•Spring 2017

West Coast
CONTRIBUTION FROM CALIFORNIA OUTDOOR PROPERTIES
In response to increased global demand for healthy, nutrient-rich
nuts, much of California’s irrigated pastureland has been repurposed
over the past two decades to create orchards growing almonds,
walnuts and pistachios. Almond acreage alone has doubled over
the last 20 years, according to the Almond Board of California, an
industry advocacy group with more than a million acres currently
devoted to the crop. In 2011, the value of the California almond
harvest surpassed that of the state’s grape output, putting almonds
second only to dairy products among California’s top commodities.
Land broker Todd Renfrew, owner of California Outdoor Properties,
headquartered in Vacaville, Calif., says the trend has been a
dominant theme in the state’s agricultural real estate market.
“A perfect example is a ranch with irrigated pasture on which
you’re running cattle,” he says. “You have the grass, you have
the water, you have the soil. Given the demand for orchard
ground, though, those same resources can be put to use
differently, and you have a much larger income stream.”
Renfrew specializes in selling farms and ranches throughout
California. The pasture-to-orchards trend, he explains, has
played out statewide, most visibly in the agriculture-oriented
Central Valley. Long one of the world’s most productive farming
regions, producing everything from tomatoes to cotton, the valley
is now home to more than 6,000 almond growers who, according
to the United Nations’ Food and Agriculture Organization,
produce 60 percent of the world’s supply of the nut. In an effort
to meet global demand, many growers have expanded their
operations beyond the flat farm ground traditionally occupied by
orchards, planting trees in surrounding lowland hills.
“Demand has driven the switchover from pasture to orchards,”
Renfrew says. “There’s been a high demand for almonds, particularly
in the Asian market—India and China. There aren’t that many areas in
the world that can grow almonds. California’s one of them.”
Despite its recent dominance in the ag market, though, the trend
has shown signs of slowing. Prices for orchard ground have
begun to come down, and urgency among buyers has calmed
in comparison to the activity of recent years. “There’s still a big
demand for almond and walnut trees,” Renfrew explains. “But
buyers aren’t willing to pay as much as they have been paying.”
Still, California orchard properties continue to command serious
money. A buyer selecting from currently available inventory might
expect to pay between $16,000 and $60,000 per acre.
Renfrew identifies other trends impacting the California land market:
an increased use of mechanical harvesters raising efficiencies,
and thereby profits, in the grape and olive industries; and ongoing
interest among landowners in pursuing conservation easements. It
is the recent break in California’s five-year drought, though, that has
landowners, investors and brokers feeling most enthusiastic.
“In the last few years, many properties still had the soil, but not
the water,” Renfrew says. “Landowners drilled more wells, going
deeper and deeper, which impacted the water table. In 2016,
we had a tremendously wet year. The dams are full, so it’ll be
interesting. There’s some question as to whether some of these
orchards have been planted in areas where the water table might
come up, and whether that will have an impact on the trees. Still,
the rain we’ve had has people excited, and we’re optimistic about
the market.”
Lands of
yesterday may not,
or will not, be the
lands of tomorrow.
Lands of yesterday may not, or will not, be the lands of tomorrow.
It is important for all of us to work towards this balance of wildlife
and production. Many times we see these two collide and not work
together. This, however, does not have to be the case. I am lucky
to work for companies who care about the land, the landscape
and its people. It is important to always leave the land better that
you found it. That is whether you own it or are just visiting. I have
been reading the horror stories from the Midwest fires in Kansas,
Nebraska and Oklahoma and I feel for those passionate farmers
and ranchers dealing with death and devastation. I pray for those
families who have lost loved ones and look towards the spring and
greener grass.
The constant evolution of these properties and knowing the market
trends and potential valuation is what our team of licensed land
brokers and agents can offer our clients. When you look to buy
real estate, keep in mind that what you purchase today could be
modified and enhanced for tomorrow—and might just help you
keep it for generations to come. °
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