Keeping New Jersey s Preserved Farmland Available for Farmers. SADC Presentation for Counties

Transcription

1 Keeping New Jersey s Preserved Farmland Available for Farmers SADC Presentation for Counties 2007

2 Why We re the Garden State Nearly 10,000 farms, more than 805,000 acres of active farmland >$866M in annual farm cash receipts, ~$1.5 billion ag industry, $82B agriculture and food complex Among the top 5 producers nationally of cranberries, blueberries, peaches, bell peppers, and lettuce History of public and legislative support for protecting and sustaining agriculture: Farmland Assessment, Right to Farm, Farmland Preservation, Preservation Bond Issues, GSPT

3 New Jersey s Investment in Farmland Preservation Since inception of the Farmland Preservation Program in 1983: New Jersey has made a more than $1B investment in farmland preservation 2/3 state, 1/3 local All 21 counties and 231 towns with their own dedicated preservation tax

4 How Well Is New Jersey s Farmland Preservation Program Working? Significant agricultural land mass protected from development Over 1,600 farms covering more than 160,000 acres have been preserved or 20% of all available agricultural lands the highest percentage in the nation Continuing strong demand for preservation and for preserved farms

5 How Available Is New Jersey s s preserved farmland to Farmers? NJ agricultural land among highest-priced in the nation 2007 Average farm real estate : $11,300 (NASS-NJ) 4 th behind RI, MA, CT 2007 Average cropland : $11,900 (NASS- NJ) 1 st among states that publish it Farmland preservation helps make farmland more affordable because it removes development potential However, values for preserved farmland keep rising

6 Northwest Value/acre $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Northwest -- Sussex and Warren $4,902 $1, $9,408 $3,894 average before average after *All averages are weighted averages (total cost/total acres)

7 North Central North Central -- Mercer, Middlesex, Somerset, Hunterdon, Morris $45,000 $40,000 $40,201 Values/acre $35,000 $30,000 $25,000 $20,000 $15,000 $13,307 $14,326 average before average after $10,000 $5,000 $3,789 $

8 South Central South Central -- Monmouth, Burlington, Ocean Values/acre $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $10,481 $3,035 $38,857 $10,455 average before average after $

9 South South -- Cumberland, Cape May, Salem, Gloucester, Atlantic Values/acre $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $4,773 $1, $12,634 $3,378 w eighted average after w eighted average before value

10 Statewide $45,000 $40,000 $35,000 $30,000 Values/acre $25,000 $20,000 $15,000 $10,000 $5,000 $0 $1, $ $7, average appraisal after

11 Appraisal Value Trends -- Statewide Statewide totals Valued In Number of Farms Number of Acres Ave. before Ave. after ,736 $5,852 $1, ,361 $6,333 $1, ,876 $6,054 $1, ,352 $6,034 $1, ,812 $6,734 $1, ,776 $6,461 $2, ,140 $9,833 $3, ,576 $9,827 $3, ,748 $10,216 $3, ,550 $13,110 $4, ,343 $15,055 $5, ,005 $22,832 $7,667 Total data analyzed 1,963 farms and 170,275 acres over 11 years

12 Statewide Resale Values $45,000 $40,000 $35,000 Value/acre $30,000 $25,000 $20,000 $15,000 $11,334 average actual resale $10,000 $5,000 $0 $1, $3,

13 Resale Value Trends -- Statewide Statewide totals Valued in Number of Farms Number of Acres Ave. resale price/acre ,022 $1, ,076 $3, ,097 $2, ,545 $2, ,849 $3, ,324 $3, ,416 $3, ,260 $4, ,586 $6, ,789 $5, ,007 $8, ,056 $11,334 Total data analyzed 280 farms and 29,027 acres over 11 years

14 Appraisal and Resale Value Trends -- Statewide $45,000 $40,000 $35,000 average appraisal after Values/acre $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $1,950 $11,334 $7,667 average actual resale $0 $1,

15 How Does That Compare With Farmer Earnings? What are the agricultural income requirements to be able to cash-flow $11,000+/acre purchase price? What sectors of the ag. industry can meet this income threshold? What is the impact to the ag. Industry???

16 More questions we re looking at How affordable has farmland been in the past: e.g. over the last 30, 50, 70 years? (look at price of land vs. average farm income over time)? What is the impact of recent value trends on the average farm vs. the heart of the ag industry farm (in terms of economic activity)? How much do improvements (e.g. residential) contribute to increases in value? How is the contributory value of improvements affected by the size of the farm?

17 What Contributes to High After Values? Who s Buying Property and their motivation for buying it Attractiveness to non-farmer users (residential value) Farmers of higher-value crops willing to pay higher prices Farmers who are relocating with a 1031 exchange (a powerful tax benefit) able to pay more

18 Who s s Buying Preserved Farmland? Anyone (farmer and non-farmers alike) may buy a preserved farm Some farms resold at estate values Non-farmer estate buyers may out-bid NJ farmers for preserved agricultural land But, majority (74%) of recent SADC feesimple auction sales have gone to farmers or those in agricultural/horticultural industry

19 Farm County Current Occupation or Proposed Use SADC recent fee simple auction sales 74% (20/27) purchased by farmers or related ag/hort businesses 26% (7/27) sold to non-farmers 11 of the 20 farms sold to farmers went to horticulture (nursery, sod, floral) - 55% Will want to expand this small sample Kilby Salem Nurseryman Stafford Camden Non-farmer Evans Hunterdon Nurseryman Piney Hill Warren Floral operation Lau Cumberland Vegetable operation Mattera Cape May Vineyard Magyar Warren Non farmer Cedarland North Mercer Vegetable farmer Cedarland South Mercer Vineyard Krystal Mercer Vegetable farmer North Princeton Somerset Sod farmer Marlboro Monmouth Nurseryman Lennox Mercer Floral operation Bielanski Mercer Orchid grower Lengyen Mercer Non-farmer McDonough Warren Nurseryman Fisher Hunterdon Non-farmer Cavalier Hunterdon Non-farmer Sarkuni Middlesex Nurseryman Hanst Salem/Glouc. Non-farmer Doyle Salem Grain/vegetable farmer Chase 1 Monmouth Nurseryman Chase 2 Monmouth Nurseryman Hunt Mercer Aquaculture Visceglia Monmouth Non-farmer Russell Burlington Equine Romano Hunterdon Fruit and vegetable

20 What s s the Effect of Non-Farmer Interest in Preserved Farmland? Advantage Farmers can t afford to own all the land they farm and need access to rented land Disadvantages Makes acquisition of land more competitive; narrows spectrum of ag enterprises on preserved farmland to high-value crops Major obstacle to new farmers who don t have access to land via the womb, tomb or the groom Increases tenancy, which can encourage lack of investment, stewardship, intensity

21 What Has the SADC Done? Fee Simple Program House size limit (3,500 square feet) A few farms resold without any houses/housing opportunities SADC Working Group Convened in 2004 Produced report with recommendations for agricultural community to consider

22 Task Force Ideas for Consideration (these ideas could only be prospective, not retroactive) Limit number and size of houses on preserved farmland Preserve land without housing opportunities (MA model) Consider modifying auction requirements to prohibit non-farmer participation Modify deed language to require farmland be retained in rather than for agricultural production (State Ag Convention resolution) Option to Purchase at Agricultural Value (an additional right purchased to ensure preserved farmland is resold to farmers at agricultural values MA and VT models)

23 Task Force Ideas - continued Recommend more secure lease terms for rented farmland Explore possibility of new non-profit agricultural land trust that could purchase, manage, and make land available to farmers (NJFB has created one) Increase collaboration with Farm Service Agency to preserve its inventory properties (FSA acquires these farms through foreclosure and auctions them, giving first priority to beginning farmers; they would be more affordable if preserved prior to auction)

24 What Do You Think? Is availability of preserved farmland for farmers a problem? If so, what should be done? Looking to agricultural community for input, solutions!

25 What Do You Think? More information online at: nj.gov/agriculture/sadc/news/hottopics/availability.html Send additional comments to: Questions? Contact David Kimmel (SADC): (609)

26 [End of presentation] For each county presentation, we had also included one slide depicting that county s appraisal value trends over time ( ). For reference, each of these 15 graphs is included on the following pages.

27 Sussex County Sussex County $45,000 $40,000 Values/acre $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $7,068 $3,926 $1,216 $2, average before average after Sussex County Valued in Farms Acres , , , , ,569 *All averages are weighted averages (total cost/total acres)

28 Warren County Warren County $45,000 $40,000 Values/acre $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $10,891 $4,785 $5,303 $2, average before average after Warren County Valued in Farms Acres , , , , , ,475

29 Morris County Morris County Values/acre $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $20,658 $52,409 $20,773 average before average after Morris County Valued in Farms Acres $5,000 $0 $4, ,079

30 Hunterdon County Hunterdon County $45,000 $40,000 $35,000 average before Values/acre $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $11,059 $3, $23,094 $10,720 average after Hunterdon County Valued in Farms Acres , , , , , ,353

31 Somerset County Somerset County $100,000 $90,000 $88,483 average before $80,000 Values/acre $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $24,085 $28,662 $4, average after Somerset County Valued in Farms Acres

32 Mercer County Mercer County $60,000 $54,215 $50,000 Values/acre $40,000 $30,000 $20,000 $10,000 $0 $12,166 $6,914 $3, average before average after Mercer County Valued in Farms Acres

33 Middlesex County Middlesex County $55,000 $50,000 $51,984 $45,000 Values/acre $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $17,673 $9,833 $3, average before average after Middlesex County Valued in Farms Acres

34 Monmouth County Monmouth County $45,000 $40,000 $44,055 Values/acre $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $12,300 $13,405 $3, average before average after Monmouth County Valued in Farms Acres , ,425

35 Burlington County Burlington County $25,000 $21,703 $20,000 Values/acre $15,000 $10,000 $5,000 $8,412 $2,975 $6,015 weighted average before weighted average after Burlington County Valued in Farms Acres , , $ , ,

36 Ocean County Ocean County $65,000 $60,000 $55,000 average before $50,000 $45,000 average after Ocean County Values/acre $40,000 $35,000 $30,000 $25,000 $32,371 Valued in Farms Acres $20,000 $15,000 $10,000 $5,000 $16,285 $5,162 $11, $

37 Gloucester County Gloucester County $45,000 $40,000 $35,000 average before Values/acre $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $4,991 $1, $17,217 $3,405 average after Gloucester County Valued in Farms Acres , , , , , ,081

38 Salem County Salem County $45,000 $40,000 Values/acre $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $12,260 $3,049 $2,309 $1, average before average after Salem County Valued in Farms Acres , , , ,346

39 Cumberland County Cumberland County $45,000 Values/acre $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $9,056 $2,669 $3,734 $1, average before average after Cumberland County Valued in Farms Acres , ,112

40 Atlantic County Atlantic County $45,000 $40,000 $35,000 average before Values/acre $30,000 $25,000 $20,000 $15,000 $12,817 average after Atlantic County Valued in Farms Acres $10, $5,000 $0 $4,843 $4,541 $1,

41 Cape May County Cape May County $45,000 $40,000 Values/acre $35,000 $30,000 $25,000 $20,000 $15,000 $19,774 $18,000 average before average after Cape May County Valued in Farms Acres $10,000 $7, $5,000 $0 $1,

42 For further reference, the charts on the following 4 pages give the compiled, regional appraisal data used to create the presentation s 4 regional graphs (shown earlier in the presentation) of regional value trends over time.

43 Northwest Northwest Sussex and Warren Valued in Farms Acres Ave. before Ave. after ,358 $4,902 $1, ,615 $5,337 $1, ,964 $5,338 $1, ,166 $6,308 $2, ,630 $6,966 $2, ,044 $9,408 $3,894 *All averages are weighted averages (total cost/total acres)

44 North Central North Central Mercer, Middlesex, Somerset, Hunterdon, Morris Valued in Farms Acres Ave. before Ave. after $13,307 $3, $18,764 $4, $21,010 $6, $22,370 $9, $29,645 $10, $40,201 $14,326

45 South Central South Central Monmouth, Burlington, Ocean Valued in Farms Acres Ave. before Ave. after $8,820 $3, $12,397 $3, $13,052 $5, $18,457 $4, $18,440 $6, $35,016 $10,455

46 South South Counties Cumblerand, Cape May, Salem, Gloucester, Atlantic Valued in Farms Acres Ave. before Ave. after $4,773 $1, $4,220 $1, $3,603 $1, $6,119 $1, $8,364 $2, $12,634 $3,378