California farmland value is not good. Nick Foglio from Foglio Commodities says farm ground is depreciating because 90% of the commodities you farm today don’t produce enough cash flow to service. The debt and farming cost are so high like fuel, labor, insurance, fertilizer, and pesticides among others.
FID ground is still trading at $32,000 to $42,000 per acre depending on what’s planted, and it needs to be $15,000 to $20,000 per acre. Some family-owned farmers are selling out even if the ground has zero debt and it’s hard to make a cash flow. A lot of ground was bought with adjustable interest rates, and when rates went up, the Allmond prices went down, and big investment firms had to start offloading ground.
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