Prices for ag land hold steady in Merced area

Established orchards attracting investors.

January 26, 2011 

SUN-STAR PHOTO BY BEA AHBECK Pete Bandoni, with Bandoni, Inc., Realty & Land, stands in the field of a property for sale off G Street in north Merced, Calif. Tues. Jan. 25, 2011.

BEA AHBECK — Merced Sun-Star

Good soil and lots of available water have helped make Merced County agriculture the engine that drives the county.

That same soil and water have helped keep prices for agricultural land stable, unlike home prices, which have tanked in the past few years.

Pete Bandoni, a Merced grower, has been farming all his life and has been in the land sales business for 40 years. "What makes land valuable is water," Bandoni said. "In Merced County, we have a lot of dual service water -- surface water and underground water."

Because of the availability of water, Bandoni said that though land prices may not have risen much, they haven't dropped either. "Our surface water is very, very good and very desirable," Bandoni said. "We have people from out of the county, and out of the country, looking to buy ag land now."

Bandoni said buyers from India and Mexico have been looking for land with established almond orchards or land that can be used for orchards.

Jerry Furtado, a senior appraiser with Yosemite Farm Credit in Merced, said he's seeing the same demand for almond orchards. "The price for almonds has been good for growers for the past few years and growers have been able to expand," Furtado said.

In the past couple of years, the dairy situation has been a major force in local land sales, according to the California Chapter of the American Society of Farm Managers and Rural Appraisers.

Most dairies in the county operated at a loss in 2009 and most of 2010, and few dairymen have been looking to expand their operations. In the past, dairymen would buy land near their dairies to grow crops on or to use to dispose of dairy wastewater. That came to an abrupt halt when milk prices dropped and feed prices went up.

"There is some optimism in the dairy industry now," Furtado said. "It needs to get better, but we've seen some adjustment in milk prices, so hopefully it will get better."

While good ag land held its worth, there was less demand for rural home sites, Furtado said. "That's a direct correlation of what happened in the housing market," Furtado said.

On the Westside, the cutting of federal water to growers helped the rest of the county because growers want to move out of that area and into the eastern part of the county.

The rangeland in the foothills of eastern Merced County and Mariposa County held its worth in 2009, but the number of parcels for sale went down.

The land with the most worth in the county was land served by the Turlock Irrigation District. That land went for $15,000 to $22,000 an acre. Land used for almonds or walnuts held the next highest worth, with land selling for $12,000 to $20,000 an acre.

Reporter Carol Reiter can be reached at (209) 385-2486 or creiter@mercedsun-star.com.

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