant amount of new almond land being offered for sale, paired with strong demand from developments over the last couple of years, largely driven well-capitalized, existing operators/buyers active in the market. by investment groups. Prunes continue at record high levels. This assertion is bolstered by the historically strong irrigation Peaches are also receiving relatively high prices, however supplies available to Sacramento Valley growers, which has the ever-increasing labor costs and foreign imports (China) garnered enhanced focus over the course of the recent drought. continue to reduce profit levels. This region saw a significant number of peach orchards removed after the 2017 crop, many of which were not yet at the end of their economic life. Commodity prices for most irrigated field/row crops appeared relatively stable and near historical averages with the exception of alfalfa which has suffered the last several years due primarily to the depressed dairy industry. Following a severely depressed 2016 and early 2017, rice prices corrected to profitable levels around $10-14 per cwt. Foothill dry pasture ranch and rangeland sales have been abundant in the area over the last twelve months with the majority of discovered sales occurring in the Bear Valley area of Colusa County. Values appear to be consistent with this market’s historically stable to slightly increasing value trend. Virtually all known sales of commercial sized livestock

14 REGION ONE|SACRAMENTO VALLEY REGION ONE 15 - in Agricultural Land & Lease Values Agricultural Land & Lease in ® IRRIGATED CROPLAND IRRIGATED 2018 TRENDS Strong demand for nearly all types of for nearly all Strong demand the in properties cropland irrigated throughout area continued North State rela- with values remaining the past year proper Supply of available tively stable. ties for sale has remained limited. Most ties for sale has remained interest was of the market participant property that was for irrigated cropland planting devel- adaptable to permanent and walnuts. opment, namely almonds and almond prices The moderate walnut on effect dampening slight a had have although no value the open land market, noted. Properties declines have been sources remain in with quality irrigation high demand. value a indicate transactions Recent range of ±$12,000 to upwards of 2 ±$22,000 per acre for Class 1 and soil types suitable for most any farming practices. Sales of less productive Class 3 and 4 irrigated cropland properties over the past year reflect a value range of ±$8,000 to ±$12,000 per acre, the looking participants market of result for any type of ground with permanent primarily almonds planting adaptability, and walnuts. www.calasfmra.com in 2017, being unchanged from 2016 from unchanged being in 2017, in received the 20% above yet well the With 5% received in 2014. 2015 and being of substantial acreage transition to from irrigated cropland converted plantings and increasingly permanent (exac- surface water supplies unreliable environmental erbated by self-imposed are relying increas- concerns) growers to supple- ingly on pumped groundwater less reliable surface ment high cost and several areas which However, water. development to have seen significant and had historically permanent plantings supplies experi- limited groundwater to leading depletion groundwater enced above- The wells. some of failure the of 2016/2017 normal precipitation has alleviated much of the immediate concern in these specific areas, yet these issues will certainly resurface in the drought. prolonged another of event North-state buyers in 2017 were not - significantly concerned about regu lation or restriction of groundwater implemen- extraction due to SGMA tation, though awareness may start loom. deadlines increasing as SGMA WATER The availability of inexpensive and de- of inexpensive The availability always irrigation water has pendable land factor affecting been a significant the majority of the Sacramento values for precipita- The above-average Valley. the 2016/2017 rain tion realized during reassurance after season provided added reductions expe- widespread allotment 2016 and 2017 rienced in 2015, with in most areas. providing full allotments has Valley Although the Sacramento stronger irri- historically experienced compared to much gation reliability as recent the Valley, Joaquin San the of have proved a severe drought conditions reliability of North sobering test to the - State water supplies. Federal water con Project Valley tractors within the Central saw improved water deliveries in 2017, dependent on location yet this is largely as agricultural water service contractors al- contract 100% saw Delta the of north contrac- service to compared as locations received which Delta of the south tors just 65% of their contract supply. Joaquin River San and Sacramento Exchange and Settlement Contractors State The allotments. 100% received Project provided 60% allotments Water RICE may be adaptable to permanent crops. WALNUTS Rice properties with a dependable water 2017 saw a relatively active market for Sales of properties strictly devoted source, either from ground water or a established walnut properties, largely to rice production were extremely reliable water district, command prices limited to fair and average quality limited in 2017. This likely in response at the upper end of the market. Properties orchards with few optimal, prime quality to commodity prices which tumbled with strong waterfowl hunting add de- orchards offered for sale, similar to 2016. from the historical average range of sirability, yet don’t typically equate to Following the commodity price correc- ±$11.00-$14.00 per cwt. in March/April elevated prices. Relieved drought condition of 2015 and 2016, walnut prices to ±$5.00-$7.00 per cwt., where prices tions by above average precipitation in continued to firm / strengthen in 2017 remained static through the end of the the North State provided for full water which has translated to increased demand year. Industry reports indicate that as of allocations from most surface water for viable orchard properties. Sales of December 2017, the U.S. had the largest suppliers in 2017. This led to an estimated below-average orchards and orchards rice stocks on hand since the mid-1980s. 499,000 planted rice acres in the state largely or entirely comprised of the less This is the result of a 22% increase in na- for 2017, up ±18% from the drought- desirable varieties (Serr, Vina, Tehama, tionwide production which boosted total stricken 2015 growing season. With the Ashley, etc.) continued to illustrate crop size to a record 305 million cwt. passage of the 2014 Farm Bill, the guar- reduced demand compared to modern Despite depressed rough rice prices, the anteed USDA direct and countercycli- and more desirable Chandler, Howard few rice properties which traded hands cal payments are no longer being issued and Tulare orchards. Annual total pro- in 2017 illustrated firmly elevated prices, to producers. In its place, USDA has duction continues to reach historic highs, largely attributable to the infrequency created the Agricultural Risk Coverage due primarily to the increased number in which properties in the valley’s rice (ARC) and Price Loss Coverage (PLC) of bearing acres as well as stronger per region are offered for sale. Virtually all programs. Most farmers have signed up acre yields. The 2017 crop is forecasted demand in this market has come from for the PLC program which provides a at ±650,000 tons, slightly below the existing area rice growers looking to payment only when prices fall below a all-time record of 673,000 tons realized expand their operation with some or- “reference” price set by federal statute. chardists in search of acreage which in 2016. The world market favors the Chandler, Howard and Tulare varieties due to the light color and high quality of the kernel with these varieties continuing to comprise the vast majority of new orchard developments.

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16 REGION ONE|SACRAMENTO VALLEY REGION ONE 17 com PRUNES in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS

California’s prune market enjoyed prune market California’s commodity year of strong another in The steady decline 2017. prices in the since acreage prune California inventory coupled with low mid-2000s a market have caused to appears levels prices by surging correction illustrated 2013 crop. Finalized beginning with the non-finalized pricing and estimated an average grower pool prices suggest and $2,400 return between $1,800 2016 crop, largely per dry ton for the Although 2017 unchanged from 2015. finalized by the prices have not been as of the Association Prune Bargaining prices are writing of this publication, expected to settle slightly lower than crop of that of 2016 due to a larger the price drop smaller fruit. However, The is not anticipated to be drastic. world market has softened over the last - couple of years with shipments to tra players such as Russia, ditionally large 1-800-922-8742 | TriCountiesBank. | 1-800-922-8742 Small Farm Lending Programs Livestock and Crops Credit of Lines Agricultural Real Estate Loans Loans Equipment Agricultural Management ServicesTreasury Loans USDA www.calasfmra.com provides a ® winds and wet soils. The newer, self- newer, The soils. and wet winds has variety Independence pollinating Independence pricing gained popularity. Nonpareil somewhat less than has been varieties. than the hard shell but higher highs is not at the record While income continue almonds ago, years few a of the highest positive to provide one of other the to compared when returns net California. Sales of nut crops grown in in 2017 nearly almond orchard properties in 2016. Developer doubled over those orchards planted newly of listings the hope of cashing in on continued in west Valley’s The the record high prices. Glenn and western Colusa, side (Yolo, Counties) continued to see the Tehama devel- number of new almond largest due to the This was largely opments. available undeveloped land with lower east Valley’s land values relative to the side, with its stronger water availability and higher soil quality. ALMONDS Branches conveniently located throughout throughout located conveniently Branches California. Central Northern and Our unique brand of Service With Solutions breadth of financial services, business knowledge and personalized problem solving. a “come to you” style It’s of full-service relationship banking built to last for years. Counties Tri BankYour Business Banker is a financial services expert dedicated to understanding you and your business, and will coordinate with other specialists construct to and update a custom portfolio of financial services to help your business grow and thrive. Serving the agricultural industry for more than 40 years. Member FDIC Business relationships nurtured from the ground up. Almond orchard property demand orchard property Almond State. strong in the North remains rela- prices have rebounded Almond decline in since the sharp tively well 2016 crop The late-2015/early-2016. in mid-2017 which was finalized year, grower return for resulted in average per pound with Nonpareils around $2.75 returning between pollinator varieties Current marketing $2.00 and $2.30/lb. indicating continued year (2017 crop) is Nonpareils reported- firming prices with $2.80/lb. and $3.10/ ly trading between remaining relatively lb. with pollinators and $2.30/lb. as static between $2.10 New almond of early-January 2018. than prevalent more are developments other permanent plantings throughout rootstock has The Krymsk the region. fostered optimism for new developments to due locations marginal more the in its strong rooting characteristics, which increases the chances of surviving strong Brazil and Mexico down considerably the Yuba and Sutter County areas have caliber orchards are often in member- during 2016 and 2017 equating to high consisted of inter-planting of advanced- ship with desirable processors/marketers carryover in both years. This is due in age prune orchards which were near who have historically paid higher prices part to the strong U.S. Dollar as well as the end of their economic life. Despite compared to that received on the cash or large imports of lower priced, small fruit these historically strong prune prices, open market. Thus primarily only lower- from South American producers. So far the favorability of competing nut crops quality or advanced-age prune orchards in the current marketing year, interna- continue to entice operators towards are offered for sale. The conclusion tional shipments have been down which walnuts/almonds when developing drawn is that current prune growers are is providing optimism for 2017 crop new orchards or redeveloping existing enjoying elevated commodity prices prices. Elevated price levels enjoyed orchards. This is largely attributable to which has led to some new prune over the last several years has spurred the reduced labor costs associated with orchard plantings however, the overall some, yet limited number of new prune nut crops in addition to greater overall prune market continues to be somewhat orchard developments in the area with perceived commodity demand. Quality overshadowed by the demand for alter- nursery reports indicating a moderate prune orchards with strong crop pro- native permanent plantings. amount of new development acreage. duction are rarely listed for sale, largely Most of these “new” prune plantings in due to the fact that operators of high

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18 REGION ONE|SACRAMENTO VALLEY VALUES: LAND AND LEASE REGION ONE LAND USE VALUE PER ACRE ACTIVITY / TREND RENT RANGE ACTIVITY / TREND

COLUSA, GLENN, BUTTE & TEHAMA (Northwestern Counties) Rice $10,000 - $13,000 Moderate/Stable $275 - $450/ac or 20% - 30% Limited/Stable Irrigated Cropland $10,000 - $20,000 Moderate/Stable $200 - $350/ac or 12% - 25% Moderate/Stable Rangeland $650 - $2,500 Moderate/Sl. Increasing $10 - $45/ac or $30 - $45/AUM Moderate/Increasing Almonds $20,000 - $30,000 Moderate/Stable 25% - 35% Moderate/Stable Walnuts $20,000 - $30,000 Moderate/Stable 25% - 35% Limited/Stable Prunes $19,000 - $28,000 Very Limited/Stable 15% - 25% Very Limited/Stable Olives $10,000 - $19,000 Very Limited/Stable 10% - 20% Very Limited/Stable

YUBA SUTTER AREA (Feather River Basin & Sutter Basin) Rice $9,500 - $12,500 Limited/Stable $250 - $400/ac Moderate/Stable Irrigated Cropland $12,000 - $22,000 Limited/Stable $200 - $300 - 12% to 25% Moderate/Stable Walnuts $18,000 - $33,000 Moderate/Stable 20% - 30% Very Limited/Stable Prunes $20,000 - $28,000 Very Limited/Stable 15% - 25% Very Limited/Stable Peaches $27,000 - $30,000 Very Limited/Stable 12% - 25% Very Limited/Stable

SOUTH SUTTER, WESTERN PLACER, NORTH SACRAMENTO, SOLANO & YOLO COUNTIES Rice $9,000 - $13,000 Moderate/Increasing $200 - $350 Moderate/Stable Vegetable Crops: Class 1-2 Soil $15,000 - $23,000 Moderate/Stable 12% - 30% Limited/Stable Irrigated Field Crops: Class 3-4 Soil $8,500 - $16,000 Moderate/Stable 12% - 30% Limited/Stable Rangeland $750 - $3,500 Moderate/Stable $10 - $45/ac or $30 - $45/aum Moderate/Stable Walnuts $16,000 - $25,000 Moderate/Stable 20% - 25% Limited/Stable Vineyards $15,000 - $30,000 Limited/Stable 20% - 25% Very Limited/Stable

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www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 19

$15,000 $30,000 $30,000 $30,000 $28,000 $20,000 $16,000 $30,000 $33,500 $30,000 $25,000 $25,000 $18,000 $25,000

ALMONDS VINEYARDS $6,000 - $6,000 - $8,000 - $20,000 - $18,000 - $14,000 - $13,000 - $12,000 - $15,000 - $13,500 - $13,000 - $13,000 - $10,000 - $10,000 -

- $11,000 - $15,000

OLIVES PEACHES $3,500 - $12,000 $3,500 - $10,000 $3,500 - $11,000 $3,500 $10,000 - $19,000 $10,000 - $19,000 $10,000 - $19,500 $27,000 - $30,000 $27,000 - $30,000 $30,000 - $35,000 $20,000 - $28,000 $10,875 - $19,500 $10,875 - $19,500 $12,000 $10,000 $12,000 $18,000 PRUNES PRUNES WALNUTS $5,000 - $9,500 - $24,000 $6,000 - $12,000 $5,000 - $10,000 $8,000 - $13,000 $8,000 - $13,000 $8,000 - $9,000 - $18,000 $9,000 - $19,000 - $28,000 $18,000 - $25,000 $22,000 - $31,000 $20,000 - $28,000 $20,000 - $28,000 $20,600 - $35,000 $15,500 - $26,000 $16,000 - $25,000 $15,000 - $30,000 $18,000 - $35,000 $18,000 - $30,000 $12,000 - $25,000

WALNUTS WALNUTS RANGELAND $750 - $3,500 $750 - $5,000 $750 - $5,000 $500 - $2,000 $500 - $2,000 $400 - $1,200 $8,000 - $16,000 $8,000 - $18,000 $1,000 - $5,000 $20,000 - $30,000 $20,000 - $30,000 $17,000 - $33,000 $25,000 - $40,000 $12,000 - $25,000 $18,000 - $33,000 $18,000 - $33,000 $32,000 - $41,000 $23,000 - $30,000 $12,000 - $25,000 $12,000 - $17,500 $12,000 - $16,000

- $1,250 - $8,000 RICE RANGELAND $600 - $1,700 $600 - $1,500 $600 - $1,500 $600 - $1,250 $650 - $2,500 $600 $1,000 - $1,500 $9,000 - $13,000 $9,500 - $15,500 $7,500 - $13,000 $7,000 - $10,000 $5,000 - $9,000 $4,500 - $9,000 $5,000 HISTORICAL VALUE RANGE per acre HISTORICAL VALUE RICE RICE Class 3-4 Soils $8,000 - $12,000 $8,000 - $10,500 $8,000 - $10,500 $6,000 - $10,000 $5,000 - $9,000 $5,000 - $8,000 $9,500 - $12,500 $8,000 - $11,000 $7,750 - $10,000 $8,500 - $11,000 $6,000 - $8,000 $6,000 - $8,000 $5,000 - $8,000 $8,500 - $16,000 $6,500 - $14,500 $5,250 - $14,500 $7,000 - $13,000 $5,000 - $7,000 $3,500 - $7,500 $2,500 - $5,500 IRRIGATED CROPLAND IRRIGATED $10,000 - $13,000 $10,000 $10,000 $10,000 $22,000 $22,000 $20,000 $15,000 $12,000 $22,000 $23,000 $20,500 $15,000 $12,000 $23,500 $23,500 $22,500 $15,000 $12,000 $20,000 $22,000 $23,000 - - - Class 1-2 Soils VEGETABLE CROPS VEGETABLE $7,000 - $6,800 - $6,000 - $3,500 - $7,900 - $5,000 - $5,000 - $9,000 - $6,500 - IRRIGATED CROPLAND IRRIGATED CROPLAND IRRIGATED $3,500 $5,000 $4,500 $10,000 - $18,000 - $15,300 - $11,700 - $13,000 - $13,000 - $10,000 - $12,000 - $15,000 - 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 COLUSA, GLENN, BUTTE and TEHAMA COUNTIES (NORTHWESTERN COUNTIES) 2017 LAND USE RIVER BASIN and SUTTER BASIN) YUBA SUTTER AREA (FEATHER 2017 COUNTIES SOLANO and YOLO SOUTH SUTTER, WESTERN PLACER, NORTH SACRAMENTO, 2017 LAND USE LAND USE

20 REGION ONE|SACRAMENTO VALLEY REGION ONE 21 7 5 3 7 5 3 7 5 3 7 5 3 1 1 1 1

2003 2003 2003 201 201 2009 2005 201 2003 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2007 201 2007 201 2007 2007 2001 2001 2001 2001 $0 $0 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993

0 $5,00 0 $5,00

0 $10,00 $10,000

in Agricultural Land & Lease Values Agricultural Land & Lease in 0 $15,00 $15,000 ®

0 $20,00 $20,000

0 $25,00 $25,000

2018 TRENDS

$30,000 0 $30,00

$35,000 $35,000

$40,00 0 0 $40,00

WALNUTS OLIVES ALMONDS VINEYARDS

$45,000 $45,000 3 7 5 3 7 5 3 3 7 5 7 5 1 1 1 1

2003 2003 201 201 201 2009 2005 2003 2003 201 201 201 2009 2005 201 201 201 201 2009 2005 201 201 2009 2005 201 201 2007 201 201 2007 2007 2007 2001 2001 2001 2001 $0 $0 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993

0 $2,00 $2,000

0 $4,00 $4,000

0 $6,00 $6,000

www.calasfmra.com

0 $8,00 $8,000

0 $10,00 $10,000

0 $12,00 $12,000

0 $14,00 $14,000

0 $16,00 $16,000

0 $18,00 $18,000

0 $20,00 $20,000

ROW CROP LAND CROP ROW CROP LAND CROP

0 $22,00 $22,000

D RANGELAN VEGETABLE/ D FIEL IRRIGATED RICE

0 $24,00 $24,000 REGION ONE tel (530) 674-3500 fax (530) 674-0426 1505 Starr Drive, Yuba City, CA 95993-2623 [email protected] [email protected] [email protected]

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22 REGION ONE|SACRAMENTO VALLEY REGION TWO|NORTH COAST

Region Chair and Committee Hal Forcey, ARA - CHAIR Todd Combs, ARA Russ Forsburg, ARA Mark Gregg, ARA Sean Lim, MAI Mike Pipkin, ARA

North Coast Overview Well, we can’t discuss the North Coast this year without first vineyards and wineries, although specialty dairy and poultry addressing the October 2017 Northern California Wildfires. On production remain active in southern Sonoma and northern October 8th multiple wildfires broke out across the North Coast, Marin Counties. The northern region includes Humboldt, in Napa, Sonoma, Mendocino and Lake Counties. Excessive Del Norte, and Trinity Counties, which are less agriculturally fuel, dry conditions, and winds reported at over 85 mph, were a diverse, consisting mostly of forest products, specialty dairy, complete recipe for a firestorm. The fires were driven through and cattle. rough terrain, expansive valleys, across major thoroughfares, The region’s diversity is attributed to the mild coastal climate, as well as small and large communities, forcing evacuations good water resources, and proximity to urban population/wealth in Napa, Calistoga, Santa Rosa, Sonoma, Kenwood, and many centers. Animal husbandry industries (dairy, beef, poultry, and other North Coast communities. Once contained, the fires had eggs) continue to move to organic or other specialty produc- laid waste to over 200,000 acres and destroyed over 8,350 tion, as the higher returns from specialty products are necessary homes, businesses and structures. Most of the region was on to offset the higher underlying land prices in the region. The complete lock-down for nearly two weeks. Once emergency re- region’s mild climate and agricultural atmosphere make it sponders moved from saving lives to fighting the fires, extensive a highly desirable rural residential area, with much of the resources were mobilized to restore access, power, natural gas, southern area impacted by strong rural residential demand and and communication systems destroyed by fire. The fires hit at strong residential entitlement values. the peak of the wine tourist season, and while news reports showed extensive devastation and loss, damage to the vineyard The legalization of cannabis or marijuana is impacting Sonoma, and wine industry proved to be fairly limited. Fortunately, most Mendocino, Humboldt and Trinity Counties, with signifi- of the 2017 crop was in the winery, except for a small portion of cant movement into Santa Rosa’s industrial space. While the the late season wines, like Cabernet Sauvignon and Zinfandel. industry has the potential to move out of the hills to agricultural Despite the events of the year, 2017 should see an average sized sites, competition and values for agricultural land are mostly crop, with very good overall wine quality. unaffected, since most jurisdictions have placed significant limits on the size of outdoor grows. While this industry was The North Coast region runs from San Francisco to the Oregon just legalized by California voters, the Federal Government border, bounded by the Pacific Ocean and the Central Valley. still considers it illegal. As most banks are federally regulated, Geographically and economically, the North Coast can be financial resources are mostly unavailable. Currently, there is divided into the southern and northern regions. The southern not sufficient market data available to address valuation issues region overlies Napa, Sonoma, Mendocino, Lake, and Marin or clearly track any trends relative to this evolving market. Counties, with the key economic drivers for this area being

24 REGION TWO|NORTH COAST The vineyard and wine industry is Wine Industry Overview: While the final becoming tighter, thus nearly all wineries mostly in the south, within California’s numbers have yet to be tallied, 2017 will are looking to expand direct-to-consum- North Coast American Viticultural Area go on record as the twenty-second con- er wine programs (tasting rooms, wine (AVA). This AVA extends from the San secutive year of positive growth for the clubs, and other web-based programs). REGION TWO Francisco Bay, about 100 miles north, US wine industry, noting that the growth Direct/retail sales generate significantly and from the Pacific Ocean, about 50 rate is slowly declining as boomers are higher returns than traditional wholesale miles inland. The North Coast has been being replaced by much more cost-con- distribution channels. This is critical recognized as a prime vineyard and science millennials who have a much for many small and mid-sized wineries winery area since the mid 1900’s, and broader choice in alcoholic beverages, as (<10,000 cases) who no longer have includes Napa, Sonoma, Mendocino, well as cannabis. The US will maintain ready access to traditional wholesale dis- and Lake Counties, plus portions of its position as the world’s largest wine tribution channels. While direct sales are northern Marin and southwestern Solano market, dating back to 2010. Domestic critical to the smaller producers, large Counties. Napa and Sonoma Counties wine sales were up over 2016, with producers are actively working to expand are the best-known wine regions in the consumers continuing to trade up. their direct or retail sales, since returns North Coast, California, and the US. The upward US wine trends are anchored are significantly greater than distribu- The Wine Institute notes that there are by the continued strength of the US tor or brokered wine sales. A fact that is over 4,700 bonded wineries in California economy, declining unemployment often overlooked when addressing grape (licensed wineries, warehouses, in- rates, and strong interest in drinking pricing, is that the vast majority of the dividuals, etc.), but only about 1,850 diversity. With all these factors in place, wine being sold is through distributors. physical wineries, in addition to over consumers are continuing to embrace Today, both wineries and growers are 602,000 acres of wine grapes. The North Premiumization, and are willing to not moving to maximize vineyard yields by Coast is home to approximately 905 only try new wines, but are willing to redeveloping vineyards with declining physical wineries and 142,000 acres pay for quality or premium wines. The production to modern, higher density of wine grape vineyards, or about 49% legalization of recreational cannabis use and higher producing vineyards. of the State’s wineries and 23% of the in 2018 is something to watch, to see Additionally, as demand for Cabernet vineyard acreage. Information obtained if Boomers harken back to their youth continues to soar, we have seen a sig- from key winery and vineyard groups and give it a try; but as of 2017 the wine nificant expansion of Cabernet planted in each county indicates that: Napa has industry posted strong growth between in areas previously considered too hot or about 475 wineries and 45,000 acres of 10 and 14% above 2016 levels in the cold for this varietal. Growers are ben- vines; Sonoma has 255 wineries and premium wine segments. As long as the efiting from above-average yields and 64,100 acres of vines; Mendocino has economy continues to hold, it appears the fact that wineries are paying near 108 wineries and 21,400 acres of vines; that the premium wine markets that the county average prices. Fortunately, the Lake has 35 wineries and 8,400 acres of North Coast supplies should continue to region has seen nearly seven years of vines; Solano (Suisun & Green Valley perform well. uncharacteristically good growing con- AVA) has 20 wineries and 3,000 acres The wine industry continues to see ditions, and grape quality from many of of vines; and Marin 12 wineries and 200 consolidation in traditional distribu- these secondary areas locations has been acres of vines. tion channels with retail shelf space appropriate for use in many mid-priced wine programs.

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www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 25 Napa County well until the early September heatwave grape, vineyard and plantable land prices caused sugar levels to jump, and harvest to increase at somewhat unprecedented Napa is best known for premium wine to swing into high gear for the whites levels. production, and has become somewhat and early harvest reds. The heatwave Winery development has also come synonymous with world-class Cabernet broke and normal weather patterns Sauvignon. Wine, wine grapes, and under greater scrutiny, with local gov- resumed, allowing additional hang ernment and voters looking to revise the tourism remain the primary economic time for the Cabernet and Bordeaux drivers for Napa, with no other agri- Winery Definition Ordinance, resulting grapes. Fortunately, most of the crop in a record number of new winery cultural uses of note. Napa produces a had been harvested before the October wide variety of high-quality wines aside permit applications being filed. This wildfires broke out, with most growers has in turn increased the value of sites from Cabernet Sauvignon, including and wineries optimistic about this year’s Chardonnay, Pinot Noir, Sauvignon with established winery permits. Traffic fruit and wine quality, noting that 2017 throughout much of the Napa Valley has Blanc, Merlot, and Zinfandel, to name saw an average-sized crop. a few. However, the region is still best reached critical mass. Over the past ten known for its high-quality Bordeaux Grape prices are typically tied to supply years housing price and availability has style red wines, many of which command and demand, and Napa is no exception— displaced much of the workforce serving the highest wine and wine-grape prices except that supply has been limited by the the vineyard, wine, and related tourist in the state. fact that Napa is for all accounts plant- trades. With much of the workforce now ed-out. Production and demand were commuting into the Napa Valley, coupled Premiumization has been a prevalent generally in balance for the six years with the growing wine tourist trade, and theme in Napa for several years. Today’s between 2004 and 2010, with Cabernet a general increase in full-time residents key market participants include wineries, Sauvignon prices steadily increasing living up valley, Napa’s two main access growers, financial investors, and lifestyle about 2.1% per year over the period roads now suffer from almost constant buyers. The market continues to be the ($3,948 to $4,480/ton), as reported in the gridlock. This has sparked growing op- benefactor of a robust economy and a USDA Grape Crush Report for District position to new winery construction. diverse group of lenders, offering loans 4, Table 6. Between 2010 and 2016, Concerns regarding the time and cost at historically low interest rates with production and premiumization saw to obtain winery use permits, as well equally historically high loan-to-value Cabernet prices escalate to around 7.8% as uncertainty as to what approvals will ratios. This is said to be necessary for per year ($4,480 to $6,830/ton), with the ultimately be granted, are forcing many lenders to compete with an excessive expectation that the average Cabernet would-be winery developers to buy amount of cash sitting idle in the market price for 2017 will exceed $7,000 per existing facilities, driving up demand today. ton. While this benefits growers and (and prices) for established wineries. Regarding Premiumization, Napa leads landowners alike, there is growing Napa is a highly diverse market with the pack. In recent years consumers have concern as to just how high prices can significant ranges in vineyard, plantable continued to trade up to higher-priced go. Since wine prices ultimately drive land, and site component/entitlement premium wines, which has worked the market, it is important to note that values. These value ranges are generally well for Napa as well as the rest of the grape and vineyard prices are going up broken down into distinct markets, North Coast Wine Region. If strong faster than wine prices, resulting in an resulting from differences in location, wine prices drive strong grape prices, economically unsustainable trend. AVA and Terroir, which are the collective which in turn drive strong vineyard and A key factor driving Napa’s market in environmental factors affecting varietal land prices, 2017 did not disappoint in recent years is that Napa is effectively selection and fruit quality. Relative to any category. Premiumization, coupled planted out, with no significant acreage market demand and prices, Napa has with the intense demand for Cabernet, available for future vineyard develop- historically had three fairly distinct geo- and simple economics have been at the ment or expansion. Most of the valley graphic markets, driven primarily by forefront of a trend to redevelop much floor and readily developable hillside location and AVA, as well as wine and of the Napa Valley to Cabernet. Time parcels are planted, with nominal land vineyard economics. will tell if the fruit quality will allow available for development. Over the Napa to continue to reign supreme in the • Prime Napa Valley has historically past twenty years, increasing environ- included the heart of the Napa Valley and Cabernet market, or if this will open the mental regulations, urbanization, and door to other high quality, but lower cost the surrounding hills, including some of governmental regulations have greatly the most recognized valley floor appel- Cabernet regions like Sonoma County’s curtailed the ability to expand vineyard Alexander Valley. lations including Oakville, Rutherford, development. Tough erosion control, St. Helena and Stags Leap, in addition Napa’s vineyards were blessed with view-shed, and stream setback ordi- to the surrounding hillside appellations heavy winter rains, which filled the nances coupled with growing resistance including Howell Mountain, Spring reservoirs and replenished groundwa- from voters and environmental groups Mountain, and Diamond Mountain, plus ter reserves depleted by the extended are making vineyard development geographically significant growing areas drought. The vines responded well to a time consuming, expensive, and highly like Pritchard Hill. This area has histori- mild spring, extended bloom, and good speculative. This has greatly increased cally produced Napa’s highest quality fruit set. The season was progressing demand for existing properties, forcing Cabernet Sauvignon and Bordeaux style

26 REGION TWO|NORTH COAST red wines, with many of the highest • Outlying Napa County includes prices remain the strongest in the Prime quality wines coming from foothill and vineyard areas outside the Napa Valley, markets, the need for quality fruit is upland parcels. Historically, many of most notably Chiles Valley, Pope Valley, blurring the geographic lines which have REGION TWO the low-lying sites along the Napa River Wooden Valley, and American Canyon. traditionally separated these market have been developed to Sauvignon The key for these outlying areas is that segments. Today, premium prices are Blanc, Merlot, Chardonnay, garnering they are still within the Napa Valley being paid for Secondary area proper- prices near the bottom of the value range. AVA, meaning the fruit can be used in ties capable of producing truly premium Today, the trend is to redevelop these any Napa Valley AVA wine. While these quality Cabernet, regardless of AVA. sites to Cabernet, by adding extensive areas can produce high quality fruit, they Additionally, demand and prices in drainage. are generally subject to more extreme much of the Secondary markets were The trend is attributed to the fact that weather patterns. This increases produc- also at record highs for sites capable of Cabernet returns are twice those from tive risk since the area is generally more producing and ripening average to good traditional varieties, with the economic prone to frost, excessive heat, or bay quality Cabernet. This is because the returns from more traditional varieties, cooling, which generally results in lower returns are nearly double those available barely supporting the underlying yields, fruit quality, grape prices, and net to Merlot, Chardonnay, Sauvignon Blanc plantable land values. Intense demand earnings, in the long run, as compared and Zinfandel. from wineries, growers, and invest- to vineyards in either the Prime or ment buyers, coupled with increasing Secondary markets. Sonoma & Marin Counties grape prices have kept vineyard and land There has been limited market activity Sonoma County’s agricultural markets prices on an upward trend, mostly in the over the past four years, but it has continued the increasing value trend $300,000 to >$400,000/acre range. bolstered values throughout the Outlying that was established in the five previous • Secondary Napa Valley has histori- areas, with one 2017 sale (to an invest- years. 2017 saw strong demand and sales cally included the northern and southern ment buyer) at nearly double the market volume for commercial vineyards and ends of the Napa Valley, bordering the range. While this sale is important, one vineyard estate properties of all sizes and prime areas. To the north is the Calistoga sale does not make a market. Grape locations. This trend is a direct result of Appellation, with Yountville, Oak Knoll, demand and prices have been elevated by the strong economy, low interest rates, and Coombsville Appellations plus the intense demand for Napa Cabernet, potentially high vineyard earnings, and the surrounding hills, including Atlas and the region has benefited from six increased winery purchases of vineyards Peak, Soda Canyon, and Mt. Veeder, unseasonably mild weather years, with and plantable land. above average production and fruit to the south, and to the Los Carneros Wineries have become more active Appellation, lying southwest of Napa quality. This has enhanced long-term earnings expectations, with several large buyers in order to better-control grape next to San Pablo Bay. These areas were supplies and costs, avoid increasing historically considered too hot (north) or wineries and financial buyers willing to take the risk. With higher returns, governmental regulations, and mitigate too cool (south) for premium Cabernet the higher costs for new vineyard and Bordeaux varietals, and were vineyards in these areas have remained in the $50,000 to >$130,000/acre range. developments. Market values have developed to Zinfandel in Calistoga, continued an upward trend with values Merlot, Chardonnay, and Sauvignon Continued economic improvement, exceeding previous record highs, and Blanc between Napa and Yountville, and the limited availability of planted and a larger number of properties selling at either Chardonnay or Pinot Noir in Los plantable land, increasing demand and the upper end of the value ranges. The Carneros. pricing for Cabernet, plus increasing de- Premiumization trend discussed in recent Excluding Los Carneros, the trend velopment constraints and restrictions, years for Napa County has gained a firm is to redevelop Sauvignon Blanc, had a positive impact on demand and stronghold in Sonoma County as well. Chardonnay and Merlot vineyards to values for Napa’s Prime and Secondary Pinot Noir and Chardonnay vineyards Cabernet Sauvignon, as the earnings markets in 2017. While demand and potential is nearly double, since wineries are paying near county average prices for the fruit. As with the prime area, the economic returns from traditional varieties supports values close to the plantable land, with modern Cabernet vineyards supporting $230,000 to >$300,000/acre. As new plantings come Central Valley CA/Central Counties into production time will tell if the fruit San Francisco Bay Area/Silicon Valley | Monterey/Carmel quality will continue to command the John Hillas, MAI, SRA Walt Carney, MAI prices currently being paid, if so values 209-569-0450 x7301 408-279-1520 x7145 [email protected] [email protected] will likely stabilize at the higher levels. www.valbridge.com

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 27 in prime locations with established repu- Sonoma and Napa County wineries and After consecutive large grape crops in tations for luxury to cult wine quality large investment groups are the principal 2013 and 2014, 2015 saw a small crop, continue to lead the market. However, the buyers for large commercial vineyards, with an average sized crop in 2016. strong demand for high quality Cabernet with wineries continuing to be a key Growers welcomed heavy winter rains Sauvignon has driven Alexander Valley buyer for large and small vineyard in early 2017, which brought an end vineyard values close to those of prime designate or boutique-style vineyards. to drought conditions throughout the Russian River and Sonoma Coast Pinot Other buyers include local growers region. 2017 saw a normal start to the Noir and Chardonnay values. and investors. season and a good fruit set. The region Sonoma County is now following Napa Vineyard designates (named vineyards) experienced a fairly hot summer, and Valley with prime and secondary area and AVA’s continue to play a greater role some early rains, which culminated classifications due to increased demand in property pricing. There can be sub- in an average sized crop in 2017. The and sales in areas previously identified as stantial value differences within a single wildland fires in early to mid-October outlying. The prime classification defines AVA due to individual micro climates, were a serious concern, but most of the established American Viticultural soils, and grape varieties grown. These the harvest was already in with little Areas (AVA) of Alexander Valley, Dry factors greatly influence grape tonnage concern as to fruit or wine quality. Creek Valley, Knights Valley, Sonoma and quality, which in turn directly There does not currently appear to be Valley, portions of the Sonoma Coast impact net earnings. Additionally, some an oversupply of grapes and continued and the Russian River Valley AVA’s. AVAs are increasingly becoming as- strong demand for both wine grapes and The secondary classification defines sociated with specific varietals, such vineyards is expected. Vineyard viability areas such as the newly established as Alexander Valley with Cabernet remains highly scrutinized and marginal Petaluma Gap AVA and movement to Sauvignon, Russian River Valley with vineyards continue to be purchased at establish vineyards in outlying mountain Pinot Noir and Chardonnay, and Sonoma prices near bare land values. locations within the prime or secondary Coast with Pinot Noir. Vineyard desig- “Non-farm” and “non-local” profes- market areas. This increased demand in nates with registered trademarked names sionals, executives, or business owners secondary areas was a result of plantable are also becoming more common and, remain the principal buyers for proper- land values being relatively inexpensive depending on reputation, can command ties that provide a “lifestyle” element, ($20,000 to $40,000 per acre) in com- premium pricing. such as private view sites in desirable parison to plantable land values in prime locations or properties improved with areas ($70,000 to $100,000 per acre). large estate homes. Lifestyle proper-

28 REGION TWO|NORTH COAST ties have clearly rebounded in value or reductions in production volume Above average rainfall levels this since 2011 and have exceeded previous depending on the dairy’s contract with past winter replenished reservoirs and record highs. their supplier. For 2018, most producers groundwater resources throughout the REGION TWO One Sonoma County winery facility sold anticipate a total loss of about 25% of region, with the 2017 grape crop re- in 2017, in comparison to six selling in gross income from the peak market in flecting above average yields for most 2016. The winery sale supports a stable 2016. Future pricing of organic milk is growers. Most of the grape harvest value trend. Sales of wineries with suc- speculative as long-term effects of the was concluded in early October, so the cessful brands, daily public tasting, and surplus are unknown, and conventional October wildfires had nominal impact locations in primary tourist areas con- milk prices continue to decline. Despite on the 2017 harvest. Anderson Valley tribute values that are near current con- this, land values for organic pasture continued to experience strong demand struction costs. Wineries that sell without increased as dairies are still in need of for Pinot Noir in 2017, with most a recognized brand exhibit normal levels pasture to comply with organic regu- growers receiving prices of $3,500 to of deprecation. Larger facilities (40,000 lations and for farming to offset feed $6,000 per ton, while Inland Mendocino cases or more) are typically discounted costs. This is evidenced by more prop- Pinot Noir was closer to $1,800 per ton. beyond normal levels of depreciation erties selling within the upper end of The demand for Cabernet Sauvignon due to a very limited buyer base. Vested the range rather than an increase in the was exceptionally strong at $2,000 to winery permits for unimproved prop- value range. over $2,400 per ton throughout most erties typically only contribute value Premiums are being paid for proper- of the region. The market price of when the property is in a primary tourist ties that are comprised of multiple legal Chardonnay remained stable at $1,200 to area. Significant premiums are paid for parcels or have the potential to be sub- $1,500 per ton, with some long-term and permits on sites in prime tourist areas divided. For local dairies and livestock pre-plant contracts being offered again. that allow for public tours, tastings, retail producers, the sale of development As Sauvignon Blanc vineyards continue sales, and events, due to increasing gov- rights to conservation organizations has to be replanted to Cabernet Sauvignon in ernment regulations and local opposition provided a means of offsetting the high Napa and Sonoma County, the demand to new or additional winery permits. cost of purchasing pasture. for Sauvignon Blanc in Lake County was exceptionally strong, with most The Sonoma-Marin agricultural area Mendocino & Lake Counties growers receiving prices of $1,100 to is described as coastal foothill pasture $1,500 per ton. The demand and prices and hardwood forested lands within Mendocino County agriculture is for Cabernet Sauvignon in Lake County Southwestern Sonoma County and mostly tied to the vineyard and wine was also very strong, with prices similar Northwestern Marin County. Most of industry. The region has two distinct to Mendocino County or higher, again, the area is devoted to agricultural uses of markets within the county, including with much of the fruit going into Napa livestock pasture and dairies, in addition the coastal Anderson Valley, renowned and Sonoma wine programs. to a limited number of equestrian for high quality Pinot Noir, and Inland facilities, poultry facilities, vineyards, The sales activity throughout Mendocino Mendocino, which produces a wide County in 2017 was modest, with a mix olive orchards, and specialty vegetable variety of premium wine grapes. The production. Average to estate quality of small and mid-sized vineyard sales, short 2011 grape crop throughout most scattered from Potter Valley to Hopland. homes are also positioned throughout of the North Coast region was instru- the area. The residential appeal is attrib- Most average quality vineyards sold in mental in bringing wineries back to the high-$20,000’s, with one good quality utable to the desirable coastal climate, Mendocino and Lake Counties to buy rural foothill settings, and proximity to vineyard selling for around $40,000 per wine grapes. The increased demand has acre. The sale activity in Anderson Valley San Francisco and Bay Area employ- enabled growers to contract their fruit at ment centers. was very limited, which is typical for the good prices for the past several years, area. Anderson Valley vineyards appear Grade A dairies producing organic milk along with reintroduction of preplant to have stabilized, but with continued are the dominant commercial use of the and long-term contracts. area. Low conventional milk prices and high feed costs have resulted in most conventional producers in the region transitioning their herds and facilities to organic milk production. North coast organic dairies have benefitted from substantially higher organic milk prices. The ability to pasture cows, and proximity to Bay Area consumer markets allows for the development of specialty or artisan cheese, butter, and yogurt products. Within the last few years, a surplus of organic milk has resulted in minor to significant drops in price per cwt., and/

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 29 strong demand from Napa and Sonoma generally good fruit size and quality. 2017 an increase in the number of properties County wineries for area vineyards and saw reduced demand from canneries, listed by realtors. This is because sellers fruit. The most recent sales in Anderson with more pears being directed to the are realizing that their properties must be Valley of good quality vineyards have fresh market, with the average market well marketed to garner the best price. sold upwards of $100,000 per acre price declining slightly from their record Agricultural production in the region mostly to wineries out of Sonoma and highs. Most growers received average includes dairying, beef cattle, irrigated Napa County. Inland Mendocino County prices from $350 to around $400 per ton. pasture crops, small truck farms vineyard sales appear to have stabilized The outlook for the industry is somewhat growing organic crops, and a larger in the past year, but with limited market concerning due to reduced demand from nursery operation. Increasingly, dairies activity. The number of vineyard listings the canneries, increasing operating costs, in Humboldt County are converting to in Mendocino County is very limited. uncertainty of affordable and available organic operations. The county’s diaries Lake County like Mendocino has also labor, and new regulations which could tend to be small (200 to 300 cows) seen its agricultural industry centered have a major impact on profitability turn-key operations with the cows on almost exclusively on vineyards and going forward. No established orchards pasture most of the year. High organic wineries. 2017 saw strong yields and sold in Mendocino or Lake County in milk prices relative to lower convention- high-quality wine grapes, attributed to 2017 and no new orchards have been al prices in the past encouraged this tran- 2016’s strong winter rains, which were planted or are scheduled to be planted. sition. Organic operators are interested particularly beneficial in helping the The walnut planting craze appears to in expanding operations and demand for region recover from the wildfires in 2015 have reached Lake County, with some pastureland, particularly in Ferndale. and 2016. The 2017 growing season small developments showing up on the fertile bottomlands. Del Norte County is located on the was characterized as fairly normal Pacific Coast in the extreme northwest with no serious frost, and the since the Humboldt, Del Norte corner of the state. This is a remote area vines weren’t water stressed, they were with over 97% of the land area identi- able to handle the August heatwave & Trinity Counties fied as forestland that is mostly owned with minimal impact on the fruit. The This area overlies the most northern by the federal government. Agricultural market demand for vineyards in Lake portion of Region 2. Historically market activity is limited to the flood plain County remained strong, with a modest sales are few and far between, but like of the Smith River and the adjacent number of sales. Sales in the Big Valley the rest of this region, trends appear to coastal benches. Agricultural production area generally ranged from $25,000 to be positive with very little measurable includes dairying, beef cattle, Easter lily $38,000 per acre, for vineyards typically change noted over the past few years. bulbs and irrigated pasture crops, and producing from 6 to over 7 tons per acre. one nursery operation. Agricultural land Humboldt County is located on the The highest priced vineyards in Lake is closely held and sales activity is very Pacific Coast in the northwestern County were located in the Red Hills limited. Pasture land values range from California, approximately 200 miles and High Valley regions, mostly for high $4,000 (dry) to $6,500 (irrigated) per north of San Francisco. Agriculture is quality, upland Cabernet Sauvignon acre. Easter lily cropland values range tied primarily to dairies, pasture crops, vineyards developed on volcanic soils. from $7,500 to $8,000 per acre. and cattle ranching. This market has Mendocino and Lake County’s pear seen very few sales or significant value Trinity County is located in the Klamath acreage has stabilized in the last few trends over the past ten years. Marked Mountains in northwestern California. years, after years of continued decline. demand for pasture is strong but most This is a remote and very steep area, Most of the remaining orchards are high properties are closely held and seldom with over 95% of the land area being producing and owned by a handful of available for sale. Pastureland sales are forestland that is mostly owned by long-time growers. The 2017 crop was often between a long-term tenant and the the federal government. Agricultural slightly above historical averages, with landlord. In recent years there has been activity is mostly limited to the mountain valleys along the Trinity River, but there are several large cattle ranches located in the southwest corner of the county. Agricultural production includes beef Hal Forcey ARA cattle, range pasture, irrigated pasture, Certied General Real Estate Appraiser and a small number of vineyards. Agricultural land is closely held and FORCEY APPRAISAL sales activity is non-existent. Generally, (707) 484-0866 sales from adjacent counties must be FORCEY [email protected] relied on to value the agricultural land in APPRAISAL Trinity County. Real Estate Appraisal & Consulting Ag Appraisal 5691 Carriage Lane Specialists Santa Rosa, California 95403

30 REGION TWO|NORTH COAST VALUES: LAND AND LEASE LAND USE VALUE PER ACRE ACTIVITY / TREND RENT RANGE ACTIVITY / TREND REGION TWO NAPA COUNTY Vineyards - Prime Napa Valley $300,000 - >$400,000 Strong/Increasing N/A N/A Vineyards - Secondary Napa Valley $120,000 - >$300,000 Strong/Increasing N/A N/A Vineyards - Outlying Napa County $50,000 - >$130,000 Limited/Stable N/A N/A Plantable - Prime Napa Valley $200,000 - >$250,000 Strong/Increasing N/A N/A Plantable - Secondary Napa Valley $50,000 - >$200,000 Strong/Increasing N/A N/A Plantable - Outlying Napa County $25,000 - >$50,000 Limited/Increasing N/A N/A Homesite - Prime Napa Valley $2,000,000 - >$5,000,000 Strong/Increasing N/A N/A Homesite - Secondary Napa Valley $300,000 - >$2,500,000 Strong/Increasing N/A N/A Homesite - Outlying Napa County $0 - >$350,000 Limited/Stable N/A N/A

SONOMA COUNTY Vineyards - Prime $100,000 - $170,000 Moderate-Strong/Increasing N/A N/A Vineyards - Secondary $70,000 - $100,000 Moderate-Strong/Increasing N/A N/A Plantable - Prime $70,000 - $100,000 Moderate-Strong/Stable N/A N/A Plantable - Secondary $25,000 - $40,000 Moderate-Strong/Increasing N/A N/A Homesite - Prime $300,000 - $3,100,000 Moderate-Strong/Increasing N/A N/A Homesite - Secondary $0 - $300,000 Moderate-Strong/Stable N/A N/A Sonoma-Marin Pasture $7,000 - $13,800 Moderate-Strong/Increasing N/A N/A

MENDOCINO COUNTY Vineyards - Anderson Valley $65,000 - $100,000 Limited/Stable N/A N/A Vineyards - Inland Mendocino $22,000 - $40,000 Limited/Stable Plantable - Anderson Valley $25,000 - $35,000 Limited/Stable N/A N/A Plantable - Inland Mendocino $10,000 - $15,000 Limited/Stable N/A N/A

LAKE COUNTY Vineyards - Resistant Rootstock $25,000 - $50,000 Moderate/Stable N/A N/A Plantable Land or Pears $10,000 - $15,000 Limited/Stable N/A N/A

HUMBOLDT COUNTY Dairy Pasture $5,000 - $8,000 Limited/Stable-Increasing N/A N/A

DEL NORTE COUNTY Dairy Pasture $4,000 - $6,500 Limited / Stable-Increasing N/A N/A Irrigated Cropland (Lily Bulbs) $7,500 - $8,000 Limited / Stable-Increasing N/A N/A

North Coast Region Approximately 26% of all the timber for sawlogs. Demand for timberland, harvested in California comes from the particularly redwood timberland, is TIMBER PRODUCTION North Coast Region. Private timberland strong with few properties available for ownership is almost equally divided sale. Increasing stumpage values should Timber production occurs in most of the between large industrial holdings and result in higher timberland values over counties (except for Napa) that comprise small privately-owned tree farms. time. Markets for smaller timberland the North Coast Region. For Humboldt Improvements in the housing market parcels (160 acres and less) are primarily and Mendocino Counties it is a major have led to increased demand and prices driven by marijuana growers. contributor to the local economy.

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 31 32 REGION TWO HISTORICAL VALUE RANGE per acre LAND USE PRIME SECONDARY OUTLYING PRIME SECONDARY OUTLYING

| NAPA COUNTY VINEYARDS NAPA PLANTABLE NORTH COAST 2017 $300,000 - $400,000 $120,000 - $300,000 $50,000 - $130,000 $200,000 - $250,000 $50,000 - $200,000 $25,000 - $50,000 2016 $300,000 - $400,000 $120,000 - $300,000 $50,000 - $120,000 $200,000 - $250,000 $50,000 - $200,000 $25,000 - $50,000 2015 $250,000 - $370,000 $120,000 - $270,000 $50,000 - $120,000 $130,000 - $200,000 $50,000 - $130,000 $25,000 - $50,000 2014 $220,000 - $320,000 $100,000 - $220,000 $50,000 - $100,000 $100,000 - $190,000 $50,000 - $100,000 $25,000 - $50,000 2013 $200,000 - $300,000 $100,000 - $200,000 $50,000 - $100,000 $100,000 - $175,000 $50,000 - $100,000 $25,000 - $50,000 2012 $200,000 - $300,000 $100,000 - $200,000 $50,000 - $100,000 $100,000 - $150,000 $50,000 - $100,000 $25,000 - $50,000 2011 $225,000 - $300,000 $90,000 - $165,000 $35,000 - $75,000 $100,000 - $175,000 $50,000 - $100,000 $30,000 - $50,000 LAND USE LAND USE PRIME SECONDARY OUTLYING NAPA HOME SITES 2017 $2,000,000 - $5,000,000 $300,000 - $2,500,000 $0 - $350,000 2016 $2,000,000 - $5,000,000 $300,000 - $2,500,000 $0 - $350,000 2015 $1,000,000 - $5,000,000 $250,000 - $1,000,000 $0 - $350,000 2014 $1,000,000 - $5,000,000 $250,000 - $1,000,000 $0 $350,000 2013 $1,000,000 - $5,000,000 $250,000 - $1,000,000 $0 - $350,000 2012 $1,000,000 - $5,000,000 $250,000 - $1,000,000 $0 - $350,000 2011 $1,000,000 - $3,000,000 $250,000 - $1,000,000 $0 - $350,000 LAND VINEYARD: PLANTABLE LAND HOMESITE VINEYARD: PLANTABLE LAND USE RESISTANT ROOTSTOCK (or Old Vines) CONTRIBUTION RESISTANT ROOTSTOCK (or Pears) DAIRY PASTURE PASTURE

SONOMA COUNTY LAKE COUNTY HUMBOLDT SONOMA/MARIN 2017 $70,000 - $170,000 $25,000 - $100,000 $0 - $3,100,000 $25,000 - $50,000 $10,000 - $15,000 $5,000 - $8,000 $7,000 - $13,800 2016 $90,000 - $170,000 $45,000 - $100,000 $0 - $3,100,000 $25,000 - $50,000 $8,000 - $14,000 $5,000 - $7,800 $6,000 - $13,800 2015 $70,000 - $150,000 $45,000 - $100,000 $0 - $3,100,000 $25,000 - $50,000 $8,000 - $12,000 $5,000 - $7,800 $6,000 - $13,800 2014 $60,000 - $125,000 $35,000 - $85,000 $0 - $3,100,000 $25,000 - $50,000 $8,000 - $12,000 $5,000 - $7,800 $4,500 - $11,200 2013 $60,000 - $125,000 $35,000 - $80,000 $0 - $3,100,000 $20,000 - $36,000 $6,000 - $10,000 $5,000 - $7,500 $4,500 - $10,500 2012 $60,000 - $125,000 $35,000 - $80,000 $0 - $3,100,000 $15,000 - $35,000 $4,000 - $8,500 $5,000 - $7,500 $4,500 - $8,500 2011 $60,000 - $140,000 $32,500 - $75,000 $0 - $3,100,000 $10,000 - $22,000 $3,500 - $7,000 $5,000 - $7,500 $4,500 - $7,500 LAND VINEYARD: VINEYARD: PLANTABLE: PLANTABLE: USE ANDERSON VALLEY INLAND MENDOCINO ANDERSON VALLEY INLAND MENDOCINO DAIRY PASTURE CROPLAND (Lily Bulbs)

MENDOCINO COUNTY DEL NORTE 2017 $65,000 - $100,000 $22,000 - $40,000 $25,000 - $35,000 $10,000 - $15,000 $4,000 - $6,500 $7,500 - $8,000 2016 $65,000 - $100,000 $22,000 - $40,000 $25,000 - $35,000 $10,000 - $15,000 $3,500 - $6,000 $7,500 - $8,000 2015 $65,000 - $100,000 $22,000 - $40,000 $25,000 - $35,000 $10,000 - $14,000 $3,500 - $6,000 $7,500 - $8,000 2014 $65,000 - $100,000 $22,000 - $35,000 $25,000 - $35,000 $10,000 - $14,000 $3,500 - $6,000 $7,500 - $8,000 2013 $65,000 - $95,000 $22,000 - $30,000 $25,000 - $35,000 $8,000 - $11,000 $3,500 - $6,000 $7,500 - $8,000 2012 $65,000 - $85,000 $15,000 - $30,000 $25,000 - $30,000 $7,500 - $10,000 2011 $35,000 - $55,000 $12,000 - $20,000 $15,000 - $28,000 $7,000 - $11,000

REGION TWO 33 1 1 7 5 3 7 5 3

201 201 2007 201 201 201 201 201 201 2009 2005 2009 2005 2001 2001 $0 2007 2003 $0 2003 1999 1999 1997 1995 1993 1997 1995 1993

$2,000 $2,000

$4,000 $4,000

$6,000 $6,000

$8,000 $8,000

in Agricultural Land & Lease Values Agricultural Land & Lease in 0 $10,00 $10,000 ®

0 $12,00 $12,000

E PASTUR PASTURE $14,000 $14,000

2018 TRENDS y Dair Humboldt n Sonoma-Mari

$16,000 $16,000 1 1 3 7 5 3 7 5 3 7 5 3 7 5 1 1

201 201 2007 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 2001 2001 2001 2001 201 201 2007 2007 2007 2003 2003 2003 $0 $0 2003 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993

nd la In

$20,00 0 $20,000

ey ll Va on rs de An

$40,00 0 $40,000

$60,00 0 $60,000

$80,00 0 $80,000

ey ll Va on rs de

An www.calasfmra.com

$100,000 $100,000

D VINEYAR PLANTABLE LAND PLANTABLE PLANTABLE LAND PLANTABLE D VINEYAR

y Count Mendocino y Count Mendocino y Count Lake y Count Lake

$120,000 $120,000

3 7 5 3 7 5 3 7 5 3 7 5 1 1 1 1

$0 201 $0 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 2001 2001 2001 2001 201 201 2007 201 2007 201 2007 2007 2003 2003 2003 2003 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993

Outlying

$50,000 $50,000

ndary Seco

$100,000 $100,000

e Prim ndary Seco

$150,000 $150,000

$200,000 $200,000

e Prim $250,000 $250,000

$300,000 $300,000

VINEYARD PLANTABLE LAND PLANTABLE VINEYARD PLANTABLE LAND PLANTABLE $350,000 $350,000

y Count Napa y Count Napa y Count Sonoma y Count Sonoma

$400,000 $400,000 34 REGION TWO REGION TWO www V Al Connor ice Pr .axa-equitable-ag.com | esident NORTH COAST W [email protected] alnut Gr ove, CA P 209 581-5645 .O. Box1035 95690 119 S. CloverdaleBlvd. CloverdaleCA95425 [email protected] David Holt Real Estate o: c: 707894-9576 707486-7390 Certified General MAI, ARA Appraiser REGION THREE|NORTHERN SAN JOAQUIN

Region Chair and Committee Kary Griffith - CHAIR Richard A. Bell, ARA Mary Ann Dores Jerry A. Furtado, ARA Tiffany Holmes, ARA Jeff Myers Brian Sousa

General Comments For Region 3, 2017 was noted for its record-setting rainfall in Region 3 create legislation in response to the State’s groundwa- the winter and spring and relatively stable commodity prices, ter sustainability plan (SGMA), some potential land uses have which were much lower than those enjoyed in previous years. been eliminated, slowing demand for certain properties. Land values remained mostly stable; however, sales activity in Very few dairy sales occurred in 2017 in Region 3 and primarily most parts of Region 3 slowed, compared to the past few years. consist of small facilities with a small land base. While some Drought-stricken California enjoyed an extremely wet winter dairy facilities were purchased for continued use as a dairy, the and spring in 2017, which filled—and in some cases over- majority were either purchased for their land, utilized as a heifer filled—local reservoirs. However, marginal rainfall through feedlot or converted to a goat dairy. The market is expected to late 2017 has returned worries that water district allocations remain stable in 2018 for larger, modern dairy facilities. will be limited for the 2018 irrigation season. Although the pub- licized concern over water availability quieted, pending legislation still looms. The State’s plan to take 40% of unimpaired flows from the Stanislaus, Tuolumne and Merced Rivers, with a strong potential to impact future deliveries from the historically strong east-side districts, has created some uncertainty in these markets and led to a slowdown in sale volume. As counties in

36 REGION THREE|NORTHERN SAN JOAQUIN VALLEY ALMONDS correction allowed the market to settle typically fall between 18% and 30% of into a new normal and, in 2017, the gross income to the landlord, with the Region 3 accounts for 32% of market became more sensitive to tenant responsible for all development California’s almond acreage at ap- orchard quality as average and good- costs at the low end of the range and the proximately 267,700 acres. Almonds quality orchards remained profitable, but landlord paying all development costs at remain the most profitable commodity in below average to poor-quality orchards the high end of the range. Leases typically Stanislaus and San Joaquin Counties and REGION THREE became unprofitable. Lower-quality run for 20-30 years. For larger tracts in the second most profitable commodity in orchards were purchased for redevelop- the eastern part of the region, lease rates Merced County. California’s estimated ment or at a deep discount, responsive range from 8% to 20% of gross income almond production in 2017 was 2.2 to low production. The upper end range to the landlord, as a water source must billion pounds and, with approximately for almond sales is defined by young and typically be developed. Tenants bear this 10% of the state’s acreage still non-bear- productive orchards with reliable irriga- cost at the low to mid points of the range, ing, the industry estimates that it will tion sources, while the lower end of the while the landlord may share in this cost have to market a 3-billion-pound crop in range is defined by low-quality orchards at the high end of the range. Leases may five years. in federal water districts. be shorter in duration in this area, partic- With very little rainfall experi- While orchards are typically owner- ularly when the landlord is responsible enced through Fall 2017, growers are operated in the region, leasing is still for well development. concerned that the supply of water for common for smaller orchards owned the 2018 crop will be limited. by elderly or non-farmer rural residents, Almond commodity prices remained and increasingly common for larger stable in 2017 with a slight increase tracts developed in the eastern pasture toward the end of the year; however, areas. Leases vary widely in structure, the prices are much lower than those but for smaller in-district properties they experienced prior to 2015. The price

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www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 37 WALNUTS CHERRIES stable through most of the harvest and labor was available. One known cherry Like almonds, walnut commodity As with much of the more perishable and sale occurred in 2017, which supported prices remained stable in 2017 and this labor-intensive tree fruit in Region 3, stable values, well above the value supported stable orchard values through- cherries can be very profitable for those of open ground. The market for these out the year. Sale activity decreased who are willing to undertake the risks orchards is stable due to demand from compared to the prior year. Very few required to grow them. After several established growers willing to expand. sales of walnut orchards occurred in years of rain-damaged crops, 2017 was The primary cherry-growing areas in 2017 with the majority of sales being a much-needed year of relief for most Region 3 are in San Joaquin and Contra low-quality orchards being sold for re- cherry farmers. For the 2017 harvest Costa Counties. development. Walnuts continue to be season, yields were high, prices held a popular crop diversification choice for area growers, as sales reflect mixed plantings of almond and walnut acreage. Walnut orchards are more typically owner-operated, but as with almonds some are leased. Walnuts are typically farmed on in-district acreage and are structured similar to in-district almond leases.

38 REGION THREE|NORTHERN SAN JOAQUIN VALLEY WINE GRAPES the slightly smaller crop size, wineries Joaquin County). There were no known will be better able to make further re- sales in Districts 6 and 10, but continued Due to extremes in weather patterns, ductions in the large carryovers from profitability in these districts have the 2017 grape growing season was previous years and help keep supply led to a stable vineyard market. The one of the more challenging years in and demand strong. A growing trend in primary grape-growing area of District recent memory. Many areas dealt with the Lodi area is the removal of older, 10 lies within the Shenandoah Valley flooding of vineyards in late winter to REGION THREE head-trained varieties such as Old Vine of Amador County and the southern El early spring, making it difficult to get Zinfandel. The increasing cost of hand- Dorado County area, with wineries also equipment into vineyards to carry out labor to harvest this varietal is causing concentrated in Murphys (Calaveras necessary cultural practices. The tran- this to potentially be a non-economically County) and Apple Hill (El Dorado sition into summer came with a series viable crop for the region, long known as County). District 11, which includes of heat waves of 100-plus degrees the Zinfandel capital of California. the Lodi area, experienced moderate throughout the summer months, causing sales activity primarily of smaller 30 to problems with achieving optimum sugar The wine grape vineyard category 60-acre vineyards, reflecting continued levels and shriveling of bunches during includes various California Grape consolidation. There was strong demand a delayed harvest season. Overall, Pricing Districts, which include District for commercial wine grape vineyards as the crop size is considered average to 6 (Contra Costa County), District 10 well, with moderate sales activity and slightly below average and well below (Amador, El Dorado & Calaveras stable prices. 2016 levels. However, the 2017 vintage Counties), and District 11 (southern is expected to be of good quality. With Sacramento County and northern San

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 39 RANGELAND For Stanislaus and Merced Counties, land. However, no regulations have yet pressure to purchase property for been adopted for San Joaquin County. Sale activity for rangeland was limited permanent planting development on Although sale activity was limited for in 2017, but shows a stable trend. lower-elevation rangeland in the eastern this category in 2017, former rangeland Traditionally, values for rangeland portions of the counties has ceased, due is still being purchased east of Acampo suitable for grazing in the south and to new local regulations and in response for vineyard development, and some west portions of the region define the to SGMA. Both counties passed ground- sales near Clements and east of Linden low end of the range, while rangeland in water ordinances during the height have occurred for almond or walnut de- the north and east portions of the region of the recent drought that prohibit velopment. Traditionally, the upper end (with higher rainfall and better access permits for new wells on land with no of the range is defined by smaller parcels to populated areas) define the high end surface water rights to replenish the with more gentle topography, while of the range. Size and the presence of aquafer. For non-district land with no the lower end of the range is defined conservation easements also influence wells already permitted or developed, by larger parcels with more rolling, value, with smaller, unencumbered the ordinances have rendered the land steep topography. parcels defining the high end and larger, unable to support permanent plantings, encumbered parcels defining the low end essentially eliminating this category of of the range. Smaller parcels purchased primarily for home sites were not included in the indicated range.

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40 REGION THREE|NORTHERN SAN JOAQUIN VALLEY CROPLAND of strong irrigation districts, despite farmers with nearby land holdings and good groundwater resources available. means to convey well water to these In the north portion of Region 3, properties. cropland is separated into three geo- In the central and southern portions of graphical submarkets. The lower end Region 3, cropland is divided by water Although most annual irrigated cropland of the range is defined by Delta Land source. Land located in districts with leases in Region 3 range from $150 to

(islands and bordering cropland) that has the strongest water rights, lowest water $500 per acre, annual leases for sweet REGION THREE limited permanent planting adaptability, costs and best delivery histories (east potatoes in the sandy soil areas of while the high end is defined by cropland side districts) commanded the highest northern Merced Irrigation District and on highly productive soils in the central price. Cropland in non-federal west side a small portion of southern Turlock areas adaptable to high-value plantings districts (Exchange Contractors) define Irrigation District can range up to $700 such as almonds, walnuts, wine grapes the middle of the range, as this land to $1,000 per acre due to strong com- and cherries. Cropland in the Delta area received full water deliveries at relatively petition. Similarly, land within South continued to gain demand for growers inexpensive prices, most with sufficient San Joaquin Irrigation District can show looking for a lower-cost alternative for supplemental groundwater availabil- annual lease rates up to $600 to $1,000 land adaptable to growing permanent ity. Land in federal west side districts per acre, where tenants seeking land plantings with strong water rights. Values were given 100% of their full water al- suitable for strawberry plants and other on land in the Delta slightly increased location in 2017, after receiving 5% in specialty truck crops compete with the from the prior year. The Lodi region 2016 and 0% in 2015 and 2014. Farmers area’s almond farmers. As the normal cropland remained stable, reflecting its predict that a 100% allocation may never cycle of almond orchard redevelopment wine grape influence, with less cropland happen again and typically, these prop- returns, it is expected that the supply of selling and less speculation along the erties are supplemented by deep wells land available for rent in this area will margins of the area, which brought up in order to provide an adequate source increase, resulting in a softening of this the lower end of the value range. The of irrigation water. There was a spike in rental market. However, no such trends Northern San Joaquin County cropland demand in 2017, mainly in Del Puerto have yet been observed. category stabilized in value as buyers Water District, for properties which recognized greater risk in areas outside were primarily purchased by expanding

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www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 41 DAIRY volatility, while low end producers were purchased to continue as dairies, at continue to grapple with debt accumu- least in the interim; and (3) approximate- Overall, the market for dairy facilities in lated from 2009. ly 20% were purchased to raise heifers or 2017 remained stable in Region 3 with convert to a goat dairy. limited sale activity. Most of the U.S. Region 3 had fewer herd dispersals in and international markets saw increased 2017 as most dairy facilities that sold were Dairymen faced less competition from milk supplies in 2017, except California, either already vacant or being purchased permanent planting developers in 2017, which saw milk production down nearly for continued operation as a dairy or due to softened nut prices; yet, land 2% after a long, hot summer. Although heifer feedlot. All of the dairy sales in values remained stable. Larger dairies milk prices were up 11% per cwt on 2017 were in Stanislaus and Merced in the region remain stable and continue average, near breakeven levels, it was Counties, and consisted of smaller facili- to drive their own profitability by con- not enough to make 2017 a profitable ties between 300± and 700± milk cows solidating smaller dairies. Current trends year. Successful dairies continue to trend with 25 to 213 acres of land. Region 3’s are expected to continue if not worsen at toward efficient, well managed, and di- dairy sales in 2017 fell into three catego- least through the first quarter of 2018 due versified operations. Those with quota ries: (1) nearly 50% were purchased to to lower milk prices. and enough land base to grow their own either develop to permanent plantings or feed are found to better-withstand pricing grow forage crops; (2) around one-third

42 REGION THREE|NORTHERN SAN JOAQUIN VALLEY VALUES: LAND AND LEASE LAND USE VALUE PER ACRE ACTIVITY / TREND RENT RANGE ACTIVITY / TREND Almonds $20,000 - $40,000 Moderate/Stable 18% - 30% Limited/Stable Walnuts $20,000 - $35,000 Limited/Stable 20% - 30% Limited/Stable

Cherries $28,000 - $36,000 Limited/Stable 25% - 30% Very Limited/Stable REGION THREE Wine Grapes: Districs 6, 10 & 11 $24,000 - $42,000 Limited/Stable 15% - 35% Moderate/Stable Rangeland: Permanent Planting Potential $8,400 - $15,000 Very Limited/Stable N/A - N/A N/A Rangeland: Grazing Only $600 - $3,000 Limited/Stable $10 - $35 Limited/Stable

CROPLAND NORTH: NORTH SAN JOAQUIN, CONTRA COSTA & SACRAMENTO COUNTIES N. San Joaquin Co (Well Water, SEWD, CSJWCD) $11,500 - $22,000 Limited/Stable $300 - $400 Very Limited/Stable Lodi Region (Well Water and Woodbridge ID) $18,000 - $24,000 Limited/Stable $350 - $450 Very Limited/Stable Delta (Various Small Districts and Well Water) $8,500 - $18,000 Moderate/Increasing $250 - $400 Limited/Stable

CROPLAND CENTRAL: SOUTH SAN JOAQUIN & STANISLAUS COUNTIES Eastside Districts (SSJID, OID, MID, TID) $22,000 - $32,000 Moderate/Stable $250 - $1,000 Moderate/Stable West Side Non-Fedral Districts (incl. Gustine) $20,000 - $26,000 Limited/Stable $300 - $400 Moderate/Stable Federal Districts and Well Water $10,000 - $18,000 Limited/Stable $150 - $300 Moderate/Stable

CROPLAND SOUTH: MERCED COUNTY Merced ID $14,000 - $30,000 Moderate/Stable $200 - $1,000 Moderate/Stable Well Water, Westside Non-Fed, Class II MID/CWD $12,000 - $20,000 Limited/Stable $200 - $400 Moderate/Stable West Side, Federal District and Well $5,000 - $10,000 Limited/Stable $125 - $200 Moderate/Stable

DAIRIES Dairies (per lactating cow - without underlying land) $1,100 - $2,400 Very Limited/Stable $12 - $18 Limited/Stable

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CHERRIES $28,000 - $36,000 $30,500 - $36,000 $30,500 - $36,000 $32,000 - $36,000 $25,000 - $38,000 $25,000 - $38,000 $25,000 - $35,000

DAIRIES WINE GRAPES $700 - $2,500 $650 - $1,950 $500 - $2,500 $600 - $2,300 $1,100 - $2,400 $1,200 - $2,400 $1,200 - $2,400 $1,200 - $2,400 $24,000 - $42,000 $28,000 - $35,000 $22,000 - $35,000 $15,000 - $32,000 $15,000 - $32,000 $15,000 - $33,000 $12,000 - $35,000 per Milk Cow with Equipment MERCED, STANISLAUS & SAN JOAQUIN CO. STANISLAUS MERCED,

WALNUTS DELTA LANDS DELTA & WELL WATER DISTRICTS & WELL FEDERAL DISTRICTS WESTSIDE: FEDERAL $8,500 - $18,000 $8,500 - $22,000 $8,000 - $16,000 $7,000 - $12,000 $6,000 - $10,000 $4,000 - $10,000 $3,500 - $ 8,000 $5,000 - $12,500 $5,000 - $12,500 $5,000 - $10,000 $5,000 - $10,000 $5,000 - $8,000 $4,000 - $8,000 $4,000 - $7,500 $4,000 - $7,500 $3,500 - $5,500 $3,500 - $5,500 $20,000 - $35,000 $23,000 - $35,000 $22,000 - $40,000 $20,000 - $40,000 $15,000 - $31,000 $15,000 - $26,000 $14,000 - $25,000 $10,000 - $18,000 $10,000 - $22,000 $12,000 - $22,000 $15,000 - $18,000 $15,000 - $18,500 (Small Districts & Well H20) (Small Districts & Well RANGELAND LODI REGION LODI $600 - $3,000 $600 - $3,000 $500 - $3,500 $500 - $3,300 $500 - $3,300 $500 - $2,000 $500 - $2,000 $7,000 - $15,000 $7,000 - $12,000 $5,000 - $11,000 $5,000 - $11,000 $18,000 - $24,000 $18,000 - $24,000 $13,000 - $24,000 $10,500 - $17,500 $11,000 - $15,000 $11,000 - $15,000 $11,000 - $15,000 $20,000 - $26,000 $20,000 - $30,000 $20,000 - $31,000 $15,000 - $20,000 $15,000 - $18,000 $13,000 - $15,500 $10,000 - $15,000 $12,000 - $20,000 $12,000 - $22,000 $14,000 - $22,000 $10,000 - $20,000 WELL WATER, WESTSIDE WELL WATER, WESTSIDE NON-FEDERAL HISTORICAL VALUE RANGE per acre HISTORICAL VALUE (Woodbridge ID & WELL H20) (Woodbridge DISTRICTS (includes Gustine) NON-FEDERAL, CLASS II MID & CWD

- $24,000 - $15,000 - $21,000 - $18,000 ALMONDS MERCED ID N. SAN JOAQUIN CO $8,000 - $24,000 $8,000 - $16,000 $8,000 - $15,000 (SSJID, OID, MID, TID) MID, OID, (SSJID, EAST SIDE DISTRICTS $8,000 $20,000 - $40,000 $22,000 - $42,000 $22,000 - $45,000 $16,500 - $37,000 $15,000 - $31,000 $14,000 - $30,000 $11,500 - $22,000 $13,000 - $24,000 $17,000 - $30,000 $15,000 - $27,000 $10,000 - $20,000 $10,000 - $20,000 $22,000 - $32,000 $22,000 - $37,000 $22,000 - $35,000 $17,000 - $32,500 $14,000 - $24,000 $10,000 - $24,000 $14,000 - $30,000 $15,000 - $32,000 $17,000 - $31,000 $12,000 - $24,000 $12,000 $10,000 $10,000 (SEWD, CSJWCD & WELL H20) (SEWD, USE LAND USE & MERCED COUNTIES SAN JOAQUIN, STANISLAUS 2017 2016 2015 2014 2013 2012 2011 LAND CROPLAND: NORTH 2017 2016 2015 2014 2013 2012 2011 LAND CROPLAND: CENTRAL 2017 2016 2015 2014 2013 2012 2011 LAND USE CROPLAND: SOUTH 2017 2016 2015 2014 2013 2012 2011 2010 USE

44 REGION THREE|NORTHERN SAN JOAQUIN VALLEY REGION THREE 45

7 5 3 7 5 3 1 1

$0 $0 2003 2003 2005 2005 201 201 2009 201 201 201 201 2009 2007 2007 201 201 2001 2001 1999 1997 1995 1993 1999 1997

$1,000 $1,000

$2,000 $2,000

$3,000 $3,000

in Agricultural Land & Lease Values Agricultural Land & Lease in ®

$4,000 $4,000

& San Joaquin Counties Joaquin San &

Merced, Stanislaus Merced,

$5,000 $5,000 (per milk cow) milk (per

2018 TRENDS DAIRIES RANGELAND

$6,000 $6,000

7 5 3 7 5 3 7 5 3 7 5 3 1 1 1 1

$0 2003 2003 $0 2005 2005 2003 2003 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 201 201 201 2009 201 2007 201 2007 201 2007 201 2007 2001 2001 2001 2001 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993

$5,000 0 $5,00

$10,000 0 $10,00

$15,000 0 $15,00

$20,000 0 $20,00

$25,000 0 $25,00

$30,000 0 $30,00

www.calasfmra.com

$35,000 0 $35,00

$40,000 0 $40,00

S CHERRIE WALNUTS ALMONDS WINE GRAPES WINE

$45,000 0 $45,00

3 7 5 7 5 3 3 7 5 1 1 1

$0 2003 $0 2003 2003 201 2009 2005 201 201 201 201 201 2009 2005 201 2009 2005 201 201 201 2007 201 201 2007 2007 2001 2001 2001 1999 1997 1995 1993 1999 1997 1995 1993

West Side-Well & Federal & Side-Well West

0 $5,00 0 $5,00

l Federa & a Delt

l Side-Wel West

0 $10,00 0 $10,00

e Sid West e Sid West

Lodi Region Lodi

Non-Federal Non-Federal

0 $15,00 0 $15,00

General Merced ID Merced

$20,000 $20,000

$25,000 $25,000

s District Side East

$30,000 $30,000

$35,000 $35,000

CROPLAND - NORTH - CROPLAND CROPLAND - CENTRAL - CROPLAND CROPLAND - SOUTH - CROPLAND

$40,000 $40,000 Jason DurJava, ALC CAL BRE #01310142 cell (209) 604-5672 [email protected] www.aglandconsultants.com

Buying Selling Investments Consulting Milk Pool Quota Buy or Sell Values Farms Ranches Dairies

46 REGION THREE|NORTHERN SAN JOAQUIN VALLEY REGION THREE 47

in Agricultural Land & Lease Values Agricultural Land & Lease in ® S staff are accredited S staff are accredited 2018 TRENDS Brent A. Reed A. Brent Senior Acquisitions Manager, Pacific Coast (559) 562-1500 [email protected] CarlEvers,B. AFMJr., President 410-7880 (209) [email protected] AFM Hutson, Mark ViceSenior President 410-7884 (209) [email protected] , is a leading global farmland investment farmland , is a leading global vities. A number of HF vities. A number of y permanent and row crop farmland throughout throughout y permanent row crop farmland and HAIG) ( HFS provides budgeting, budgeting, HFS provides throughout the U.S. www.calasfmra.com is a division and our of HAIG property manager, integrated agriculture consultants. Hancock Agricultural Investment Group AgriculturalHancock Investment farm managers or accredited the U.S., Australia and Canada. Australia the U.S., Services (HFS) Hancock Farmland of our farmland assets overseeing the majority and direct farming acti oversight, lease negotiations The HancockThe Group Investment Agricultural 300,000 acres of high-qualit manager overseeing Christina Way mai, ai-grs Bruce E. Way

P.O. Box 67 Hughson, CA 95326 Office: 209-883-2796 Appraisal Reviews, Litigation Support Mark Peterson, AFM, ARA, AAC and Appraisals Agricultural 55 Industrial Commercial Special Purpose Properties Over 30 years of experience in STATE CERTIFIED REAL ESTATE APPRAISERS agricultural real estate investments in the areas of finance, management, purchases, and sales.

Recent engagements include: •Financial advisor for the construction of 600 cow robotic dairy barn

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•Real estate and loan brokerage services for strawberry and vegetable growers

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48 REGION THREE|NORTHERN SAN JOAQUIN VALLEY REGION THREE 49 l DIRECT CELL 559.447.6261 559.281.3338 .com G.R.I.

X OFFICE FA in Agricultural Land & Lease Values Agricultural Land & Lease in ® Walt Carney, MAI 408-279-1520 x7145 [email protected] Vice President arson@pearsonrealty 559.432.6200 559.432.2938 cl 2018 TRENDS arm Lands Department CRAIG LARSON, Senior F www.valbridge.co .com Suite 101 Central Valley CA/Central Counties Ave, alm 209-569-0450 x7301 P CA 93711 [email protected] John Hillas, MAI, SRA .pearsonrealty San Francisco Bay Area/Silicon Valley | Monterey/Carme resno, 7480 N. www F www.calasfmra.com r 2/27/2018 2:07:47 PM reet VICES CA License #0L25066 209-367-2444 209-263-2194 ce Agent/Owner cell: 123 N. 7th St ax (209) 892-0885 CA License #0A45068 atterson CA 95363 office: F P Cell (209) 601-0418 [email protected] ance Sour [email protected] William D “Bill” Hooble William D

nsur op I our Cr Y ©2018Farmers Merchants & Bank ofCentral California. All rights reserved. Manager SVP, Lodi Market SVP, Full Service 1916 since Full Banking Community Mickie Nuss HOOBLER INSURANCE SER HOOBLER INSURANCE MSR 6072 ASFMRA_MNuss_BC_Ad_02.26.18_ER.indd 1 50 REGION THREE REGION THREE | NORTHERN SANJOAQUIN VALLEY REGION FOUR|CENTRAL SAN JOAQUIN

Region Chairs Jaime Bigham, ARA - CO-CHAIR Kristin Massetti, ARA - CO-CHAIR

FRESNO | MADERA REGION FOUR|CENTRAL SAN JOAQUIN REGION FOUR

General Comments TREE NUT ORCHARDS Demand for agricultural properties in Region 4 continued to Sale activity among tree nut orchards was moderate to limited decline in 2017 correlating with softening commodity prices. in 2017. The decline in commodity prices witnessed in 2016 The region experienced several years of increasing value trends resulted in a decline in land values, with stabilization achieved through the beginning of 2016; however, the overall trend for in 2017. West side almond sales located in the federal districts 2017 is described as slightly declining. Sale data for open land indicate substantially softer values as compared to East side and permanent plantings are generally moderate to very limited properties. The low end of the value range represents these throughout Fresno and Madera Counties, with a decrease in west side transactions, with prices ranging from $11,000 per inventory, extended marketing periods and some languishing acre to $17,500 per acre for mature almond orchards. The soft properties noted. Stronger water areas with reliable and inex- prices are a direct reflection of the water conditions on the west pensive surface water deliveries supplemented by pumps and side and the inability to apply marginal ground water without wells enjoy the strongest demand, with active buyers. Federal blending. The bottom of the west side range reflects orchards water districts and properties without a district water supply lacking supplemental water sources. East side sales indicate have experienced the sharpest decline in values with significant stronger pricing, with 2017 transactions stabilizating between water concerns associated with the Sustainable Groundwater $22,000 and $37,000 per acre for almond orchards in Fresno Management Act. and Madera Counties. These values generally parallel nut Sale activity for dairy facilities continued to be very limited orchard values seen in other areas of the central San Joaquin in 2017 with very few known sales within Region 4. Although Valley. The low end of the value ranges are representative of milk prices continued to be low in 2017, value trends for dairy old orchards in fair to poor condition and/or orchards that have facilities throughout the Central Valley remained stable in 2017 arrived at the end of their economic lives. Young, good quality as a result of interest in the underlying land from permanent orchards with reliable water sources represent the top of the planting growers. reported value range.

52 REGION FOUR|CENTRAL SAN JOAQUIN VALLEY REGION FOUR 53 CITRUS © 2018 METLIFE, INC. © 2018 METLIFE, INC. in Agricultural Land & Lease Values Agricultural Land & Lease in ® Agricultural Finance Agricultural 2018 TRENDS Sales of citrus groves in Fresno County Fresno in groves citrus of Sales the limited in 2017; however, remained demand is stable. Strongest value trend crops for specialty citrus is noted and/ Mandarins, Clementines including increase significant A or Blood varieties. has been noted in mandarin acreage years. Navels and over the past several also experienced have varieties lemon acreage with an increase in bearing The low Valencias. declines noted in of older end of the range is characteristic varieties, indicating groves with inferior open with consistent generally values of these older land values. Most buyers to farm them for groves will continue the short term and redevelop the land to desirable citrus varieties in more newer, the near future. - - Farm, ranch and agribusiness loans Farm, structuring terms and Flexible stability and strength Financial • • • www.calasfmra.com TREE FRUIT ORCHARDS TREE Although the sale activity among tree the sale activity among Although in Fresno was very limited fruit orchards trend value overall the 2017, in County proper tree fruit orchard is stable. Most ties consist of numerous fruit varieties, of numerous fruit ties consist favor with packers/ some of which are in As that are not. consumers and others has histor for tree fruit demand such, the more by location ically been influenced rather and general land characteristics, The 2017 crop year than orchard quality. most growers due to was profitable for low end The prices. strong commodity typically represents of the value range are varieties fruit tree whose orchards or are located in not in high demand secondary tree fruit markets. In most markets, the low end of the range tends to parallel open land value as buyers typically redevelop the orchards to new tree fruit varieties or other permanent plantings. - The tree fruit industry has been con solidated into the control of a few large have operations smaller Many entities. verti- sold their orchards to these larger, cally integrated entities. www.metlife.com/ag Competitive interest rates interest Competitive rate and adjustable fixed Long-term financing mortgage • attractive—contact are Rates today. us | 559.435.0206 Quality agricultural real estate loans for more than 100 years. than 100 more loans for estate agricultural real Quality • Your lenderof choice ranch for farm, Your and agribusiness capital Activity for pistachio orchards continued continued orchards pistachio for Activity a rel- supports 2017, but limited in to be pistachio value trend; the atively stable the sharp not experience market did in market almond the in noted decline of values for pistachios The range 2016. distinct to $36,000, with is $17,000 versus paid for immature differences side pistachio de- West mature orchards. declined as signifi- velopments have not primarily due to the cantly as almonds, water marginal of tolerance pistachio’s end of the range The low quality. is reflective of in Madera County on non-resistant older orchards planted most recent transac- rootstocks, with the decline in tions indicating a continuing Very to early 2016. values as compared high water costs are also associated with these older pistachio blocks in Madera older these of number sizable A County. orchards remain in Madera County but few exist in Fresno County. There continue to be a high number of - new almond and pistachio orchard devel opments planted throughout Fresno and Madera Counties, as well as throughout Valley. the central San Joaquin VINEYARDS Activity among raisin, table, and wine grape vineyards was very limited to strong in 2017, depending on vineyard type. The majority of the activity involved traditional raisin producing vineyards in Fresno and Madera Counties. Strong activity occurred in Fresno County and limited activity occurred in Madera County; however, many of these vineyards were purchased with the intention of removing the vineyard and redeveloping the land to an alternate permanent planting. The value trend for raisin grape vineyards is generally stable with a reported range of $20,000 to $30,000 per acre. The middle to high end of the value range is representative of vineyards with average to above average production. Vineyards with below average production represent the lower end of the value range, which is typically consistent with open land values. Buyer motivation for raisin grape vineyards is often for redevelopment to nut crops.

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54 REGION FOUR|CENTRAL SAN JOAQUIN VALLEY Wine grape vineyard sale activity CROPLAND to be tightly held by multi-generational continued to be very limited in 2017 farming families who recognize the The sale activity for cropland in all with an overall slightly decreasing value benefit of the reliable and inexpensive markets in Fresno and Madera counties trend. The data available suggests a water supplies these districts enjoy. ranged from moderate to very limited, trend similar to the raisin industry with Buyers in these markets tend to be neigh- with stable to slightly decreasing value the demand for land in general being boring land owners who would like to trends observed. In the USBR markets of the primary force. Commodity prices expand their operations. The Exchange the westside of Fresno County, a slight for wine grape varieties continue to be Contractor districts provide water decline was noted, with the overall range soft with many growers struggling stability lacking in the USBR districts; reported between $4,000 per acre and to find good prices or buyers for however, extended market periods have $9,000 per acre. Open land lacking a REGION FOUR un-contracted vineyards. been noted in these districts. supplemental water source and/or poor Table grape vineyard sales were also soils and drainage conditions reflect the Sale activity of Fresno County cropland extremely limited in 2017, with the lower end of the range, while those prop- with surface water delivery was data suggesting a range from $20,000 erties with supplemental wells, good moderate in 2017, with a stable value to $30,000 per acre. The value trend is quality soils and favorable drainage con- trend. The range of values observed is consistent with raisin and wine grape ditions are reflective of the upper end of wide, from $11,000 to $28,000 per acre. vineyards, with little market support the range. Sale activity was driven by The low end of the range is represent- available in Fresno and Madera Counties. buyers who intend to develop the prop- ed by cropland properties toward the erties to permanent plantings, mostly west end of the county, where soil and pistachio and almond orchards. drainage conditions are less desirable, especially as they relate to permanent Activity in the Exchange Contractor planting development. The high end of districts of Western Fresno and Madera the range is seen in markets where com- Counties was very limited in 2017; but petition among buyers is higher and soil, the few data points suggested a stable water, and drainage conditions are good. value trend. Land in these markets tends

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 55 Large blocks of irrigated field cropland Activity for cropland in Madera County RANGELAND with both surface water deliveries and was also limited in 2017, with a slightly Market activity for rangeland properties good-quality well water are still in fairly declining trend noted. Most activity in the westside and eastside markets of high demand with competing buyers. In and demand in the market is derived Fresno County and the eastern Madera general, the market stabilized in 2017, from buyers motivated to develop County market remained very limited similar to most permanent planting permanent plantings. This trend has in 2017 with very few current transac- markets in Region 4. been observed in the market over the tions. Market demand and values appear past several years and continues to be Activity for cropland with well water to have diminished slightly for eastside the driving force. Cropland sale activity as its sole water supply was limited in properties, with the range reported outside of the districts was even more 2017, with a slightly declining range between $750 and $2,500 per acre. The limited, but suggests a similar slightly of values from $8,000 to $22,000 per high end of the range in the eastside declining trend due to long-term water acre. Like other markets, values are market is reflective of smaller parcels reliability concerns. dictated by soil conditions and water suitable for rural home sites. There supplies. Brokers and market partici- District water deliveries on the east are no known sales on the westside; pants are becoming more cognizant of side of Fresno and Madera Counties are however, the overall value trend is con- water sources with consideration given becoming more vital due to the pending sidered to be stable. to imminent pumping regulations due Sustainable Groundwater Management to SGMA and the availability of surface Act. Properties with two sources of water deliveries, which has negatively water have experienced the greatest affected this market. demand and strongest values in 2017. This trend is expected to continue as the Sustainable Groundwater Management Act takes effect in 2020.

56 REGION FOUR|CENTRAL SAN JOAQUIN VALLEY DAIRY INDUSTRY or removed after the close of escrow. combined with sizeable amounts of as- Larger dairies continue to be purchased sociated open row and field cropland for Sale activity for dairy facilities continued primarily by dairymen; however, a waste management and feed production. to be very limited in 2017 with very couple of sales involving modern dairies Premium prices have historically been few known sales within Region 4. Milk with sizeable acreage were purchased by paid for those facilities in the 1,000 to prices remained soft in 2017 due to permanent planting developers. 3,000 milking head range, as this size declining global demand which reduced of facility appears to have the greatest overall producer returns to California There were a number of dairies liq- market demand for buyers in the mar- milk producers. Although milk prices uidated over the last few years, with ketplace with the financial ability to continued to be low in 2017, value the older and less efficient units being purchase a facility of this size. Amount trends for dairy facilities throughout the impacted the most. This was primarily REGION FOUR of support land is also another primary Central Valley remained stable in 2017 a result of an extended period of low factor affecting dairy values, as a consid- as a result of interest in the underlying prices paid to dairy producers, higher erable amount of support land is needed land from permanent planting growers. costs for feed, and restrictive environ- in order to grow forage crops and ac- Most sales of smaller facilities in the mental regulations. The dairy market has commodate waste management. valley continue to be purchased mainly trended to larger operations with milking for the underlying land. The facilities capacities in excess of 1,000 head with on these dairies were either abandoned full dairy heifer replacement capacity,

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 57 Investing in Top Tier Agriculture Properties

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58 REGION FOUR|CENTRAL SAN JOAQUIN VALLEY VALUES: LAND AND LEASE LAND USE VALUE PER ACRE ACTIVITY / TREND RENT RANGE ACTIVITY / TREND PERMANENT PLANTINGS Almonds - Eastside $22,000 - $37,000 Moderate/Stable 25% - 35% Limited/Stable Almonds - Westside $11,000 - $17,500 Limited/Stable 25% - 35% Limited/Stable Pistachios $17,000 - $36,000 Limited/Stable 25% - 30% Limited/Stable Tree Fruit $18,000 - $30,000 Very Limited/Stable $750 - $1,250 Limited/Stable

Citrus $17,000 - $32,000 Limited/Stable $500 - $1,000 Limited/Stable REGION FOUR Raisin Grapes $20,000 - $30,000 Strong/Stable 20% - 25% Limited/Declining Table Grapes $20,000 - $30,000 Very Limited/Stable N/A Limited/Stable Wine Grapes $20,000 - $28,000 Very Limited/Sl. Decreasing 20% - 25% Limited/Declining CROPLAND Fresno County: USBR-West $4,000 - $9,000 Moderate/Sl. Decreasing $175 - $250 Moderate/Stable Fresno County: Exchange Contractors $10,000 - $18,000 Very Limited/Stable $250 - $450 Moderate/Stable Fresno County: Districts $11,000 - $28,000 Moderate/Stable $200 - $400 Moderate/Stable Fresno County: Well Water $8,000 - $22,000 Limited/Sl. Decreasing $200 - $400 Moderate/Stable Madera County: Districts $16,000 - $20,000 Limited/Sl. Decreasing $200 - $350 Moderate/Stable Madera County: Well Water $9,500 - $16,000 Limited/Sl. Decreasing $200 - $350 Moderate/Stable RANGELAND Westside $250 - $750 None/Stable $5 - $15 Moderate/Stable Eastside $750 - $2,500 Very Limited/Sl. Decreasing $12 - $30 Moderate/Increasing DAIRIES (FRESNO & MADERA COUNTIES) Newer (per lactating cow - without underlying land) $1,400 - $2,400 Very Limited/Stable $10 - $20 Limited/Declining Older (per lactating cow - without underlying land) $700 - $1,400 Very Limited/Stable $5 - $15 Limited/Declining

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James K. Merrill Owner-Broker CA Lic. # 00796663 (559) 661-6363

[email protected]

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 59 60 REGION FOUR

HISTORICAL VALUE RANGE per acre LAND USE ALMONDS PISTACHIOS TREE FRUIT CITRUS RAISIN GRAPES TABLE GRAPES WINE GRAPES FRESNO & MADERA COUNTIES |

CENTRAL SANJOAQUIN VALLEY 2017 $11,000 - $37,000 $17,000 - $36,000 $18,000 - $30,000 $17,000 - $32,000 $20,000 - $30,000 $20,000 - $30,000 $20,000 - $28,000 2016 $9,000 - $38,000 $20,000 - $36,000 $18,000 - $30,000 $15,000 - $30,000 $20,000 - $32,000 $20,000 - $32,000 $20,000 - $32,000 2015 $13,000 - $42,000 $18,000 - $40,000 $18,000 - $30,000 $15,000 - $30,000 $20,000 - $33,000 $20,000 - $30,000 $20,000 - $30,000 2014 $14,000 - $36,000 $15,000 - $40,000 $16,000 - $28,000 $12,000 - $20,000 $18,000 - $30,000 $18,000 - $25,000 $18,000 - $28,000 2013 $15,000 - $28,000 $15,000 - $33,000 $12,000 - $25,000 $12,000 - $20,000 $12,000 - $23,000 $12,000 - $20,000 $13,000 - $24,000 2012 $15,000 - $20,000 $15,000 - $33,000 $12,000 - $17,000 $12,000 - $20,000 $12,000 - $18,000 $12,000 - $19,000 $13,000 - $22,000 2011 $11,000 - $18,000 $12,000 - $25,000 $9,000 - $14,000 $7,500 - $15,000 $10,000 - $15,000 $10,000 - $15,000 $10,000 - $14,000 CROPLAND CROPLAND CROPLAND CROPLAND RANGELAND RANGELAND LAND USE USBR-WEST EXCHANGE CONTRACTORS DISTRICT WATER WELL WATER WEST SIDE EAST SIDE FRESNO COUNTY RANGELAND (FRESNO & MADERA COUNTIES) 2017 $4,000 - $9,000 $10,000 - $18,000 $11,000 - $28,000 $8,000 - $22,000 $250 - $750 $750 - $2,500 2016 $5,000 - $9,000 $10,000 - $18,000 $10,000 - $28,000 $10,000 - $25,000 $250 - $750 $600 - $3,000 2015 $6,000 - $10,000 $12,000 - $24,000 $10,000 - $30,000 $10,000 - $28,000 $250 - $750 $600 - $3,000 2014 $5,000 - $8,500 $10,000 - $16,000 $10,000 - $25,000 $10,000 - $22,000 $250 - $750 $600 - $3,000 2013 $5,000 - $8,500 $9,000 - $11,000 $7,500 - $19,000 $7,000 - $16,000 $250 - $750 $600 - $3,000 2012 $4,000 - $8,500 $8,000 - $10,000 $7,500 - $15,000 $4,500 - $13,000 $200 - $750 $500 - $3,000 2011 $2,500 - $5,500 $7,500 - $9,000 $4,500 - $13,000 $4,000 - $10,000 $200 - $750 $500 - $3,000 CROPLAND CROPLAND DAIRIES DAIRIES LAND USE MADERA DISTRICTS WELL WATER NEWER OLDER MADERA COUNTY DAIRIES (FRESNO & MADERA COUNTIES) 2017 $16,000 - $20,000 $9,500 - $16,000 $1,400 - $2,400 $700 - $1,400 2016 $18,000 - $23,000 $15,000 - $20,000 $1,400 - $2,600 $700 - $1,400 2015 $18,000 - $25,000 $16,000 - $25,000 $1,400 - $2,600 $700 - $1,400 2014 $16,000 - $20,000 $13,000 - $20,000 $1,400 - $2,600 $700 - $1,400 2013 $11,000 - $15,000 $9,000 - $11,000 $1,200 - $2,400 $500 - $1,200 2012 $10,000 - $14,000 $7,000 - $11,000 $1,400 - $2,800 $500 - $1,200 2011 $8,000 - $11,000 $7,000 - $10,000 $1,600 - $2,800 $500 - $1,800 REGION FOUR 61 3 7 5 1

7 5 3 7 5 3 7 5 3 7 5 3 1 1 1 1

$0 2003 1999 1997 1995 1993 201 201 201 2009 2005 201 2007 2001

$0 2003 $0 2003 2003 2003 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 201 2009 2005 2001 2007 201 2007 201 2007 201 201 2007 2001 2001 2001

Westside

$6,000 $6,000

Eastside

Westside

$1,000

$12,000 $12,000

in Agricultural Land & Lease Values Agricultural Land & Lease in

® e Eastsid

0 $18,00 $18,00 0

$2,000

$24,000 $24,000

2018 TRENDS

$30,000 $30,000

$3,000

$36,000 $36,000

D RANGELAN PISTACHIOS S ALMOND S CITRU VINEYARDS

$42,000 $42,000 $4,000 7 5 3 7 5 3 7 5 3 7 5 3 1 1 1 1

2001 $0 $0 2003 2003 2003 201 201 2009 2005 1999 1997 1995 1993 2003 201 201 201 2009 2005 1999 1997 1995 1993 1999 1997 1995 1993 201 201 201 2009 2005 1999 1997 1995 1993 201 201 201 2009 2005 201 2007 201 2007 201 2007 201 2007 201 2001 2001 2001

USBR-West

0 $5,00 0 $5,00

Wells Wells

$10,000 $10,000

t Distric t Distric s

Exchange Contractor Exchange www.calasfmra.com

$15,000 $15,000

$20,000 $20,000

CROPLAND CROPLAND EAST CROPLAND CROPLAND WEST CROPLAND $25,000 $25,000

y Count Fresno y Count Madera TREEFRUIT y Count Fresno

$30,000 $30,000 GR W YOUR SATISFACTION to yield rewards

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62 REGION FOUR|CENTRAL SAN JOAQUIN VALLEY REGION FOUR 63 s oller esident esident chard Leases eet esident in Agricultural Land & Lease Values Agricultural Land & Lease in farmsinc.com ® , Contr ce Pr 93631-1809 alnuts, Citrus and Prune ce Pr erm Or eenleaf AFM, Pr g, Vi g, CA alnut Harvesting es e to Stanislaus County 2018 TRENDS (559) 897-8014 Attebery ona@gr Fax (559) 897-8017 1665 Marion Str ular entur on Almonds, W Kingsbur Nick Hill, Vi chard Development om T Aar Bob Kolber fr John Colbert, Court-appointed Receiver GAAP Financial Reporting Or Almond & W Joint V Long and Short-T E-mail: aar Farm Management and Leasing for Investors and Institutions since 1972 Specializing in www.calasfmra.com BRE #01871081 AFM, ARA, AAC [email protected] • office: 559-283- 8554 • mobile: 559-905-0025 office: Mark Peterson, Mark Peterson, Over 30 years of experience in agricultural real estate investments in management, finance, areas of the purchases, and sales. Recent engagements include: •Financial advisor for the construction of 600 cow robotic dairy barn America clients on •Advisor to South investments in vineyards, wineries, nuts and Midwest crop land •Real estate and loan brokerage services for strawberry and vegetable growers

AG Real Estate Brokerage

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64 REGION FOUR|CENTRAL SAN JOAQUIN VALLEY REGION FOUR 65 e l m nia Agricultur .csufcab.com TE! e information, please call: 559-278-4405 in Agricultural Land & Lease Values Agricultural Land & Lease in ® DA Walt Carney, MAI 408-279-1520 x7145 www Issues and Outlook [email protected] Califor November 8, 2018 For mor 2018 TRENDS www.valbridge.co SAVE THE Agribusiness Management Conference s CA/Central Countie Central Valley 209-569-0450 x7301 Annual [email protected]

John Hillas, MAI, SRA th San Francisco Bay Area/Silicon Valley | Monterey/Carme Bay Area/Silicon San Francisco 37 DIRECT CELL www.calasfmra.com 559.447.6261 559.281.3338 .com G.R.I.

g 3

X OFFICE FA Vice President arson@pearsonrealty 559.432.6200 cl 559.432.2938 arm Lands Department F CRAIG LARSON, Senior M VM 661.304.9221 .com

Suite 101 Ave, alm P CA 93711 .pearsonrealty [email protected] CA1-527-01-01 1510 East Shaw Avenue Suite 10 1510 East Shaw Avenue CA1-527-01-01 Fresno, CA 93710 T 559.243.8766 Bank of America, N.A. Bank of America, Daniel A. Leith, AF Daniel A. Leith, Specialty Asset Manager Senior Vice President, Bankin and Investment Management Global Wealth resno, 7480 N. www F REGION FOUR

66 REGION FOUR|CENTRAL SAN JOAQUIN VALLEY REGION FIVE|SOUTHERN SAN JOAQUIN

Region Chair and Committee Michael Ming, ARA, FRICS - CHAIR Emily Ming Evie Portugal, ARA Lynn Rickard, ARA Steve Runyan, ARA, FRICS Robb Stewart, AFM

KERN | KINGS | TULARE REGION FIVE|SOUTHERN SAN JOAQUIN REGION FIVE

Overview ALMONDS CITRUS The commodity price for almonds stabilized into an average Demand for citrus plantings is considered limited with sales of all-varieties range from $2.00 to $2.50 per pound. The demand citrus groves in Tulare and Kern counties ranging from $14,000 for almond orchards has softened through the year especially to $26,000 per acre in 2017, a decrease of 7% on the high end for older orchards. The movement of almond orchards has been and 30% on the low end from 2016. Mandarin varieties have slow. In 2017 good quality orchards were selling at prices from been very limited and our analysis makes no effort to cover $24,000 to $30,000 per acre. The older orchards with limited that market in detail. The high end of the range reflects sales economic life are generally at $20,000 to $24,000 per acre. in Tulare County including newer navel varieties. The low end There are buyers actively in the market but very limited sellers. of the range reflects sales primarily in the Terra Bella-Ducor Buyers are searching for younger orchards, four to eight years, area of southern Tulare County and the McFarland area of but are unwilling to pay the high prices sellers are demanding northern Kern County. Values in the Wheeler Ridge-Maricopa therefore closed transactions are few. area in southern Kern County would fall near the upper end of the range but sales in that area rarely occur. There are buyers TABLE GRAPES actively in the market but very limited sellers. Sales of table grape vineyards were very limited in 2017, as is typical, with one sale of a young, high quality property. TREE FRUIT The value range of $30,000 to $40,000 per acre for economic Sales of tree fruit orchards continue to be primarily limited to vineyards was measured at the lower end by recent sales and at existing grower/packers or to buyers seeking ground suitable the upper end by younger vineyards with newer varieties. The for re-development. Tree fruit orchards, in general and regard- wide range is due to the economic viability of the vineyards. less of planted varieties, were and continue to be purchased In mid-2017 there was a sale at $40,000 per acre. It included primarily for the underlying ground. In areas of good ground newer varieties of high value table grapes. While this sale is and water conditions, orchard sales indicate values up to within the market it is at the very high end of the range. There $17,500 to $23,500 per acre, a 16-30% decrease from 2016. are buyers actively in the market but very limited sellers of Due to the reduction in tree fruit orchard plantings, supply and newer variety vineyards. Old vineyards with dated varieties demand is coming back into balance, allowing for better returns define the low end of the range. and a slightly more optimistic future but at smaller acreage. The bulk of tree fruit sales continue to be concentrated in Fresno

68 REGION FIVE|SOUTHERN SAN JOAQUIN VALLEY REGION FIVE 69 in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS family members or the terms are held held are terms the or members family This holders. investment by confidential of the crop in most if not all has resulted being for permanent crops share data new data as years, many in unchanged occasion uncovered. On the is seldom in- been has it found, is data new when understanding of the corporated into our ac- the in reflected and market limited From this occasional companying table. permanent crops, we crop share data of cash equiva- have attempted to estimate for a lower lent rents, without providing due to less risk to return on cash rents cash and share crop These landlord. the made under the as- equivalent rents are landlord both owns sumption that the the permanent the ground and developed to for 15 land is leased planting. Often, 20 years, and the tenant develops the permanent planting and therefore, the landlord would not receive the full crop in reflected equivalents rent cash or share the data provided. www.calasfmra.com RENTAL DATA ON PERMANENT CROPS ON PERMANENT DATA RENTAL has marginal water supplies. Sales of Sales water supplies. has marginal limited; very were properties pistachio from decreased by 9%-16% sale prices to $32,000 from $25,000 2016 ranging low- this primarily reflects per acre, but only which were the properties er-quality in for sale properties offered pistachio properties would 2017. Higher-quality prices, but owners likely sell for higher closely in 2017. held such properties in and small blocks of pistachios Large are receiving little “White Land” areas White land areas are to no buyer activity. water district bound- located outside any at-risk for groundwa- aries, thus are most is implemented. ter curtailment as SGMA In Region Five, rental data for open In Region Five, rental data for open ground is relatively common, but the In leasing of permanent crops is rare. to some cases there is not enough data provide even an educated guess at lease Where there is seemingly more terms. data, many of the leases are between WALNUTS PISTACHIOS The 2017 commodity price for pistachios The 2017 commodity As a result there were stabilized and rose. in a few good-quality orchards for sale subsurface dependable a with areas Due to competition from water supply. other nut crops for good soils with good water sources and the pistachio tree’s condi- stressful ability to handle better tions, pistachio orchards are consistently often that soil marginal on planted being Walnut prices dropped in 2017, mirroring in 2017, prices dropped Walnut Sales of walnut the nut price trends. limited, as sale properties were very the low end of the prices decreased on on the high range and slightly increased to $35,800 per end range from $16,000 County. Tulare acre in County, northern Kings County, or near or near County, Kings northern County, with line, County Fresno-Tulare the central to sales reported in the moderate County area. Tulare southern Kern County Buyers are beginning to understand Sale activity in 2017 slowed from the SGMA’s possible implications and previous year in water districts with less CROPLAND making decisions on best informa- reliable water resources and in “white California has implemented the tion provided by local basin managers land” areas. The number of marketed Sustainable Groundwater Management and experts. Sellers have yet to fully properties actually rose reflecting Act (SGMA). It has established a grasp the implication of SGMA and its slowing demand for land suitable for framework for sustainable, local ground- long-term effect on water use, and con- permanent crop development in the water management. SGMA requires sequently its relationship to value. face of lower commodity prices for nut groundwater-dependent regions to halt Open cropland in Districts that provide crops in these areas. The fewer quality overdraft and bring basins into balanced above-average surface water delivery water sources available to proper- levels of pumping and recharge. Upon and have water banking receive the ties directly equates to how the market passage of SGMA, DWR launched the highest level of interest. On the other views and values properties. Access Sustainable Groundwater Management end of the spectrum “White Land” areas to only well water in areas outside (SGM) Program to implement the law with no surface water rights are receiving of known water district boundaries and provide ongoing support to local little to no buyer activity. agencies around the state. Region 5 is classified by SGMA as being located in High Priority Basins (Critically Overdrafted). This is not unique for the San Joaquin Valley as most basins south of the Delta are similarly classified. The Kern County Basin (5-22.14) is ranked as the 11th overall basin ranking out of 21 High Priority Basins. The High Priority ranking is due to subsidence, overdraft, and water quality degradation.

ROBB M. STEWART, A.F.M. Senior Vice President Farms, Ranches and Transitional Properties CA Lic. #01158293

[email protected] www.pearsonrealty.com 661.303.2930 CELL

1801 Oak St, Ste 159 3447 S. Demaree St Bakersfield CA 93301 Visalia CA 93277 661.334.2796 DIRECT DIRECT 559.302.1912 661.215.5417 FAX FAX 661.215.5417

70 REGION FIVE|SOUTHERN SAN JOAQUIN VALLEY REGION FIVE 71 overall basin ranking th in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS out of 21 High Priority Basins. The Basins. Priority High 21 of out High Priority ranking is due primarily and water overdraft to subsidence, quality degradation. to $25,000. Land values in Central Kings in Central values Land to $25,000. $18,000 of in a range stable were County Kings Western in Values to $22,000. Water including Westlands County, of $5,000 to a range District, decreased prices in this The higher sale to $8,000. dependent upon supplemental area were deep wells. water sources from Kings County will be and Tulare as discussed by SGMA adversely affected Cropland. above in Kern County County Basins (5-22.11 Tulare The as the 2nd and and 5-22.13) are ranked ranking out of 21 16th overall basin The High Priority High Priority Basins. to overdraft, rankings are due primarily high nitrate and water quality issues, TDS in areas. is The Kings County Basin (5-22.12) ranked as the 15 CROPLAND , & AFM RANGELAND – WEST RANGELAND

www.calasfmra.com orchards ! , Associate Cushman management #01514403 Tulare & Kings County Tulare of Lic. and ranches AG Senior , vin Palla, Tulare County open land properties were Tulare stable in a range of $15,000 to $28,500. The highest demand has been for open land with prime soils and irrigation water from a combination of dependable surface water and ground water sources. - Northern Kings County open land prop erties were stable in a range of $20,000 Traditionally there is little rangeland rangeland little is there Traditionally the west purposes on sold for grazing The economics side of Kern County. area do not vary of grazing land in this is There next. the to year one from much and limited recre- no home site influence increased Land values potential. ational value trend is in 2017, but a stable projected going forward. segment, were limited as has been the has been limited as were segment, a was there and years recent in case the value trend. change in erage farms Ag & Land Division Ke (661) 633-3803 platform in brok WS [email protected] the ke and tunities estate with pioneer . real a oppor tise of of farming Inc on Alliance xper e ou need a aluation & with V decade his kefield member r, y a capitalize Advisors, Wa ALLA KNO has volved , Suite 1000 vin! In he clients

combines , generation enue life w help cial Realty ell as transitional land. no family. Av to his 93309 third e than eve a of nia CA farm RANGELAND – EAST acific is Kevin all . yards as w ield, KEVIN P alla sf P .paccra.com w mor efield|P ater – Call Ke ofessional in Land ersfield k xperience Bak Kevin agriculture Wa and vine e 5060 Califor Baker www Pacific Commer A Member of the Cushman & No W pr Sale activity was very limited, with an in- an was very limited, with Sale activity rangeland significant of number creasing increased transactions. Prices, however, levels, reflective of from last year’s Sales of smaller rents. higher per-acre parcels, reflected in the Recreation Land problematic becoming is Lands) (White of the Sustainable in recognition Act (SGMA). Management Groundwater activity in hand, sale On the other year in from the previous 2017 slowed the lack of districts due to good water for entering the market properties additional have districts These sale. to farmers water sources deliverable banking water through surface delivery, They have developed programs or both. over the past water banking programs forward put to continue and years several water banking new and exceptional water needs projects to help manage that enter the in the future. Properties receive above market in such districts average consideration. Mark Peterson, AFM, ARA, AAC

Over 30 years of experience in agricultural real estate investments in the areas of finance, management, purchases, and sales.

Recent engagements include: •Financial advisor for the construction of 600 cow robotic dairy barn

•Advisor to South America clients on investments in vineyards, wineries, nuts and Midwest crop land

•Real estate and loan brokerage services for strawberry and vegetable growers

[email protected] • BRE #01871081 office: 559-283- 8554 • mobile: 559-905-0025

72 REGION FIVE|SOUTHERN SAN JOAQUIN VALLEY REGION FIVE 73

None (559)582-9112 Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable ACTIVITY / TREND No Rents/Stable l I MAI in Agricultural Land & Lease Values Agricultural Land & Lease in ® Simon, $400 $400 $500 $500 $250 $300 ------2018 TRENDS No Rents

None 1306 N. Irwin St. $7 - $10 Jeremy Hansen No Rents No Rents No large dairy facility sales were found. No large Overall, demand continues to be limited as milk prices continue to show little The dairy industry upward movement. has and continues to contract with little change in the foreseeable future. $16 - $25 10% - 20% 10% - 20% 10% - 20% RENT RANGE Jacob Hower, MA Hanford, CA 93230 mothy J. $200 - $500 $500 - $1,000 $250 $250 $250 $250 $175 $200 $400 - $800 Real Estate Appraisa Ti and Eminent Domain Simon & Hower, Inc. Specializing in Agriculture, Commercial Serving Kings & Tulare Counties for over 27 years simonhower.com

None/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable ACTIVITY / TREND Limited/Declining Limited/Declining Limited/Declining Limited/Sl. Limited/Sl. Declining Limited/Sl. Declining Limited/Sl. Limited/Sl. Declining Limited/Sl. Limited/Sl. Declining Limited/Sl. Limited/Sl. Declining Limited/Sl. Limited/Sl. Declining Limited/Sl. Limited/Sl. Declining Limited/Sl. KERN COUNTY KINGS COUNTY TULARE COUNTY www.calasfmra.com

VALUES: LAND LEASE AND VALUES: Overall, average-to-good condition Overall, average-to-good condition milk modern with facilities functional barns make up the economic sales. Facilities with older milking parlors, in or expansion, for area limited with condition continue to show fair-average little demand. DAIRIES (Kings, Tulare and Kern Counties) and Kern DAIRIES (Kings, Tulare $23,500 $21,000 $1,750 $25,000 $25,000 $22,000 $20,000 $8,000 $18,000 ------None $500 - $900 VALUE PER ACRE PER VALUE $1,000 - $1,200 $1,350 $5,000 $6,500 $14,000 - $25,500 $17,500 $13,000 $24,000 - $30,000 $16,000 - $35,800 $25,000 - $32,000 $30,000 - $40,000 $20,000 $18,000 $15,000 - $28,500 $18,000 $18,000 $22,000 - $26,000 DAIRY DAIRY Citrus Almonds Walnuts Pistachios Table Table Grapes Rangeland - East Rangeland - West *per lactating cow - without underlying land Citrus

Tree Fruit Tree Olives

Newer* Cropland (North) Cropland Cropland - NE & Central Older* LAND USE

Cropland (Central) Cropland - Southeast Cropland (West) Water Cropland - State

The trend in dairy values continued down in 2017. Older facilities and small facilities continue to show little to no contributory value, purchased primarily for re-development to permanent plantings. $500 $10,000

OLIVES $500 - $900 $500 - $900 $450 - $700 $450 - $700 $475 - $600 $475 - $600 $200 - RANGELAND (WEST) $9,000 - $12,000 $8,000 - $13,000 - $21,000 $16,000 - $19,000 $14,000 - $17,000 $14,000 - $17,000 $11,500 - $15,000 $1,200 $2,000 $1,500 $1,500 $1,500 $1,300 $26,000 $23,500 $1,750 $2,200 $25,000 $25,000 $25,000 $21,000 $20,000 $28,000 $28,000 $24,000 $20,000 $18,000 $1,650 $1,650 $2,000 $2,000 $2,500 ------$1,300 ------$15,500 ------$12,500 - - - - - $750 $750 $750 $750 $600 $500 $800 CITRUS $1,000 $1,350 $9,500 $1,350 $1,350 $1,000 $1,400 $1,750 TREE FRUIT $22,000 $17,500 $22,000 $15,000 $15,000 $15,000 $12,000 $10,000 $24,000 $22,000 $16,000 $17,000 $14,000 *(per cow basis, including milk barn equipment and residence) *(per cow basis, DAIRIES, NEWER* DAIRIES, DAIRIES (KINGS, TULARE & KERN COUNTIES (KINGS, DAIRIES RANGELAND (EAST)

CITRUS CROPLAND WATER STATE $6,500 - $18,000 $5,000 - $8,000 $6,500 - $22,000 $8,000 - $20,000 $8,000 - $14,500 $9,000 - $12,000 $6,000 - $10,000 $5,000 - $8,000 $7,500 - $11,000 $7,500 - $11,000 $5,500 - $8,500 $4,500 - $7,500 $2,750 - $4,500 TABLE GRAPES TABLE $30,000 - $40,000 $14,000 - $25,500 $30,000 - $45,000 $22,000 - $32,000 $17,700 - $32,000 $22,000 - $30,000 $16,000 - $22,000 $12,000 - $17,500 $10,000 - $22,000 $20,000 - $28,000 $15,000 - $27,000 $15,000 - $27,000 $18,000 - $24,000 $14,000 - $24,000 $11,000 - $20,000 CROPLAND (WEST)

WALNUTS CROPLAND SOUTHEAST PISTACHIOS $9,000 - $12,000 HISTORICAL VALUE RANGE per acre HISTORICAL VALUE $25,000 - $32,000 $18,000 - $20,000 $16,000 - $35,800 $18,000 - $22,000 $30,000 - $35,000 $35,000 - $41,000 $35,000 - $41,000 $32,000 - $35,000 $24,000 - $32,000 $20,000 - $29,000 $19,000 - $20,000 $18,000 - $22,000 $16,000 - $20,000 $15,500 - $18,000 $13,000 - $16,000 $11,000 - $12,000 $32,000 - $35,000 $26,000 - $43,000 $26,000 - $43,000 $24,000 - $32,000 $20,000 - $28,000 $15,000 - $20,000 $18,000 - $22,000 $18,000 - $22,000 $15,000 - $19,000 $12,000 - $17,000 $10,000 - $15,000 CROPLAND (CENTRAL)

ALMONDS CROPLAND NE & CENTRAL CROPLAND (NORTH) $8,000 - $12,000 $9,000 - $14,000 $24,000 - $30,000 $18,000 - $25,000 $15,000 - $28,500 $20,000 - $25,000 $27,000 - $30,000 $29,000 - $40,000 $25,000 - $35,000 $22,000 - $28,000 $18,500 - $24,000 $15,000 - $19,000 $20,000 - $25,000 $22,000 - $26,000 $16,000 - $21,500 $16,000 - $18,000 $13,000 - $15,000 $10,000 - $11,500 $19,000 - $26,000 $15,000 - $27,000 $15,000 - $25,000 $13,000 - $18,000 $10,000 - $15,000 $20,000 - $25,000 $19,000 - $25,000 $16,000 - $24,000 $15,000 - $18,500 $12,000 - $17,000 LAND USE 2017 CROPLAND KERN COUNTY 2017 LAND TULARE COUNTY 2017 LAND USE KINGS COUNTY 2017 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 LAND USE

74 REGION FIVE|SOUTHERN SAN JOAQUIN VALLEY REGION FIVE 75

7 5 7 5 7 5 3 7 5 3 3 7 5 3 3 1 1 1 1 1

$0 $0 2003 $0 2003 2003 2003 2003 201 201 2009 2005 201 201 2009 2005 201 201 2009 2005 201 201 201 201 2009 2005 201 201 201 2009 2005 201 201 2001 2001 2001 2001 2001 2007 2007 2007 201 201 2007 201 2007 201 201 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1999 1997 1995 1993 1999 1997 1995 1993

West

State Water State

$5,000 $5,000

$500

Central

$10,000 $10,000

$1,000

Southeast

$15,000 $15,000 North

in Agricultural Land & Lease Values Agricultural Land & Lease in $1,500 ®

$20,000 $20,000

NE & Central & NE

$2,000

$25,000 $25,000

D CROPLAN D CROPLAN (West) D CROPLAN

2018 TRENDS

y Count Kern y Count Kings D RANGELAN y Count Tulare

$2,500 $30,000 $30,000

7 5 3 7 5 3 7 5 3 7 5 3 1 1 1 1

$0 $0 $0 2003 2003 2003 2003 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 2001 2001 2001 2001 201 2007 201 2007 201 2007 201 2007 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993

$5,000 $5,000

$500

$10,000 $10,000

0 $1,00

$15,000 $15,000

$1,500

$20,000 $20,000

www.calasfmra.com

$2,000

$25,000 $25,000

S CITRU T FRUI TREE OLIVES (East)

Tulare & Kern Counties Kern & Tulare y Count Tulare y Count Tulare D RANGELAN

$30,000 $30,000 $2,500

7 5 3 7 5 3 7 5 3 7 5 3 1 1 1 1

$0 $0 2003 2003 2003 2003 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 2001 2001 2001 2001 201 2007 201 2007 201 2007 201 2007 1997 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1995 1993

$5,000 $5,000

$10,000 $10,000

$15,000 $15,000

$20,000 $20,000

$25,000 $25,000

$30,000 $30,000

$35,000 $35,000

WALNUTS

$40,000 $40,000

y Count Tulare TABLE GRAPES TABLE PISTACHIOS ALMONDS

$45,000 $45,000 M. Green and Company LLP CERTIFIED PUBLIC ACCOUNTANTS Providing a Full Range of TAX & ACCOUNTING SERVICES DINUBA (559) 591-4545 TULARE (559) 688-7401 135 N. Uruapan Dr. Suite A 308 South “M” Street LINDSAY (559) 562-2551 HANFORD (559) 584-2751 287 East Hermosa 1483 Bailey Drive VISALIA (559) 627-3900 VISALIA (559) 625-0320 [email protected] 3900 West Caldwell 822 West Center www.mgreencpas.com since 1951 A Consistent Commitment to Client Service for Over 65 Years

CRAIG LARSON, G.R.I. Senior Vice President Farm Lands Department

www.pearsonrealty.com [email protected] 7480 N. Palm Ave, Suite 101 559.432.6200 OFFICE 559.281.3338 CELL Fresno, CA 93711 559.432.2938 FAX 559.447.6261 DIRECT

76 REGION FIVE|SOUTHERN SAN JOAQUIN VALLEY REGION FIVE 77 in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS www.calasfmra.com t lin.com oomey T 733-1000 .hrmack Larry Mapes Mike ice (559) m Off C isalia CA 93291-9514 ppraisals/Inspections V ax (661) 885-8004 AFM, AA F 661-587-1010 ersfield, CA 93390 arm & Ranch [email protected] www.valbridge.co chases A F Management Financing Michael Burger, MAI, R/W-AC tkinson tkinson 34854 Road 124 x 20040 Bak H.R. Macklin & Sons, Inc. H.R. Macklin & Sons, Southern San Joaquin Valley and Central Coas Southern San Joaquin Valley and Central Sales/Pur (559) 733-3578 [email protected] www PO Bo [email protected] CA BRE: #01082451 Office (661) 835-1080 Office (661) Cell (661) 332-8688 Darrell A Darrell ax F REGION FIVE GR W YOUR SATISFACTION to yield rewards

Sit down with our expert Ag lenders today and find out why so many of our satisfied customers refer us to friends and colleagues.

Rick Shaeffer Senior Vice President Agribusiness Team Leader (559) 323-3493

Investing In Agricultural Relationships. www.cvcb.com • (559) 298-1775 Proudly serving the San Joaquin Valley and Greater Sacramento

78 REGION FIVE|SOUTHERN SAN JOAQUIN VALLEY REGION SIX|CENTRAL COAST

Region Chair and Committee Allison Renz Clark, ARA - CHAIR Tony Brigantino, MAI Kyle C. Brown, MAI Mike Cullinan Dee Dee Dunstan, MAI Gary L. Fenske, ARA Rick Mercier, ARA

Santa Clara County grown (warmer weather), difficulty in obtaining farm labor for the area, as well as higher operating costs. However, over the ROW CROPS past few years, more Salinas Valley growers are entering the market, much like they have been in San Benito County. Rents Irrigated farmland in Santa Clara County is primarily found in in the area are seeing slight to moderate increases. Most of the south, near Morgan Hill, San Martin, and Gilroy. Farmland the newer rents still offer gross rent terms, with the owner values are heavily influenced by land investors and speculators paying the property taxes/insurance and the tenant paying the enticed by future development potential as the supply of devel- utility costs. opment land in nearby Silicon Valley continues to shrink. The majority of buyers tend to be investors/absentee owners, with an occasional farmer adding to an existing farming operation. San Benito County Agricultural land typically falls into three subgroups. Small ROW CROPS parcels (5 acres and less) are typically purchased for residential estate purposes. Agricultural properties ranging from 10 to 40 San Benito County row crop prices have seen fairly signifi- acres are often purchased by investors; these properties are often cant upward pressure due to Salinas Valley growers entering leased and in many cases farmed in conjunction with adjacent the market. Coupled with a thin inventory of available proper- land on an interim basis. Tracts larger than 40 acres reflect a ties, the result has been steady increases in values. Demand is stronger commercial farming element with a combination of moderate to strong, with a supply and demand imbalance due owner/operators and investors purchasing these properties. The to more buyers than sellers. Good quality farmland is seeing Gilroy area in the very southern part of Santa Clara County values in the $30,000 to $40,000+ per acre range, while values tends to have larger tracts of agricultural land and per-acre in secondary farming areas are seeing values in the $19,000 land values are correspondingly lower than in the Morgan Hill to $25,000+ per acre range. Most, if not all, buyers in the San area, which is generally limited to smaller 5-10 acre residen- Benito County market are owner/operators. There are few tial sites and 20-40 acre “speculative” sites purchased by long investors purchasing farms in the county due to rents being in- term investors. sufficient to produce adequate returns. Rents in the Gilroy area have generally been lower than the San Agricultural water is derived primarily from wells, with sup- Benito County market and much less than the Salinas Valley plemental water available in areas of the county serviced by market. This is in large part due to the somewhat limited crops the San Felipe Division of the Central Valley Project. In light

80 REGION SIX|CENTRAL COAST REGION SIX 81 in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS Agricultural land rents vary depending vary depending rents land Agricultural include These factors many factors. upon supported crops that can be the lease term, negotiation berry crops), (specifically condition lessee, and owner the of skills type of the irrigation system, and quality system, and topography. of drainage cash and the lessee is Rents are normally for paying the real typically responsible costs, and irrigation estate taxes, water The current market system maintenance. strong increases in appears volatile with increases to rental sale prices and slower are considered to rates. Farmland rents and there is a very be stable to increasing, properties in limited supply of available - cap in trend definitive A area. market the yet to be determined. italization rates has Historically rates have trended from 4.50% to 5.50%, however the current rate range is sub-3.00% to 4.00%. Recent yet reflect potential changes sales don’t majority the With in market rental values. - of buyers looking to satisfy contract ob ligations, which is a component of their business that incentivizes paying prices there above what an investor will pay, - may be a trend towards lower capitaliza tion rates. Counties ROW CROPS www.calasfmra.com Monterey & Santa Cruz Santa Cruz & Monterey Monterey and Santa Cruz County row and Santa Cruz County Monterey strong values have experienced crop land past two years. Sale increases over the with only a handful activity was typical occurring transactions prime farmland of Sales indicated in each county in 2017. $25,000 to $72,000 values ranging from in the While there were no sales per acre. farming region of prime Blanco District that, it is anticipated Monterey County, will be values does occur, when a sale than previous sales significantly higher sales have typically in the area. Recent - been listed on the open market, solicit Increasing offers. competing ing several values, and corresponding decreasing capitalization rates, have essentially priced investors out of the market in the interim, until rents catch up. Current buyers are primarily local growers looking to secure land with less emphasis placed on the income earning capability of a property. - unpredict conditions, drought recent of have adversely district allocations able in areas operations farming impacted groundwater quality. with poor in San and rental values Since land less than are typically Benito County Monterey properties in those of similar to be strong there continues County, Benito County ag- interest in prime San rents have seen ricultural land. Farmland past several years an increase over the County farmers have as more Monterey to seem currently and market the entered adaptable to berries be stable. Farmland the strongest rents. typically has seen rental rates Other factors influencing status, organic/conventional include wind, and water quality. Monterey County Santa Clara, San Benito Other Influences & Concerns & Monterey Counties WINE GRAPES CANNABIS There was limited activity related to CENTRAL COAST RANGELAND The number of greenhouse transactions vineyard properties this past year, with Demand for Central California pasture in Monterey County decreased slightly the principal parties involved in recent ranches is moderate, depending upon when compared to the prior year (2016), transactions tending to be both local the specific location and amenities. potentially indicating a slowdown of in- vineyardists and investment companies. Good quality, well located pasture vestments in properties that are capable Good quality commercial vineyard ranches are seeing steady market activity of supporting the cannabis industry. The properties generally range from $45,000 from both individual and institutional growth or absorption of the remaining to $75,000 per net vine acre, with the investors. Smaller pasture ranches (500 potential cannabis greenhouse space, as higher values tied to locations within to 3,000 acres) are seeing demand from we move into 2018, remains question- the Santa Lucia Highlands AVA. The “lifestyle” buyers while many of the able as the process of permitting opera- wine grape market appears to be strong. larger ranches reflect a stronger investor tions is sorted out by state regulators, and Vineyard sales in Monterey County influence. While most of the ranches are is anticipated to vary with each county, consist almost entirely of commercial capable of supporting livestock produc- keeping the market guessing. operations. Typically there are very few, tion, recreational influence is strong and Market participants indicate the per if any, small vineyard sale transactions. has contributed to the demand. pound price of cannabis has fallen The majority of land sales in the area, steeply over the past year and may not especially any recent land sales, are rebound until the track-and-trace system heavily influenced by their irrigated field is implemented, which is expected to cropland potential. minimize the black-market as secondary competition. Nonetheless, 2018 is expected to see an overall decline in the price of wholesale cannabis, as seen in Oregon. Obstacles to permitting (including pesticide and mold compliance, issues involving water usage, strain on the power grid, etc.), high tax rates, and the track-and-trace system may be barriers to small startups and compress net profits for larger investors active in the current market. Ultimately, it may be seen that older facilities face compliance costs (specifically for the control of mold and mildew) that reduces their economic viability. Mark Peterson, AFM, ARA, AAC LABOR COSTS & DEMAND Over 30 years of experience in Monterey County and the Central Coast agricultural real estate investments in the areas of finance, management, areas continue to be impacted by the purchases, and sales. labor shortage. As Mexico increases its manufacturing jobs and a strong Recent engagements include: U.S. economy offers more jobs in construction and hospitality, in the already •Financial advisor for the construction of 600 cow robotic dairy barn limited labor pool, competition for labor continues to increase. As mechaniza- tion and less labor-intensive farming •Advisor to South America clients on investments in vineyards, wineries, nuts and techniques are explored, the most viable Midwest crop land long-term option appears to be foreign guest workers (H2A visas); however, •Real estate and loan brokerage services for farm labor housing projects require a strawberry and vegetable growers large capital outlay and suitable locations for the projects are difficult to find. [email protected] • BRE #01871081 office: 559-283- 8554 • mobile: 559-905-0025

82 REGION SIX|CENTRAL COAST Santa Maria Valley San Luis Obispo the County of San Luis Obispo amended & Santa Barbara Counties several ordinances to continue restrict- IRRIGATED VEGETABLE/STRAWBERRY LAND ing new plantings and additional water usage without an off-set as outlined Current land prices are presently ranging WINE GRAPES by the county. These restrictions have between $23,500 to $70,000±/acre in The market for vineyard properties and resulted in the increased value of vested, the Santa Maria Valley, assuming good land suitable for vineyards in Santa plantable land from $12,000 to more adaptability to crops along with a good Barbara and San Luis Obispo Counties than $20,000 per net acre and strength- water supply. The current market for has been strong for the past few years. ened the planted vineyard market, farmland in the Santa Maria Valley is Vineyards in Santa Rita Hills, Santa Ynez which ranges from $28,000 to more stable, while activity in the heart of Valley, Edna Valley, and the west side of than $40,000 per net vineyard acre. The the vegetable and strawberry growing Paso Robles/Templeton are currently fringe areas further north and east histor- area of the Valley is limited. There selling for approximately $50,000 to ically sold toward the lower end of the were no sales in 2016 and the only sale more than $60,000 per net vineyard acre, range; however, more recently have sold in 2017 was in the mid-$50,000 per with higher values in the Santa Barbara for similar prices. The buyers tend to be acre range. region. The vineyard market in the Paso existing vineyard owners and winery Robles and Templeton area has been Rents in the Santa Maria Valley have owners looking to expand their opera- REGION SIX softened slightly from last year with most influenced by the initial implemen- tions, now with limited land available current vegetable crop rents ranging from tation of the Paso Robles Ground Water for expansion. $1,300 to $1,900 per acre, and strawber- Basin Moratorium, which expired in ry rents higher at $2,000 to $3,000 per August 2015. On November 27, 2015, acre, depending on the adaptability of the soils to strawberries. Due to demand for strawberry land, many irrigated field crop land owners are leasing land to strawberry growers. Strawberry growers in this area have started to explore more marginal areas for production, lessening the demand for land. They are also developing rotation strategies with local vegetable growers to maximize land uti- lization and lessen some of the competition for irrigated field crop land.

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 83 DRY PASTURE RANGELAND retreat and home site desirability, versus and prices; however, it has shown sub- those ranches purchased for grazing stantial recovery over the past several For several years, the Temblor Mountain land. The larger ranches that offer scenic years. This area is very attractive for Range/Carrizo Plains market was influ- vistas, hunting, and other forms of rec- large, rural home sites, with these prop- enced by out of town buyers purchas- reation are typically forested, watershed erties typically being less than 1,000 ing ranches for recreational, retreat and land and of little use for grazing. These acres. Sales range from $4,500 per homesite purposes. Since the downturn ranches tend to set the upper limit of acre for large dry pasture ranches with in the economy, the demand from these the price range, with one ranch of ap- limited usability and/or lack ocean types of buyers has been reduced. These proximately 8,850 acres in size selling views, to $15,000 per acre for smaller, sales are divided into two main groups: for $900 per acre. The large ranches desirable parcels with coastal influence, ranches of 1,500 acres and smaller, and purchased for cattle grazing are selling ocean views and/or cultivatable land. ranches 1,500 acres to 15,000 acres. for between $500 and $700 per acre. No Typically, there is limited activity of The first group ranges from $800 to recent sales of dry pasture ranches were coastal ranches larger than 1,000 acres in $7,000 per acre, while the second group discovered in the market area. size as these ranches are rarely available ranges from $300 to $1,200 per acre. or offered for sale on the public market. The primary influence that drove prices Parcels along the Pacific Ocean and up on the smaller parcels was residen- Coastal Mountain Range with rural tial and/or recreational uses. The larger residential appeal have continued to ranches may also be further divided remain stable to strong. After 2007, into parcels purchased for recreational, this market saw a decline in activity

(805) 485-1579 res/office (805) 479-1995 cellular [email protected] 455 E. La Loma Avenue, Somis, California 93066

84 REGION SIX|CENTRAL COAST SM REGION SIX “Community West Bank has helped me tremendously. Their knowledge of my agricultural operation was instrumental in coming to grips with some very difficult decisions. I’m immensely thankful.”

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www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 85 Ventura & Ventura County ORANGES Southern Santa Barbara In Ventura County, most of the sales IRRIGATED VEGETABLE/STRAWBERRY LAND Counties with orange groves are small and are The prime area of Ventura County purchased primarily for their rural LEMONS & AVOCADOS for truck crops (irrigated crops) is the homesite amenity. The sale of com- Ventura County and Southern Santa Oxnard Plain. There have been limited mercial size orange groves are rare in Barbara County lemon values for com- 2017 sales of truck crop land in this area. the county and the economic viability mercial size groves have been stable During 2017, berry ground sales ranged of most of these groves is nil. There over the past year, based on limited between $78,000 and $81,000 per acre is a change in the highest and best use sales. Ventura County and Southern with rents from $2,900 to $4,000 per evidenced by conversion to other uses. Santa Barbara County avocado values acre. Vegetable land sales in and near Thus orange groves will be excluded for commercial-size groves have been the Oxnard Plain were limited to two from this and future Market Trends stable over the past year based on very transactions: one at $59,000 per acre updates for Ventura County. limited sales. The values have increased and the other at $68,000 per acre, with slightly for small (homesite) size parcels, rents from $1,700 to $2,900 per acre. CONCERNS The other irrigated crop areas in the causing them to command higher per Currently, one of the main consider- county are located more inland (to the acre prices than commercial-size prop- ations in land transactions is the political east). They command lower prices and erties. This appears to be a reflection of climate. Voters in Ventura County lower rents as they experience more the improving residential market and its recently extended the SOAR (Save Our extreme temperatures, which negatively influence on rural properties. The lower Agricultural Resources) initiative until affect crop growing conditions. Prices sale prices are from properties located in 2050. Because of this initiative, any in those areas in 2017 were $45,000 to the far eastern portions of the county, in change in zoning requires a vote of the $53,000 per acre, with rents at $1,700 to which more extreme temperatures nega- county’s general populace. Additionally, $2,300 per acre. The current market for tively affect growing conditions. Only growers are concerned about the recent Oxnard Plain berry ground is soft, while commercial size properties are included overtime ruling requiring time and vegetable ground is stable. The current in the Land and Lease Values Table. one-half for employees working over 40 market for other areas appears to be hours per week or 8 hours per day. Added soft. Currently, there is little inventory to this burden is the recent statewide of land offered for sale. Only commer- increase in the minimum wage. Also, cially viable properties are included in there is uncertainty about water, as the the Land and Lease Values Table. southern part of the state is still in an extreme drought with declining groundwater levels and increasing regulation. Finally, the recent fires in Ventura and Santa Barbara Counties occurred in the foothills and, agriculturally, primarily affected the avocado groves. It is unclear what this effect might be, with some properties potentially being abandoned.

Central Valley CA/Central Counties San Francisco Bay Area/Silicon Valley | Monterey/Carmel John Hillas, MAI, SRA Walt Carney, MAI 209-569-0450 x7301 408-279-1520 x7145 [email protected] [email protected] www.valbridge.com

86 REGION SIX|CENTRAL COAST REGION SIX 87 N/A N/A N/A Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Strong/Increasing Moderate/Stable Strong/Sl. Increasing Strong/Sl. Moderate/Sl. Increasing Moderate/Sl. Moderate/Sl. Decreasing Moderate/Sl. ACTIVITY / TREND in Agricultural Land & Lease Values Agricultural Land & Lease in ® $30 $3,000 $4,000 $3,300 $1,800 $1,000 $20 $15 $30 $30 $20 $3,000 ------N/A N/A N/A $7 $5 $7 $6 - $6 2018 TRENDS $15 $750 RENT RANGE $900 $450 $400 $1,200 - $3,000 $1,300 $1,700 Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable ACTIVITY / TREND Limited/Decreasing Very Limited/Stable Very Limited/Stable Very Limited/Stable Moderate/Increasing Moderate/Increasing Moderate/Increasing Moderate/Increasing Moderate/Increasing Moderate/Sl. Increasing Moderate/Sl. Moderate/Sl. Increasing Moderate/Sl. www.calasfmra.com VENTURA COUNTY MONTEREY COUNTY SAN BENITO COUNTY SANTA CRUZ COUNTY CRUZ SANTA SANTA CLARA COUNTY SANTA

VALUES: LAND LEASE AND VALUES: $2,500 $81,000 $63,000 $40,000 $40,000 $63,000 $2,000 $3,000 $70,000 $15,000 $86,000 $2,500 $15,000 $70,000 ------$600 - $700 $500 VALUE PER ACRE PER VALUE $2,500 $1,500 $2,500 SAN LUIS OBISPO AND SANTA BARBARA COUNTIES BARBARA AND SANTA OBISPO SAN LUIS $23,500 $45,000 $25,000 $30,000 - $72,000 $19,000 $20,000 $37,000 $50,000 $25,000 - $75,000 $25,000 Avocados Rangeland Wine Grapes Row Crops/Strawberries Row Crops Row Crops Row Crops Row Crops Row Crops - Gilroy Row Crops LAND USE Coastal Rangeland (San Luis Co) Lemons Rangeland Rangeland Inland Rangeland (San Luis Co) Rangeland (Santa Barbara Co) Wine Grapes $50,000 $50,000 $50,000 $60,000 $60,000 $60,000 $60,000 $70,000 $70,000 $70,000 $70,000 $70,000

WINE GRAPES $18,000 - $11,500 - $25,000 - $40,000 - $25,000 - $28,000 - $25,000 - $9,000 $9,000 $9,000 $12,000 $15,000 $15,000 $15,000

RANGELAND $500 - $1,000 - $1,000 - $1,500 - $2,500 - $3,000 - $2,500 - (Santa Barbara County)

- $4,800 - $7,000 - $7,500 - $7,500 - $7,500 - $7,500 - $2,500 - $2,500 - $2,500 - $2,500 - $2,500 - $63,000 - $75,000 - $75,000 - $60,000 - $50,000 - $40,000 - $40,000 - $38,000 - $100,000 - $100,000 - $65,500 - $65,000 - $73,000 - $73,000

AVOCADOS RANGELAND WINE GRAPES $500 $300 $500 $300 $300 $300 $600 $600 $600 $500 $500 (San Luis County) RANGELAND INLAND $37,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $18,000 $37,000 $37,000 $43,000 $34,000 $38,000 $38,000

LEMONS ROW CROPS RANGELAND RANGELAND $700 - $2,000 $700 - $2,000 $700 - $2,000 $700 - $2,000 $700 - $2,000 $700 - $1,900 $700 - $1,200 (San Luis County) $3,000 - $9,000 $3,000 - $9,000 $2,500 - $9,000 $2,500 - $12,500 $2,500 - $15,000 $3,000 - $15,000 $1,500 - $3,000 $1,500 - $3,000 $1,000 - $2,500 $2,500 - $5,000 $1,200 - $5,000 $1,200 - $5,000 $2,500 - $15,000 $1,500 - $3,000 RANGELAND COASTAL HISTORICAL VALUE RANGE per acre HISTORICAL VALUE $19,000 - $40,000 $50,000 - $86,000 $15,000 - $35,000 $15,000 - $30,000 $10,000 - $30,000 $11,000 - $32,000 $11,000 - $30,000 $11,000 - $28,000 $50,000 - $100,000 $50,000 - $100,000 $45,000 - $65,000 $34,000 - $73,000 $60,000 - $68,000 $46,000 - $73,000 SAN BENITO COUNTY

- $60,000 - $60,000 - $54,000 - $58,000 - $70,000 - $70,000 - $40,000 - $40,000 - $40,000 - $40,000 - $40,000 - $20,000 - $63,000 - $72,000 - $70,000 - $40,000 - $81,000 - $60,000 - $60,000 - $60,000 - $55,000 - $55,000 - $55,000 - $72,000 - $62,000 - $62,000 - $51,000 - $51,000 - $51,000 - $100,000 - $85,000 - $100,000 - $95,000 - $88,000 - $88,000

ROW CROPS ROW CROPS ROW CROPS ROW CROPS ROW CROPS (Gilroy) $20,000 $20,000 $20,000 $20,000 $20,000 $23,000 $18,000 $18,000 $15,000 $15,000 $15,000 $14,500 $25,000 $30,000 $23,500 $20,000 $45,000 $25,000 $25,000 $25,000 $25,000 $25,000 $21,000 $30,000 $25,000 $25,000 $25,000 $25,000 $25,000 $42,000 $42,000 $42,000 $54,000 $55,000 $52,500 2011 2012 2013 2014 2015 2016 2016 2015 2014 2013 2012 2011 LAND USE MONTEREY COUNTY 2017 LAND USE CRUZ COUNTY SANTA 2017 LAND USE BARBARA COUNTY OBISPO COUNTY & SANTA SAN LUIS 2017 LAND USE CLARA COUNTY SANTA 2017 LAND USE VENTURA COUNTY 2017 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011

88 REGION SIX|CENTRAL COAST REGION SIX 89

7 5 3 7 5 3 7 5 3 7 5 3 1 1 1 1

$0 $0 2003 2003 2003 2003 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 201 201 201 2009 2005 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 201 2007 201 2007 201 2007 201 2007 2001 2001 2001 2001

$10,000 $10,000

$20,000 $20,000

$30,000 $30,000

$40,000 $40,000

$50,000 $50,000

$60,000

$60,000 Values Agricultural Land & Lease in ®

$70,000 $70,000

WINE GRAPES WINE

$80,000 $80,000 Counties

S AVOCADO WINE GRAPES WINE LEMONS Barbara Santa

$90,000 $90,000

y Ventura Count Ventura 2018 TRENDS y Count Monterey y Count Ventura & Obispo Luis San

$100,000 $100,000

3 7 5 3 3 3 7 5 7 5 7 5 1 1 1 1

$0 $0 2003 2003 2003 2003 201 2005 201 201 2009 201 2005 201 2005 201 2005 201 201 2009 201 201 2009 201 201 2009 1999 1997 1995 1999 1997 1995 1993 1999 1997 1995 1993 1999 1997 1995 1993 1993 201 2007 201 2007 201 2007 201 2007 2001 2001 2001 2001

$2,500 $2,500

$5,000 0 $5,00

$7,500 $7,500

$10,000 0 $10,00

$12,500 $12,500

$15,000 0

$15,00 www.calasfmra.com

D RANGELAN

RANGELAND INLAND RANGELAND D RANGELAN COASTAL RANGELAND County $17,500 $17,500

San Luis Obispo County Obispo Luis San y Count Monterey San Luis Obispo County Obispo Luis San Santa Barbara Barbara Santa

$20,000 0 $20,00

7 5 3 5 7 3 5 7 3 7 5 3 7 5 3 1 1 1 1 1

$0 $0 2003 201 201 201 2009 2005 2001 2003 2001 2003 2003 2003 201 2009 2005 201 201 201 2009 2005 201 201 201 201 201 2009 2005 201 201 201 2009 2005 201 2007 2007 201 2007 201 201 2007 2001 201 2007 2001 2001 1993 1997 1995 1997 1999 1999 1999 1997 1995 1993

$15,000 0 $15,00

0 $30,00 0 $30,00

$45,000 0 $45,00

$60,000 $60,000

$75,000 0 $75,00

S CROP ROW

S CROP ROW ROW CROPS ROW Santa Barbara Countie Barbara Santa S CROP ROW s S CROP ROW $90,000 $90,000

Monterey Count Monterey Santa Cruz Count Cruz Santa y y & Obispo Luis San y Count Benito San Ventura Count Ventura y

$105,000 $105,000 90 REGION SIX REGION SIX | CENTRAL COAST REGION SEVEN|SOUTHERN CALIFORNIA

Region Chair and Committee Curtis A. Buono, ARA, MAI, AI-GRS - CHAIR Todd Combs, ARA Jeremy K. Darner, MAI Mark T. Miller

General Comments CITRUS Region Seven covers the various farming regions of Southern Market activity has remained limited, though demand appears California and includes farmland located within Los Angeles, to have increased marginally for citrus properties in the coastal Orange, San Bernardino, Riverside, and Imperial Counties. regions and inland valleys. While there were a few sales of With varying microclimates, from the arid low deserts to the citrus groves, no transactions of a significant size were noted. temperate coastal foothills, trends in agricultural land and Lemons continue to be the citrus crop of choice for most lease values are best analyzed by area and commodities grown. growers. Overall, the consensus is that values remained stable Although some of the region’s submarkets face pressures of during 2017. urban encroachment, agriculture continues to be an important contributor to Region Seven’s economy. DAIRY Region Seven’s dairy market is concentrated in two main Coastal Mountains & Inland Valleys areas, the Chino Basin in western Riverside—San Bernardino Counties, and the San Jacinto River Basin in western Riverside AVOCADOS County. Milk products continue to be the #1 commodity in Avocado groves remained generally stable. Although much San Bernardino County, with 2016 sales of $158± million. In needed precipitation gave the region a welcome respite from Riverside County, 2016 saw milk products fall into the #2 spot the sustained drought and resulted in a few more sales, prop- at $149± million, just below nursery stock at $150 million. erties in the coastal regions have continued to struggle with The Chino Basin continues to experience urban encroachment affordable irrigation water sources. More efficient water man- with new construction showing moderate increases with the agement and a continued drive to become less reliant on district improved housing market. New development in the San Jacinto water supplies has resulted in development of more advanced River Basin market area has been extremely limited. Price filtration systems, salt tolerant rootstock, and higher density trends are stable to increasing in the Chino Basin and consid- plantings. Groves with suitable alternative water sources have ered to be stable in the San Jacinto River Basin with limited experienced stronger demand and higher prices, though areas market activity taking place. with less favorable water sources are exhibiting weaker values. As with most permanent plantings, high producing groves with potential for estate development have demonstrated the highest values.

92 REGION SEVEN|SOUTHERN CALIFORNIA REGION SEVEN 93 in Agricultural Land & Lease Values Agricultural Land & Lease in ® IMPERIAL VALLEY Desert Region Desert COACHELLA VALLEY COACHELLA 2018 TRENDS Imperial Valley is a flat, northerly sloped northerly flat, a is Valley Imperial irrigated valley established in the early irrigated 462,359 of consisting 1900s, This valley lies directly north of acres. Arizona, west of the Mexican Border, and south of east of San Diego County, Like the Coachella Riverside County. Valley Imperial Valleys, and Palo Verde benefits from low cost surface water coming from the nearby Colorado River. The Imperial Irrigation District (IID) is the provider at a current cost of $20 per water usage is six to Typical acre-foot. eight acre-feet per acre. The market participants in the Imperial groups: four into divided be can Valley local farmers, well established regional growers, and packers and shippers of produce. other and vegetables winter developers Previously solar energy their activity has were active; however, declined significantly because IID’s needs are believed to renewable energy satisfied. have been largely repre- sold, tracts farmland 2017, 40 In 25 when 2016, from increase an senting The Coachella Valley extends for ap- extends Valley The Coachella Riverside 45 miles in proximately the San Bernardino from County, Salton Sea in the north to the Mountains Approximately 60,000 acres in the south. from surface water benefit Valley in the delivered from the for irrigation that is the Coachella Canal Colorado River via Canal. All-American of the branch Water the Coachella Valley Currently, its entire allotment District does not use planning to extend of water; so they are water to farmers in delivery of surface currently pumping the Oasis area that are The desert region is attrac- groundwater. tive as it produces some of the earliest crops in the nation, resulting in good crops The main returns to growers. (mostly citrus grapes, table include lemons), vegetables, dates, and nursery sales activity There was limited stock. in 2017 primarily due to a lack of land The properties being available for sale. that did sell were mostly in the $20,000 to $30,000 per acre range. ORANGE COUNTY www.calasfmra.com LOS ANGELES COUNTY LOS Orange County has a total land area of area land total a has County Orange 948 square miles that extends from the coastal plains along the Pacific coast Ana Range to the foothills of the Santa of Mountains. Like neighboring Los agriculture has a small Angeles County, influence on value trends. Los Angeles County covers 4,061 square Los miles with topography that varies from the coastal plains along the Pacific coast to the rugged foothill Santa Monica— San Gabriel Range of Mountains to the arid region of the Mojave Desert. Los Angeles County is the most populous county in the nation and agriculture encompasses less than one percent of sporadic is activity Sales area. land the and the value of agricultural real estate value making very location-specific, is trends difficult to measure. Grape pricing is expected to move in a to move is expected pricing Grape final numbers once the direction positive are released. a region mostly experienced While the concern season, some positive growing a glassy-winged when raised was Disease) (carries Pierce’s sharpshooter captured its largest trapping program The in 2003. haul since it was instituted orange groves in the pests were found in been While there has Valley. Temecula to area vineyards, no immediate impact Valley Temecula it has spurred the to educate Association Winegrowers treatment and detection about growers This will be an important options. in 2018 as this outreach program is growing vineyard and winery market committed to preventing this Pierce’s disease spreading insect that ravaged the area in the late 1990s. NURSERY WINERIES & VINEYARDS Region Seven includes the South Coast Region Seven includes the South Coast which Area (AVA), Viticultural American Angeles, comprises grapes grown in Los Orange, Riverside, San Bernardino, The largest and San Diego Counties. and most well-known sub-region is the in southwestern AVA Valley Temecula relative Temecula’s Riverside County. popu- California to Southern proximity - lation centers benefits the area with sig nificant tourist traffic. - In 2017 there were no winery transac tions, but there was some marketing Valley activity on Temecula two wineries that are still for sale in 2018. transactions have been very Vineyard limited, with only a few moderately than (less in 2017 selling vineyards sized 10 planted acres). Land and vineyard values were stable in 2017 and some promising activity going into 2018 could set a new upper end of the market range. In 2017, newly planted vineyard acreage far exceeded the planted acreage that sold, which is one measure of demand. The trend of replacing citrus groves with vineyard continued in 2017 within the Region Seven, much Valley. Temecula like the rest of California, benefited from the above average rainfall, which should result in an above average grape crop for reds and possibly whites, though there was some damage from the heat spikes at the end of the growing season. The market for nursery properties was for nursery properties The market a limited slow in 2017 with generally positive The industry’s sales. volume of the year as throughout outlook continued for drought continued demand a result of construc- and a healthy tolerant plants Although the passing tion market. which 64, Proposition California of marijuana at the legalized recreational 1, 2018, January state level effective in the nursery had created more interest of a federal properties, the reversal Attorney Generals guidance to U.S. marijuana cases in to not prosecute created uncertainty legalized states has in the near-term. for the pot industry if this issue nears a favorable However, demand resolution, marijuana-related for nursery properties could have an upward influence on values. farm transactions closed. There were 25 ity land has been limited, ranging from pants completed purchases. Generally, sales in 2015 and 2014, 40 sales in 2013, $6,000 to $8,500 per acre. The past the previously seen value tiers have 46 sales in 2012, and 42 in 2011. There year saw the highest quality properties remained stable, with non-speculative were 15 sales at or above $12,000 per continue to generate significant interest, farm buyers paying in the range of acre in 2017, indicating strong activity while the mid- and lower- tiers of land roughly $11,000 to $17,000 per water at the top end of the market. In contrast experienced increasing marketing times, toll acre. Water district buyers have been to 2016, there were very few large sales though transactions still occurred for at the higher end, in the mid- to high in 2017 – only one transaction exceeded fairly priced tracts. teens per water toll acre range. Rental 1,000 acres—and the 40 farms that sold rates have not tracked upward as land averaged just over 200 acres. PALO VERDE VALLEY values increased, leading to extremely The sales that took place in the past The Palo Verde Valley is located in eastern low capitalization rates that indicate the year largely involved local farmers, Riverside County along the Colorado buyers currently active in the market- though agricultural investors from other River basin. The valley is approximately place are limited to owner-users or spec- regions of California were also active, 29 miles long (north to south) and has a ulators rather than investors who expect some of whom were looking to place maximum width of about 15 miles. Hot a cash flow that is sufficient enough to 1031 exchange funds. There is sig- summers, mild winters, and very little justify the investment. nificant price discrimination between rainfall characterize this desert climate. In a 2005 agreement, Metropolitan Water classes of land. Prices paid for produce- By far the most valuable commodity District of Southern California (MWD) quality land have been strong, with better produced in the valley is alfalfa, with negotiated with Palo Verde Irrigation quality land prices ranging from $12,000 other forage crops, cotton, small grains, District (PVID) in Blythe to fallow up to $15,000+ and clustering around broccoli, leafy vegetables, and melons to 35% of the Valley’s farmland for 35 $12,500 to $13,500 per acre. Average also being commonly planted. years. This equitable agreement pays quality land has also been steady with 2017 saw slightly fewer transactions take farmers for Colorado River water that purchase prices ranging from $8,500 to place, though the Irvine Ranch Water would have been used for farming in the $12,000 and clustering around $10,000 District and a few other market partici- area and transfers the water to MWD to $11,000 per acre. Limited adaptabil- for urban use in Southern California. The MWD fallowing payment for the 2017-2017 year is $809.64 per water toll acre. In September 2017, PVID filed a lawsuit against MWD centered around the 2015 purchase of over 12,000 acres of farmland in the Valley as well as the district’s leasing practices. This lawsuit has created some uncertainty regarding values in the local market since it is likely, at least in the near-term, to adversely impact the buying activity of those water districts who were largely responsible for the upward value pressure that was present since 2015.

94 REGION SEVEN|SOUTHERN CALIFORNIA REGION SEVEN 95 ACTIVITY/TREND Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Very Limited/Stable Very Limited/Stable Very Limited/Stable Very Limited/Stable Very Limited/Stable Very Limited/Stable Very in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS $2,000/Ac $700 $10/MC/Mo 40% Share 40% Share $250 $350 $10/MC/Mo 40% Share 40% Share $550 $400 $500 $700 $600 ------

$7 $8 RENT RANGE 30% 30% 30% 30% $350 $500 $175 $200 $350 $250 $350 $500 $400

None/Stable None/Stable None/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable ACTIVITY/TREND Strong/Increasing Strong/Increasing Strong/Increasing www.calasfmra.com IMPERIAL VALLEY COACHELLA VALLEY SAN DIEGO COUNTY PALO VERDE VALLEY PALO VALUES: LAND LEASE AND VALUES: $60,000 $20,000 $500,000 $25,000 $17,000** $28,000 $28,000 $500,000 $30,000 $30,000 ------WESTERN RIVERSIDE & SAN BERNARDINO COUNTIES BERNARDINO RIVERSIDE & SAN WESTERN VALUE PER ACRE PER VALUE $6,000 - $8,500 $8,500 - $12,000 $25,000 $10,000 $50,000 - $100,000 $10,000 $11,000 $10,000 $20,000 $25,000 - $40,000+ $12,000 - $15,000 $18,000 $25,000 $150,000 $150,000

(Alfalfa) (Produce) *Includes Southwestern Riverside County *Includes Southwestern Wine Grapes Wine Average Adaptability Average Limited Adaptability Limited Irrigated Field Crops Dates Open Land Table Grapes Table

Cropland **$/Water Toll Acre Toll **$/Water Citrus Dairies: Chino Dairies: Avocados*

Good Adaptability Good

Citrus Citrus Dairies: San Jacinto Dairies: LAND USE

$27,000 $4,500 - -

LIMITED OPEN LAND ADAPTABILITY $3,500 $6,000 - $8,500 $6,000 - $8,500 $6,500 - $8,500 $5,500 - $7,000 $5,000 - $6,000 $3,500 - $4,500 $18,000 $18,000 - $30,000 $18,000 - $30,000 $18,000 - $29,000 $23,000 - $28,500 $16,000 - $29,000 $18,000 - $27,000 (Alfalfa) AVOCADOS WINE GRAPES TABLE GRAPES TABLE $8,500 - $12,000 $8,500 - $11,500 $8,500 - $11,500 $7,000 - $8,000 $6,000 - $9,000 $4,500 - $7,000 $4,500 - $7,000 ADAPTABILITY AVERAGE (includes Southwestern Riverside) $25,000 - $38,000 $23,000 - $30,000 $23,000 - $30,000 $23,000 - $28,000 $25,000 - $30,000 $20,000 - $30,000 $50,000 - $100,000 $10,000 - $25,000 $25,000 - $30,000 $50,000 - $100,000 $45,000 - $90,000 $45,000 - $90,000 $35,000 - $70,000 $35,000 - $70,000 $35,000 - $70,000 $10,000 - $25,000 $13,000 - $35,000 $13,000 - $28,000 $13,000 - $28,000 $10,000 - $24,000 $14,000 - $24,000

DATES DAIRIES (Produce) CROPLAND GOOD ADAPTABILITY $7,000 - $10,000 $9,000 - $11,000 $9,000 - $12,500 $9,000 - $10,000 $22,000 - $25,000 $65,000 - $170,000 $40,000 - $60,000 $25,000 - $40,000 $30,000 - $75,000 $30,000 - $75,000 $16,000 - $50,000 $22,000 - $25,000 $25,000 - $60,000 $25,000 - $40,000 $12,000 - $15,000 $90,000 - $250,000 $65,000 - $250,000 $25,000 - $60,000 $40,000 - $60,000 $40,000 - $60,000 $40,000 - $60,000 $40,000 - $55,000 $11,500 - $15,000 $11,500 - $14,500 IMPERIAL VALLEY $150,000 - $500,000 $150,000 - $500,000 $180,000 - $500,000 $188,000 - $475,000 HISTORICAL VALUE RANGE per acre HISTORICAL VALUE

CITRUS CITRUS CITRUS (per water toll acre) $8,250 - $11,600 $8,250 - $11,600 $8,250 - $11,800 $8,000 - $12,000 $7,200 - $10,500 $20,000 - $25,000 $20,000 - $25,000 $20,000 - $25,000 $16,000 - $29,000 $16,000 - $25,000 $22,000 - $25,000 $10,000 - $20,000 $10,000 - $28,000 $20,000 - $28,000 $11,000 - $17,000 $10,000 - $20,000 $10,000 - $20,000 $10,000 - $20,000 $10,000 - $20,000 $10,000 - $20,000 $10,000 - $20,000 $10,000 - $24,000 $10,000 - $24,000 $10,000 - $24,000 $10,000 - $20,000 $10,000 - $20,000 $10,000 - $20,000 $11,000 - $17,000 IRRIGATED FIELD CROPS IRRIGATED 2016 2015 2014 2013 2012 2011 LAND USE LAND USE WESTERN RIVERSIDE AND SAN BERNARDINO COUNTIES 2017 LAND USE SAN DIEGO COUNTY 2017 LAND USE COACHELLA VALLEY 2017 VERDE VALLEY PALO 2017 2016 2105 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011

96 REGION SEVEN|SOUTHERN CALIFORNIA REGION SEVEN 97 1 1 3 3 1 1 7 5 7 5 7 5 7 5 3 3

201 201 2001 2001 $0 2003 2003 201 201 2009 2005 2009 2005 2005 $0 1999 1997 1999 2001 1999 1997 1997 1999 1997 201 201 201 201 201 201 201 201 201 201 2009 2007 2007 2007 2001 1995 1993 1995 1993 1995 1993 1995 1993 2003 2003 201 2005 2007 201 2009

$4,000 $4,000

$8,000 $8,000

in Agricultural Land & Lease Values Agricultural Land & Lease in

$12,00 $12,000 0

$16,000 0 $16,00 ) (Produce E CROPS/PRODUC (Alfalfa)

Y ADAPTABILIT GOOD D FIEL IRRIGATED Y ADAPTABILIT LIMITED Y AVERAGE ADAPTABILIT AVERAGE 2018 TRENDS

Imperial Valley Imperial y Valle Verde Palo Imperial Valley Imperial y Valle Imperial

$20,000 0 $20,00

1 3 7 5 1 1 1 3 3 3 7 5 7 5 7 5

$0 201 $0 2001 2003 201 2009 2005 1999 1997 201 201 2007 1995 1993 201 201 201 2001 2003 201 2009 2005 2001 2001 2003 2003 201 201 2009 2005 2009 2005 1999 1997 201 201 2007 1999 1997 1999 1997 1995 1993 201 201 201 201 2007 2007 1995 1993 1995

$25,000 $25,00 0

$50,000 $50,00 0

GRAPES

OPEN LAND OPEN

E TABL S CITRU S DATE

$75,000 $75,00 0

www.calasfmra.com y Valle Valley y Valle Valley

a Coachell a Coachell a Coachell Coachella Coachella

$100,000 $100,000

1 1 1 3 3 3 7 5 7 5 7 5

$0 $0 201 201 201 2001 2001 2003 2003 201 2009 2005 201 2009 2005 2001 2003 201 2009 2005 1999 1997 1999 1997 201 201 201 201 2007 2007 1995 1993 1995 1999 1997 1993 201 201 2007 1995 1993

$20,000 $20,000

0 $40,00 $40,00 0

$60,000 $60,000

S AVOCADO S CITRU S CITRU 0 $80,00 $80,00 0

y Count San Bernadino Countie Bernadino San s y Count

o Dieg San & Riverside Western San Diego Diego San

0 $100,00 0 $100,00 OUR LAND, AGRIBUSINESS & NATURAL

REGION SEVEN RESOURCES INSIGHT. YOUR REAL ESTATE ADVANTAGE.

The best real estate investment decision-making comes from actionable insights and accurate information. Our team of highly experienced professionals focus on production agriculture, farms, ranches, land and natural resources. The team leverages CBRE’s global platform and local expertise to provide brokerage, acquisition, and debt & structured finance services to every client. How can we help you transform your real estate into real advantage?

D. MATT MARSCHALL, MAI, ARA, FRICS DYLAN MARSCHALL Senior Vice President Financial Analyst +1 858 404 7202 +1 858 404 7203 [email protected] [email protected]

Build on cbre.us/lsgsandiego Advantage

98 REGION SEVEN|SOUTHERN CALIFORNIA REGION EIGHT|MOUNTAINS

Region Chair and Committee Michael F. Merkley, ARA - CHAIR Al Blunt Jeff Myers

Northern Inter-Mountain Valleys In the past, the surrounding forestlands in this region provided timber for the many saw mills in operation throughout the LASSEN, MODOC, SHASTA & SISKIYOU COUNTIES region. The decline in the timber industry began in the mid 1990’s due to the placing of the California Spotted Owl on Located in northeastern California, the leading commodities for the sensitive species list and the resulting reductions in federal the Northern Inter-mountain Valleys in order of value are forage timber sales. Lumber prices softened and volume dropped dra- (primarily alfalfa), cattle and calves, nursery stock (primarily matically after the housing crash of 2008. These two factors strawberries), vegetables (primarily potatoes and onions), resulted in the closure of most of the smaller mills in Northern timber, wild rice, and grains. Walnuts are also a fairly new crop California and Southern Oregon and the loss of many timber- being grown in Shasta County, having a slight increase in planted related jobs. Timber prices increased in most classes in 2017. acreage due to stabilizing commodity prices in 2017. There Sales of timber parcels in the area are usually limited with is currently average to good demand throughout for irrigated extended marketing periods as well. farms and livestock grazing. Time on market for both property types has lengthened. Commodity prices have decreased sub- The Northern Inter-mountain Valleys are broken into various stantially from the highs seen over the previous 3-5 years with sub-market areas. The Alturas area and Surprise Valley are cattle prices experiencing a 40% decline and the hay market located in northeastern Modoc County. A key attribute of the also seeing a decrease of up to 30-35% in 2016, with an upward area is the abundant supply of federal rangeland available for trend in cattle and hay prices in 2017. The demand for farms a relatively low cost; fertile bottomlands; and power from and ranches hasn’t diminished as demand for forage and the the Surprise Valley Rural Electric Co-Op at some of the lowest ability to control it seem to be major factors in the market, with rates in the state. All of these features combine to make this limited sale activity as there are not a lot of average-quality a productive farming and ranching region in the intermoun- or better offerings presented. Overall, this market area appears tain west. Historically, the principal crops grown in this area stable with a limited number of sales. are alfalfa hay, irrigated pasture for beef cattle, cereal grains, and dry pasture, with some wild rice grown south and west of Alturas.

100 REGION EIGHT|MOUNTAINS REGION EIGHT 101 in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS Shasta Valley and Scott Valley are Valley and Scott Valley Shasta Siskiyou north-central within situated is located within Valley Sierra County. Honey Sierra Counties. Plumas and is located in southeastern Valley Lake comprises Valley and Big Lassen County County part of Lassen the northwestern part of Modoc and the southwestern northeastern and lies near the County, the Historically, corner of the State. in these areas are principal crops grown for beef irrigated pasture alfalfa hay, and dry pasture. cattle, cereal grains, in as off tapered has production Timber of attribute key A sub-markets. other the supply abundant the is area market this available for a rela- of federal rangeland bottomlands; and tively low cost; fertile water for irrigation. Pittville/McArthur is situated in eastern Shasta and western Lassen Counties near the communities of Fall River Mills, This area falls McArthur and Pittville. Historically, Valley. within the Fall River area are grown in this the principal crops irrigated pastures for beef alfalfa hay, The cattle, cereal grains, and wild rice. surrounding forestlands provide timber and support several saw mills in the area. mint, garlic, and straw- More recently, The berry sets have been also planted. of wild noted for the production area is rice and strawberry sets. Demand for property in the area is strong and values have been stable over the past year. - www.calasfmra.com upper basin. Those producers dependent dependent producers Those basin. upper Sycan and the Sprague from on water beginning denied water Rivers were going 2013 with the water in June of adjudicated the water needs to fulfill Tribe. by the Klamath to and claimed made Tribe the Klamath More recently, as early as Spring a call on the water the upper basin ir 2017 which impacted Despite summer. the throughout rigators issues surrounding the ongoing water area, demand for property Tulelake the stable over the is average with values past year. is an intensive farming Valley Butte key A County. area located in Siskiyou is the abundant attribute of the area - supply of relatively low cost irriga wells and tion water from underground Irrigation District. Valley the Butte the principal crops grown Historically, irrigated in this area were alfalfa hay, pasture for beef cattle, cereal grains, and potatoes. More recently potatoes have - been replaced by the growing of straw and of soils type right the with sets berry - infrastructure. Strawberry nursery pro the of one become recently has duction most valuable crops with plants county’s exported to many countries worldwide. is nurseries various from Competition strong for lands capable of producing the area for property in the sets. Demand seen are values and good to average is very during the past year with as stable production Timber limited sales activity. has also tapered off. Tulelake is situated in the agricultural agricultural in the is situated Tulelake in Basin Klamath the as known district California of portion northeastern the Oregon. into south-central and extends crops grown the principal Historically, alfalfa hay, are cereal grains, in this area onions, for beef cattle, irrigated pastures seed. More recently, potatoes, and grass market carrots mint, garlic, and fresh area is The have also been planted. and of potatoes production the for noted has been Irrigation water malting barley. recent years due to at the forefront in that are vying for the numerous entities claim to the water The parties laying it. tribes on the vary and include Indian irrigation farmers and Klamath River, environmen- districts, wildlife refuges, talists, and wildlife on the endangered species list. Even in the best of years, the water available does not satisfy the claim which lay needs of all the parties State and to it. In 2001 emergency Federal grants provided money to drill supplemental wells and as of 2004 nine wells were completed and able to serve approximately 25% of the total lands location and irrigated. Due to the wells’ not all the farms in the basin capacity, have access to water from these wells. Several private wells have also been drilled and can supplement small areas. adjudication of water rights the With completed in March of 2013, a whole new set of problems arose affecting water right priorities and access to water for those ranches and farmers in the All Sierra Nevada East Placer County Mountain Counties IRRIGATED CROPLAND/RICE GROUND RANGELAND There are limited areas in the eastern Prior to the downturn in the economy, portion of Placer County that are suitable the rangeland market was influenced for these uses. Land values have remained by buyers looking for ranches for recre- stable with very limited sales activity ational, retreat, and home site purposes. noted. Parcels adaptable to permanent At the present time, the demand from plantings command the highest prices. these types of buyers has decreased. Properties having less desirable soil There was very limited sales activity types for growing permanent plantings in most of the market area in 2017, and remain in various irrigated crops or the very limited sales that did occur rice. However, nut commodity prices indicated stable prices. During the mid- are putting pressure on any and all 2000’s, values of rangeland ranches were open land. Similar to the northern rice being driven by 1031 exchange transac- producing counties, values of good tions, primarily by outside investors and quality rice properties have remained not livestock producers. This type of relatively stable. There is limited avail- transaction has slowed due to other weak ability of rice farms for purchase in the sectors of the economy. At the same area. Prospective buyers tend to be other time, there appears to be some interest farmers looking to expand their opera- from livestock producers in purchasing tions, which creates good competition large ranches at current listed prices, for desirable rice farms. with no justification for a positive return.

California Water & Irrigation District Maps FullFull color maps provide coverage of California Waterter,, Irrigation and Reclamation Districts fSfrom Shasta to Tehachapi. Maps include roads, sections, townships and ranges with easy to read county outlines and water district boundaries. Water District contact information is also included. ORDER YOURS TODAY! $10.00 each plus salessalest taxax andands shippinghipping Order on-line www.calasfmra.com or call (209) 368-3672

Published by:

California Chapter, ASFMRA P.O. Box 838 Woodbridge, CA 95258 | (209) 368-3672 | www.calasfmra.com

102 REGION EIGHT|MOUNTAINS REGION EIGHT 103 None/Stable None/Stable None/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable ACTIVITY / TREND in Agricultural Land & Lease Values Agricultural Land & Lease in ®

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s s s s s s s sos s sosos sos s s s s sosos sos sos sos sososs sss s s s sssssssssssssssss sssss ssssssssss ssssssssssssss oooonoonoononooooooooooooonooooooooooooooooonooo hhihihihihihhihhhihihhihihihihhhihihihihihhhihhihihihihihihhihihhhhihihihhhihhhhhihhhhhhhihihhihihhihihhihihih iiionionionioionionionioniiiionionionionioioionioioiioniionionionioioiioioiioniioioiionioionionionionioiionionii rrrrrrrrrrrrrrrrr PITTVILLE/McARTHUR ttttttttttttttttttttttttttttttttttttttttttttttttt ThiThiThiTThiThiThiThThiThiThiThiThiThiThiThiTThiThiThThiThiTTThiThiThiThiThThiThiThiThiThiThTThThThiTThThThiTTTThTThThiThiThiThiThiTThiThiThiThiThiThiTThiThiTThThiThiThiTThThiThiThiThiThThiTThiThiTTTTThThThiTTTTTTTTTTThiThThThiThiTThTThiTTTThiThiThThiThTThiThThThiThTThThThTTThThTTTThThTThTT This ranch is currently for sale! arararaaaaarararararararaararararararararaaaaaaaaraar aaatatatatatataataataaatatataaaa eareareareareareareareareareareareareareareareareareareareaeareareareareareareaeareaeareareareaeareaeeareareareareaeaeaeareaeeee eateateateateateateateaeateeateateateateateateaeaeateateateateateateateateateateateateateateeeateeeeeateateateeeeeee rrrrrrrr ccrcrcrcrcrcccrcccccccc 0 00 0 0 0 0 00 00 00 0 0 0 0 0 0 0 00 0000 0 0 0 00000 0 000 0 000 00 0 0 0 0000 0 0 0000 0 00 000000 ecrecrecrecrecrecececrecrecrecrecrecrecrecrecrecrecrecrececrecrecreececrecreecrecrecreececreececeeeeeceeece 333333333333333333 3333333333333 $8,000 $7,000 $5,000 RRRRRRRRRRRRRRRRRRRRRR RRRRRRRRRRRRRRR r r r r r r r3r r r r r3r r3r3r r r r3r r r3r3r r r3rrrrr VALUES: LAND LEASE AND VALUES: - $5,000 - - - $2,000 - $2,000 - $2,000 - eeeeee d d d dRd dRd d d d d d dRd d d d d dRd dRdRd d d d dRd dddRd d dRddddddd vvvevevevevevevevvevvvvevvvvvvvvvevvvvvvvvvvvvvvvvvvv nnnnnnn OveOvOOveOvOveOOOOveOveOveOveOveOveOveOveOveOveOvOvOOveOOveOveOveOvOOveOveOvOOOveOvOveOveOOOveOOOOvOveOveOveOOOvOvOOvOvOveOOOOOvOOveOvOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOvOOOvOvOOvOvOOOOOOvOOOvOO Over 30 ears of eerience in anananananananananananananananananananaananaanaanananananananananaaananananaaanaaaanaan ll lllllllllllllllllllllllllllll aalalalaaaaaa $400 - $1,000 rararararararararararararararararararararararararararararararararrrararrrrrarrrrarrrrarrrrararrr (530) 941-8100 uuuuuuuuuuuu VALUE PER ACRE PER VALUE $1,000 - $2,500 $2,500 - $3,500 $4,000 - $8,500 $5,000 - $6,000 $2,500 $2,500 - $4,500 $2,000 - $2,500 tututututututututututtttutututututttutututtututut $3,000 $7,000 $5,000 $1,000 $1,000 $1,000 ltultultultultultultultultultultultultultultultultultultultultultultultultultultultultultultultultultultu uuuuuuuuuuuuuuuu cucucucucucucuccucccucccccucuccucuccccc icuicuicuicuicuicuicuicicuicuicuicuicuicuicuicuicuicicuicuicuicuicuicuicuicuicuicuicuicuicuicuicuicicuicuiicii TUOLUMNE, MARIPOSA, MONO & INYO COUNTIES MARIPOSA, MONO & INYO TUOLUMNE, rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr rrrrrrrrrrrr grgrgrggrgrgrgggggrgrgrgrggggrgggggggggggggggggggggg EAST EL DORADO, AMADOR & CALAVERAS COUNTIES AMADOR & CALAVERAS EAST EL DORADO, AgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAgAAgAgAgAgAAgAAgAgAgAgAgAgAgAAgAgAgAgAgAgAgAgAgAgAgAgAgAgAAAgAgAAgAgAAgAgAgAAAAgAgAAAAAgAgAgAgAgAAAgAgAgAAAgAgricultural and Recreational Real Estate Sales throughout Northern California [email protected] PLUMAS, EAST PLACER, SIERRA, NEVADA & ALPINE COUNTIES SIERRA, NEVADA EAST PLACER, PLUMAS, NORTH INTERMOUNTAIN VALLEY AREAS (Lassen, Modoc, Shasta, Siskiyou Counties) Modoc, Shasta, (Lassen, AREAS VALLEY INTERMOUNTAIN NORTH NORTH INTERMOUNTAIN CATTLE RANCHES Value pre Animal Unit RANCHES Value CATTLE INTERMOUNTAIN NORTH Range Operation (>15% Public) Irrigated Cropland/Rice Ground (Placer) Meadow/Irrigated Pasture Rangeland Irrigated Crop/Good Quality Acreage Irrigated Crop/Good Quality Irrigated Crop/Good Quality Acreage Meadow/Irrigated Pasture

LAND USE

Inside Operation (0-15% Public) Rangeland Rangeland Dry Pasture

Irrigated Crop Acreage

Strawberry Ground Dry Pasture 104 REGION EIGHT HISTORICAL VALUE RANGE per acre IRRIGATED CROP/ MEADOW/ LAND USE STRAWBERRY GROUND GOOD QUALITY ACREAGE IRRIGATED PASTURE DRY PASTURE

| NORTH INTERMOUNTAIN VALLEY AREAS (Lassen, Modoc, Shasta & Siskiyou Counties) MOUNTAINS 2017 $5,000 - $6,000 $2,500 - $4,500 $2,000 - $2,500 $400 - $1,000 2016 $5,000 - $6,000 $2,500 - $4,500 $2,000 - $2,500 $400 - $1,000 2015 $4,000 - $6,000 $2,000 - $5,000 $2,000 - $3,000 $250 - $1,000 2014 $3,000 - $5,000 $2,000 - $6,000 $2,000 - $3,000 $500 - $1,000 2013 $3,000 - $5,000 $2,000 - $3,000 $1,750 - $4,000 $500 - $1,200 2012 $2,000 - $5,500 $2,200 - $5,500 $1,750 - $4,000 $500 - $1,200 2011 $2,000 - $5,500 $2,200 - $5,000 $1,750 - $4,000 $500 - $1,200 IRRIGATED CROP MEADOW/ IRRIGATED LAND USE GOOD QUALITY ACREAGE IRRIGATED PASTURE DRY PASTURE CROP ACREAGE SIERRA VALLEY PITTVILLE/McARTHUR 2017 $2,500 - $5,000 $2,500 - $3,500 $1,000 - $2,500 $4,000 - $8,500 2016 $2,500 - $5,000 $2,500 - $3,500 $1,000 - $2,500 $4,000 - $8,500 2015 $2,500 - $5,000 $2,500 - $5,000 $1,000 - $5,000 $4,000 - $8,500 2014 $2,500 - $5,000 $2,500 - $10,000 $2,500 - $5,000 $4,000 - $6,000 IRRIGATED CROPLAND/ LAND USE RANGELAND RICE GROUND PLUMAS, E. PLACER, SIERRA, NEVADA & ALPINE CO EAST PLACER 2016 $1,000 - $2,000 $7,000 - $8,000 2015 $1,000 - $4,000 $7,000 - $8,000 2014 $1,000 - $4,000 $7,000 - $8,000 2013 $500 - $5,000 2012 $500 - $4,500 2011 $1,000 - $4,500 LAND INSIDE OPERAION INSIDE OPERATION USE RANGELAND RANGELAND 0-15% Public) (>15% Public) EL DORADO, AMADOR & CALAVERAS CO TUOLUMNE, MARIPOSA, MONO & INYO CO CATTLE RANCHES ($ per AU) 2017 $1,000 - $2,000 $1,000 - $2,000 $5,000 - $7,000 $3,000 - $5,000 2016 $1,000 - $5,000 $1,000 - $3,000 $3,500 - $7,000 $3,000 - $5,000 2014 $1,000 - $5,000 $1,000 - $3,500 $3,500 - $5,000 $3,000 - $4,000 2013 $1,000 - $5,000 $1,000 - $3,500 $3,500 - $5,000 $3,000 - $4,000 2012 $1,200 - $5,500 $1,000 - $3,000 $5,000 - $12,500 $2,500 - $4,000 2011 $1,200 - $5,500 $1,000 - $3,000 $5,000 - $12,500 $2,500 - $4,000 REGION EIGHT 105

7 5 7 5 7 5 3 3 3

$0 $0 $0 2001 2001 2001 2003 2003 2003 201 201 201 201 201 201 2011 2011 2011 2007 2007 2007 1999 1997 1999 1997 1999 1997 201 2009 2005 201 2009 2005 201 2009 2005

(>15% Public) $ per AU per $ Public) (>15% AU per $ Public) (0-15%

$1,500 $1,500 $5,000

$3,000 $3,000 $6,000

in Agricultural Land & Lease Values Agricultural Land & Lease in

$4,500 $4,500 $7,000

$6,000 $6,000 $8,000

$5,000 $7,500 $7,500

2018 TRENDS

$9,000 $6,000 $9,000

$10,500 0 $10,50 $7,000

$8,000 $12,000 0 $12,00

INSIDE OPERATION INSIDE RANGE OPERATION RANGE Sierra Nevada Sierra

$13,500

0 $13,50 $9,000

D RANGELAN INSIDE - RANCHES CATTLE - RANCHES CATTLE

0 $10,00 $15,000 0 $15,00

3 1 7 5 7 5 7 5 1 1 1 3 7 5 3 3

$0 $0 $0 $0 201 201 2001 2001 2001 2003 2003 2003 2003 201 201 201 201 2009 2005 201 201 201 2007 201 201 2007 2007 2007 2001 1999 1997 1999 1997 1999 1997 201 201 201 2009 201 2009 2005 201 2009 2005 1999 1997 2005

0 $1,00 $1,000

0 $1,00 0 $1,00

$2,000 0 $2,00

www.calasfmra.com

$3,000 0 $3,00

0 $2,00 0 $2,00

$4,000 0 $4,00

0 $3,00 $5,000 0 $5,00 0 $3,00

$6,000 0 $6,00

0 $4,00 0 $4,00

$7,000 0 $7,00

$8,000

0 $8,00

0 $5,00

STRAWBERRY GROUND STRAWBERRY IRRIGATED CROP/GOOD QUALIT CROP/GOOD IRRIGATED Y

E PASTUR DRY MEADOW/IRRIGATED PASTUR MEADOW/IRRIGATED E

$9,000 0 $9,00

North Intermountain Valley: Intermountain North North Intermountain Valley Intermountain North North Intermountain Valley: Intermountain North : North Intermountain Valley Intermountain North :

0 $6,00 $10,000 0 $6,00 $10,000 Al Connor P.O. Box 1035 Vice President Walnut Grove, CA 95690 REGION EIGHT 209 581-5645 www.axa-equitable-ag.com [email protected]

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® Education for Agribusiness The FARMit program offers training on the topics that are applicable in day to day business operations. From communications and employee relations to property transactions, finances and efficiency, you will find a class to fit your needs. Owner/operators, farm managers and agricultural consultants as well as lenders, brokers, crop consultants and PCAs will find something of value in the FARMit® course list. Custom training programs are also available. Contact us today to find out more about the FARMit® Education Program.

(209) 368-3672 [email protected] www.calasfmra.com

106 REGION EIGHT|MOUNTAINS REGION NINE|NEVADA

Region Chair and Committee David K. Bell, ARA - CHAIR Michael F. Merkley, ARA

General Comments There are numerous valleys rich in agricultural resources district for the next two years. There have been a few sales in the across the state of Nevada. Most of these valleys go unseen Lovelock area that indicate a stable market. In the Fallon area, from highways and roads that traverse the state. Nevada agri- there have also been some farm sales and sales of water rights culture is directed primarily toward range livestock production. that indicate no decline in value. In Mason and Smith Valleys, Cattle and calves are the leading agricultural industry. Cow-calf farm values appear to be stable, based on limited sale activity. operations predominate with a few stocker operators and The Walker River Restoration Program has had some impact feedlots. Nevada’s high desert climate is also very well suited on values in the Mason and Smith Valleys, as water purchases to the production of high quality alfalfa hay, which accounts for were concluded with some including deeded lands. There have over half of the total value of crops produced in the state. Much been a few comparable sales of alfalfa farms throughout Nevada of the alfalfa is marketed to dairies in California and a signifi- that rely solely on pumped ground water, which also indicate a cant quantity is exported overseas. Additional crops produced in stable market. A few cattle ranch sales have also occurred and Nevada include potatoes, barley, winter and spring wheat, corn, the sale prices are similar to the prior year. oats, onions, garlic and honey. Smaller acreages of alfalfa seed, Overall, the Nevada agricultural real estate market remained mint, turf grass, fruits and vegetables are grown throughout fairly stable throughout 2017. the state. Within the State of Nevada, comparable sale activity has been consistent with prior years. There has been relief in drought conditions because of the average winter in 2015/2016 and the above-average winter of 2016/2017. In 2016, alfalfa and cattle prices had softened to levels that were substantially lower than the past few years. Comparable sale data indicates that there have been no effects on real estate values because of the softening in alfalfa and cattle prices in 2016. More recently in 2017, alfalfa and cattle prices have strengthened. In the Lovelock area water supply concerns were alleviated by the recent wet winter. There was adequate irrigation water from Pershing County Water Conservation District and there is water stored in Rye Patch reservoir to supply irrigation water to the

108 REGION NINE|NEVADA REGION NINE 109 N/A None/Stable None/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable ACTIVITY / TREND in Agricultural Land & Lease Values Agricultural Land & Lease in ® 2018 TRENDS N/A N/A N/A $25 - $30/AUM RENT RANGE $100 - $150 $100 - $150 $100 - $150 $100 - $150 $150 - $200 $150 - $400 $125 - $200 $100 - $150 $100 - $150 $100 - $200 33% Crop Share Stable/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable Limited/Stable ACTIVITY / TREND www.calasfmra.com GRAZING LAND Value per Acre GRAZING LAND Value VALUES: LAND LEASE and VALUES:

GRAZING PERMITS Value per AUM GRAZING PERMITS Value $3,000 $3,500 $4,000 $4,000 $8,000 $8,000 $3,000 $5,000 $7,000 ------$80 - $200 $100 - $500 $500 - $2,000 VALUE PER ACRE PER VALUE $5,500 - $9,000 $7,000 - $10,000 $2,000 - $3,000 $2,500 $3,000 $3,000 $3,000 $5,500 $5,500 $2,400 $3,000 $5,000

NORTHERN NEVADA IRRIGATED CROPLAND Value per Acre CROPLAND Value IRRIGATED NEVADA NORTHERN NORTHERN NEVADA CATTLE RANCH OPERATIONS Value per AU Value OPERATIONS RANCH CATTLE NEVADA NORTHERN potatoes, forage, grains, mint, alfalfa seed, garlic, turf, bean seed, honey, honey, bean seed, turf, garlic, alfalfa seed, mint, grains, forage, potatoes, alfalfa, livestock alfalfa, bedding plants livestock, dairy, alfalfa, melons, vegetables, grains, forage, melons livestock, dairy, alfalfa, grains, forage, grapes onions, garlic, livestock, dairy, grains, pasture, forage, livestock pasture, grains, forage, livestock carrots, grains, alfalfa, livestock timothy hay, alfalfa, grains, forage, livestock onions, peas, livestock alfalfa seed, grains, forage, livestock turf, apples, potatoes, grains, forage, livestock vegetables, potatoes, turf, dairy, alfalfa, corn, garlic, onions, livestock grains, forage, livestock turf, pistachios, pecans, row crops, melons, grains, forage, livestock honey, grains, forage, alfalfa seed, livestock vegetables, onions, potatoes, turf livestock, dairy, potatoes, garlic, onions, grains, forage, livestock grains, forage, NEVADA AGRICULTURAL COMMODITIES BY COUNTY AGRICULTURAL NEVADA CLARK DOUGLAS ELKO ESMERALDA EUREKA LANDER CARSON CITY LINCOLN LYON MINERAL NYE PERSHING STOREY WASHOE WHITE PINE CHURCHILL HUMBOLDT LAND USE Elko/Diamond Valley/Reese River Valley Winnemucca Area Kings River/Silver State Valley Orovada Carson Valley Smith Valley Mason Valley Lovelock Desert Operation Range Operation Dry Grazing (Range) Pasture/Meadow Grazing Permits Inside Operation Lahontan Valley (Fallon) 8

3 4 5 6 7 9 1 2

10 11 12 13 14 15 16 17

REESE RIVER $2,500 - $3,000 $2,500 - $3,200 $2,500 - $3,200 $2,500 - $3,000 $2,500 - $3,000 $1,800 - $2,200 $1,800 - $2,000 ELKO, DIAMOND VALLEY, ELKO,

AREA WINNEMUCCA $3,000 - $3,500 $3,000 - $3,500 $3,000 - $3,500 $2,500 - $3,000 $2,500 - $3,000 $2,000 - $3,500 $1,800 - $3,000

KINGS RIVER/ $3,000 - $4,000 $3,500 - $4,200 $3,500 - $4,200 $2,500 - $3,500 $2,500 - $3,500 $2,000 - $3,500 $1,800 - $3,000 VALLEY STATE SILVER

OROVADA $3,000 - $4,000 $3,500 - $4,200 $3,500 - $4,200 $3,000 - $3,500 $3,000 - $3,500 $2,000 - $3,500 $1,800 - $3,000

CARSON VALLEY $7,000 - $10,000 $7,000 - $10,000 $7,000 - $10,000 $7,000 - $12,000 $7,000 - $12,000 $7,500 - $15,000 $10,000 - $20,000

SMITH VALLEY $5,500 - $8,000 $5,500 - $8,000 $6,000 - $8,000 $5,500 - $8,000 $5,500 - $8,000 $5,000 - $8,000 $5,000 - $10,000 HISTORICAL VALUE RANGE per acre HISTORICAL VALUE $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

------

MASON VALLEY DESERT OPERATION $5,500 - $8,000 $5,500 - $8,000 $6,000 - $8,000 $5,500 - $8,000 $5,500 - $8,000 $5,000 - $7,500 $5,000 - $10,000 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,000 $1,200 $1,500 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $2,000 $2,000 $1,500 $1,200 $2,000

------

LOVELOCK $500 $500 $500 $500 $500 $500 RANGE OPERATION PASTURE/MEADOW $2,000 - $3,000 $2,000 - $3,000 $2,300 - $3,000 $2,300 - $3,000 $1,800 - $2,500 $1,500 - $2,300 $3,000 $3,000 $2,500 $3,000 $3,000 $3,000 $2,000 $1,000 $2,000 - $3,000 $200 $200 $120 $120 $120 $150 $300 $300 $7,000 $7,000 $7,000 $7,000 $8,000 $1,000 $500 $500 $300 $300 $7,000 $200 $500 ------

(FALLON) $80 $80 $80 $80 $75 $80 $75 $75 $80 $100 $100 $100 $100 $100 GRAZING PERMITS VALLEY LAHONTAN INSIDE OPERATION $6,000 - $9,000 $6,000 - $9,000 $6,000 - $8,000 $6,000 - $8,000 $5,000 - $7,000 $4,000 - $8,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,500 - $9,000 $5,000 DRY GRAZING (RANGE) LAND USE 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 2016 2015 2014 2013 2012 2011 CROPLAND IRRIGATED NORTHERN NEVADA 2017 LAND USE PER AU) (VALUE RANCH OPERATIONS CATTLE NORTHERN NEVADA 2017 LAND USE PER AUM) GRAZING PERMITS (VALUE 2017 LAND USE PER ACRE GRAZING LAND VALUE 2017

110 REGION NINE|NEVADA REGION NINE 111

7 5 3 1 9 7 5 3 1 9 7 5 3 1 9

$0 $0 201 201 201 201 200 $0 201 201 201 201 200 201 201 201 201 200

Dry Grazing/Range Dry

0 $2,50

$2,000

$500

0 $5,00

in Agricultural Land & Lease Values Agricultural Land & Lease in w

Pasture/Meado ® $4,000

0 $7,50

$1,000

$10,000 $6,000

$1,500 2018 TRENDS $12,500

$8,000

0 $15,00

$2,000

$10,000

$17,500 ) AU (per ) acre (per

CATTLE OPERATION CATTLE E VALU LAND GRAZING y Valle Carson

$12,000 $20,000 $2,500

9 7 5 3 1 9 7 5 3 1 7 5 3 1 9 7 5 3 1 9 7 5 3 1 9

200 $0 201 201 201 201 200 201 201 201 201 201 201 201 201 200 201 201 201 201 200 $0 201 201 201 201 200

$2,500 $2,500

$5,000 $5,000

www.calasfmra.com

$7,500 $7,500

$10,000 0 $10,00

$12,500 0 $12,50

$15,000 0 $15,00

& Antelope & Paradise & Winnemucca & Paradise

, River Reese

, State Silver $17,500

0 $17,50

Elko, Diamond, Elko, yM Valle Lahontan rovada, Kings River, Kings rovada, sO Valley Smith & ason Lovelock

$20,000 0 $20,00 COPYRIGHT|DISCLAIMER

continued from page 4 Copyright Notice, Rights, The California Chapter, ASFMRA may and Permissions charge a reasonable fee for any use that management of agricultural proper- it permits. The fee may be based on the ties. ASFMRA is the only appraisal This publication and the individual type and amount of material used, the organization that offers a curriculum articles and material herein are copy- method and manner of use, whether the specifically based on the appraisal righted by the California Chapter, use is for commercial or non-commer- and management of agricultural ASFMRA and/or the respective author(s) real estate. cial purposes, among other factors. and are protected by United States and The California Chapter, ASFMRA international laws. All rights have been provides this publication “as-is” and reserved. Any unauthorized reproduc- makes no warranty of any kind, express tion, distribution, transmission, public or implied, including but not limited to display or performance, or preparation any warranties of merchantability or of a derivative, of this publication or the fitness for a particular purpose. To the individual articles or material herein, in extent that you make any use or reliance print, electronic, multimedia, or other on this publication or the information, form, is expressly prohibited under Title views, or opinions expressed herein, 17 of the United States Code and its you expressly agree that (i) California foreign counterparts. Chapter, ASFMRA shall not be liable for No portion of this publication may any loss or damage directly or indirect- be used, for commercial or non-com- ly caused by such reliance and (ii) you mercial purposes, without the advance will indemnify and hold harmless written permission of California California Chapter, ASFMRA, its Chapter, ASFMRA. Written permis- officers, directors, and members from sion may be obtained by contacting any loss or damage directly or indirectly the following: caused by such reliance. California Chapter, ASFMRA Attn: Copyright Permissions P.O. Box 838 Woodbridge, CA 95258 Tel: (209) 368-3672 Fax: (209) 368-3602 Email: [email protected]

112 REGION NINE|NEVADA GLOSSARY

% Crop Share: Rent paid as a percent- Desert Operation: 50 to 100% outside Free Tonnage: Raisin tonnage age of gross income from crop sales, grazing (public grazing permits) received by a handler, for which sometimes with a guaranteed minimum. Double Crops: A second crop that can the only Federal marketing order This type of rent transfers some crop risk be planted in the same season, and on regulation is a minimum quality or from the tenant to the landowner, usually the same land, after the first crop has size standard. resulting in a higher level of potential been harvested. Grape Contracts: A written agreement profit. DOV—Dried on the Vine: A manner in between the buyer of grapes (typically Adaptability: The suitability of the land which raisin grapes are harvested which a winery) and the grape grower speci- for use with higher valued crops. allows for their drying while they remain fying the terms and conditions of the Ancillary Markets: A market other on the vine instead of being separated agreement. The contracts typically than what is commonly perceived as from the vine and laid on trays on the include the price per ton, time period, being the primary or historical use for ground. Typically require upgraded acceptible brix (sugar), variety, acreage, the property. trellis systems. and minimum quality standards. AU: Animal Unit, which is considered a ENID: El Nido Irrigation District Groundwater: A sub-surface water cow calf pair. (Merced County). source, usually underground aquifers tapped with deep wells. AUM: Animal Unit Month, which is a Early Fruit: Fruit that is harvested cow calf pair per month. during the very earliest part of the IID: Imperial Irrigation District. IID delivers water to over 450,000 acres of AVA: American Viticultural Area. A overall growing season. This fruit typically receives higher prices highly productive farmland in southern- geographical area designated by the most Southern California. United States Alcohol and Tobacco because it is the first to reach Tax and Trade Bureau (TTB) as having the consumer. Inside Operation: 0-15% outside homogenous growing conditions for Entitlements: In the context of grazing (public grazing permits) wine grapes, such as climate, soils, and ownership, use, and/or development of Irrigated Field or Row Crops: Any topography. The name of the AVA may real property, the right to receive gov- crops that are irrigated for a season be used on a wine bottle, however if ernmental approvals for annexation, Late Fruit: Fruit thatis harvested during used, 85% of the wine must originate zoning, utility extensions, construction the latest part of the overall growing from the named region. permits, and occupancy/use permits. The season. This fruit usually receives higher Boutique Acreage: Small acreage approval period is usually finite and may prices because it is the last fruit to reach parcels where the grapes typically are require the owner and/or developer to the consumer. pay impact and/or user fees in addition used by the owner to make wine for his Marketable: Appeal to market for sale. or hers private labels marketed through to other costs to secure the entitlement. small Boutique wineries. Entitilements (sic) may be transferable, Market Consolidation: Process of subject to covenants or government concentrating the market in a smaller Cannabis: Marijuana, a drug derived protocols, may constitute vested rights, number of typically larger participants. from the family of plants that include and may represent an enhancement to a hemp. property’s value.” MID-Madera: Madera Irrigation District (Madera County). Cash Rental Rates: Cash money Exchange Contractors: The Central exchanged for the rental for real property. California Irrigation District, Firebaugh MID-Merced: Merced Irrigation District (Merced County). Cropland: Irrigated land suitable for Canal Water District, Columbia Canal field crops or row crops. Company, and San Luis Canal Company. MID-Modesto: Modesto Irrigation These entities exchanged their riparian District (Stanislaus County). CCID: Central California Irrigation rights on the San Joaquin River for a District (Exchange Contractor District. Milk Cows: Lactating cows that are being water right entitlement from the Delta- milked on a daily basis. Custom Crush: A service arrangement Mendota Canal. MWD: Metropolitan Water District whereby a winery processes grapes into Field Crops: Any of the herbaceous wine for a fee. is a consortium of 26 cities and water plants grown on a large scale in cultivat- districts that provides drinking water to Custom Farmed: Farmed or operated ed fields; primarily a grain, forage, sugar nearly 18 million people in parts of Los by a professional farmer or organization or fiber crop. Angeles, Orange, San Diego, Riverside, other than the owner. Forage Crops: Historically the term San Bernardino, and Ventura Counties. CWD: Chowchilla Water District forage has meant only plants eaten Nonbearing: Trees or vines that are (Merced and Madera Counties). by the animals directly as pasture immature, not old enough to bear a mar- cwt: Hundred weight. or immature cereal crops, but it is ketable crop. also used to describe chopped hay Delta Land: Land located in the or silage. Nonpareil: The premier almond variety Sacramento Delta region. in California.

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 113 GLOSSARY

OID: Oakdale Irrigation District. Soften: To lose value or decrease in Vineyard Designate: An individual Open Land: Unimproved or undevel- demand. vineyard’s name (often trademarked) oped land with adaptability to crops. Spot Market: The buying and selling that, when shown on a wine label, of agricultural commodities generally indicates the named vineyard supplied at Owner-Operated: Operated by the least 95% of the fruit for that wine. owner of the real property. on a one-year or one-time basis. Spot market sales are done through brokers Vinyardist: Grower of grapes on a wide Palo Verde Irrigation District (PVID): or directly between producer and range of parcel sizes under a wide range A privately developed district located processor, and are contrasted by sales of climate conditions. in Riverside and Imperial Counties, of commodities done via pre-arranged California near and around Bythe, Wastewater: Water produced as a contract or through membership in byproduct of an agricultural or industrial California. Water for irrigation is diverted a cooperative. from the Colorado River at the Palo Verde activity such as milk production or fruit Diversion Dam. Stabilized: Generally level or flat. and vegetable processing. Perfected Water Rights: Generally, Stable: Firmly established. Water Allocation: Term generally water rights that are established, docu- Stocker Cattle: Weaned calves that are used to describe the amount of surface mented, and approved by the California held over for another grazing season or water provided to a property by the State Water Resources Control Board. year for the eventual sale to feedlots. district provider. Per Unit Values: Values or prices on a Super High Density Olive Planting: Water Banking: The act of storing per unit basis such as acres, cows, square a system of planting olives specifically water, either physically or legally, for feet, etc. for the production of olive oil, whereby use at another time. Physical water trees are densely spaced in hedgerow banking can be done in public or private Plottage: Land purchased to add to reservoirs or in underground contained adjoining/neighboring acreage. configuration and suitable for mechani- cal harvest with an over-the-row type aquifers. Premiumization: The move towards machine. White Areas: Unincorporated areas that more expensive premium products. Surface Water: A typically renewable are not within the jurisdictional boundar- Rangeland: An extensive stretch of water supply that flows in channels ies of a public water agency. grazing land or land that produces forage along the surface of the earth. In this plants. context said water is typically irrigation Recreational Land: Can generally be water that is provided by rivers, irriga- described as the current use for lands tion companies or water districts. that historically were used for grazing Terroir: The set of special charac- or farming, but are now being purchased teristics that the geography, geology and used for leisure uses such as hunting, and climate of a certain place, interact- trapping, fishing, wildlife preservation ing with plant genetics, express in agri- or nature study. cultural products; the term is primarily Rent Range: The low and high values used in the wine industry, but also used in a data set of rental rates (annual unless for coffee, tea, artisan cheese, etc. otherwide noted). TID: Turlock Irrigation District Reserve Tonnage: The raisin tonnage (Stanislaus and Merced Counties). set aside as authorized by a Federal Topography: Elevation(s) or contour marketing order. of land. Resistant Rootstock: Vine or tree Transistional Property: Generally used rootstock varieties which have to describe a rural property where the tolerance or resistance to insects highest and best use is potential urban or diseases. development making existing agricul- Rootstock: A root and its associ- ture activities an interim use. ated growth buds, used as a stock in Trophy Properties: Properties that are plant propagation. typically purchased as much for the Share Rental Arrangements: Typically status of owning them as for their ca- landord’s percentage of gross crop pacities to produce a profit or support a proceeds in exchange for property rental. certain lifestyle. SLCC: San Luis Canal Company USBR: Irrigation Districts under the (Exchange Contractor District). United States Department of the Interior Bureau of Reclamation.

114 GLOSSARY NOTES

www.calasfmra.com 2018 TRENDS® in Agricultural Land & Lease Values 115 NOTES

116 NOTES

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