The Rabobank study was co-authored by a Fresno Ag Economist. Vernon Crowder says U.S. nut orchards and prime farmland around the Valley are still in high demand.
Madera County Rancher Bruno Pelanconi says so many investors are buying up cropland it's tough for everyday farmers to expand. "It's making it more difficult for us. For the prices they're buying the land for you can't afford to buy it to go into farming."
A new report from Rabobank concludes rising Ag land values are propped up by high commodity prices.
Crowder says short-term speculators who drove up housing prices prior to the market collapse aren't buying up farms. "There's a lot of interest by investors in California farmland but they're typically long-term investors, pension funds, private parties that intend to hold for a long time."
Crowder expects Ag land values to rise for another year. They're likely to decline over the next decade but he says we won't see a crash. "We may see a modest correction in the next 3-7 years."
Pearson Realty Senior Vice-President Dan Kevorkian agrees with the Rabobank report. Ag property prices he says are boosted by a limited amount of land for sale and low interest rates. "We don't see high leveraged purchases that are subject to foreclosure in the same way we saw in a widespread basis in the residential market."
Kevorkian says the people most interested in buying up farmland right now are farmers. Vernon Crowder's report says cropland values are also boosted by growing global demand for California nuts and fruits. He adds the demands are sustainable.
