By California Farm Bureau
The value of much of California’s farmland declined from 2023 to 2024, according to figures published last month by the state’s chapter of the American Society of Farm Managers and Rural Appraisers.
Authors of the ASFMRA chapter’s annual Trends report attributed the declines in farmland value to multiple factors, including low commodity prices, high inflation and interest rates, overall high operating costs and regulatory impacts.
Since the adoption of California’s Sustainable Groundwater Management Act in 2014, appraisers have noted a divergence in the value of farmland with two reliable sources of water and so-called “white area” farmland that depends entirely on groundwater.
That trend accelerated last year, according to the report, with white area orchards in parts of the San Joaquin Valley losing more than half their value in the space of a year. The steep drop came as the California State Water Resources Control Board, the enforcement arm of SGMA, held the first probationary hearings under the landmark groundwater law.
The new phase of SGMA implementation “provided greater clarity regarding market pricing for permanent plantings and the underlying value of agricultural land,” with assessors focusing on whether growing tree crops will continue to be feasible in certain areas. “The market greatly reacted to areas where water was of greatest concern,” the report said.
In the northern San Joaquin Valley, for ex-ample, almond orchards in white areas lost roughly half their value from 2023 to 2024, according to Janie Gatzman, owner of Gatzman Appraisal in Stanislaus County and co-chair of the Trends report.
Gatzman said almond orchards in the area with reliable surface water lost up to 25% of their value due to persistently low prices, meaning the greater value declines seen in white areas were likely caused by groundwater concerns. “I would say over 25% of the value decline there was fully attributable to SGMA,” she said.
Independent of SGMA, winegrape vineyards in the Central Valley saw sharp declines in value due to a historic drop in demand for wine during the past few years.
Vineyards in the Lodi area lost 35% to 40% of their value from 2023 to 2024, Gatzman said.
For some farmers, the decline in land values combined with a lack of short-term profitability came to a head last year, leading to significant financial stress.
“In 2022 and 2023 operator profitability was not necessarily better, but they had either equity, savings, or lender support to get through the hard times,” the Trends report said. “At some point there is not enough equity or cash reserves, resulting in lender pressure and in some cases bankruptcy.”
The full Trends report can be purchased at calasfmra.com/ag-land-trends
