YAKIMA — The value of farmland continues to rise in Washington, largely because farm products are producing big sales numbers.
In Yakima County, the average sale price for irrigated, high-quality and vacant farmland rose 37 percent to an estimated $5,302 per acre between 2011 and 2014.
The Yakima Herald-Republic reported that existing farms push the price even higher. Statewide, the average price of farmland already cropped went up about 6 percent from $8,500 to $9,000 an acre between 2012 and 2013.
That’s according to Farmers National Co., a real estate and farm management firm based in Omaha, Neb.
Flo Sayre, a Farmers National land consultant in Pasco, credits everything from rising incomes in China to an aging baby boomer population reluctant to sell rural acreage. She also called this a business-savvy generation of farmers and investors with college degrees and long-term plans.
Each month, Sayre gets calls from 20 or so investor groups looking to purchase farmland in eastern Washington. She usually strikes out.
“No matter how much you beat the bush, nobody is going to sell,” she said.
Sayre, part of a family now in its fifth generation of farming in several eastern Washington locations, suspects growers at retirement age hold on to land to avoid paying capital-gains taxes and because lease rates are also high.
Nationwide, some real estate analysts earlier this year predicted price declines that didn’t happen, Sayre said.
“People say that the bubble is going to burst,” Sayre said. “I don’t think it’s going to burst. I think it’s just there to stay.”
Like many farmers, Todd Newhouse tries to expand when he can, purchasing adjacent properties when the opportunity arises.
The high prices are “not necessarily a good thing unless you’re selling,” said Newhouse, owner of Upland Vineyards in Sunnyside.
Horse Heaven Hills grower Dan Andrews said the high prices reflect a “land grab.”
Farm products such as wine grapes and hops are in such high demand that large companies hardly waste time negotiating or shopping around for lower prices, said Andrews, partner-manager for Andrews and Rowe farm in Alderdale.
Those companies often ask farmers to find land for new acres and then guarantee the growers contracts at high prices per volume.
The $10,000-per-acre price that once sounded ludicrous isn’t so far out of reach considering it costs about $7,000 per acre to start wine grapes, Andrews said.
