Do The Avocado Trees Add Value?

[George Hatch]

Big water reductions for Avo growers went into effect a couple years back. Even the growers on wells are running into limitations, and we can anticipate those limitations will increase going forward.

Just like any other crop, some years are better than others. If you really plan to do an income analysis on 14 acres of grove (I wouldn't) then you'll want operating income statements going back several years and working off the trend, not just a single year's income.

My guess is that the HBU for 3 existing parcels of 6, 5 and 3 acres with water and access is 3 custom homesites. The avos would be akin to landscaping. I can almost guess that if you're in so. Riverside or N San Diego Counties that all or almost all the land sales will be planted in either citrus or avos and they'll all be marketed as SFR sites, not as commercial groves.

 

[CANative]

I have a lot of clients in the Riverside, SD, and Fallbrook area with small tracts of avocados. Some are improved with residences, some just land (usually residential type of zoning or zoning that allows either/or/both). I've never been able to discern a difference in pricing which can be all over the place. People who buy property to live in their dream house thinking how nice it's going to be when somehow the crops (avocados, grapes, cherry or almond trees) get sold are in for a hard lesson if they paid extra. It's a lot of work with a lot of competition and calls for generations of experience.

 

[Tim The Enchanter]

I'd like one just for the Avocados. But caring for acres of them and harvesting is another deal and big job for sure.

 

[George Hatch]

How would you like to raise a crop and have it stolen because you weren't onsite to provide security? That happens on a regular basis in this region. Sheriff deputies occasionally cruise the swap meets and Farmers Market stalls to spot avos and citrus that have been "inexpertly" harvested.

 

[gregb]

Plenty of avo competition from outside the USA.

http://www.missionpro.com/avocadosourcing.html

 

[Terrel L. Shields]

They would be valuable to me....I love 'em. Met an 80 year old concrete finisher (talk about tough old bird) who swore that one a day was as good as medicine. It was certainly working for him. But as a practical matter, I bet you find that while producing income, the land value is pretty much the same as it would be for a building site, thus I might discuss the income side of the equation in length, I would probably conclude that the HBU is either a residence (as if vacant) or "as is" presently and the income would not be considered. So I would want to find other comparables with avocados similarly situated and that might take you out of the immediate area...but I suspect the similarity of the property would be far more important than either age or proximity to other sales. And I might go on to explain why closer sales were ignored in favor of more similar properties.

 

[George Hatch]

I have a lot of clients in the Riverside, SD, and Fallbrook area with small tracts of avocados. Some are improved with residences, some just land (usually residential type of zoning or zoning that allows either/or/both). I've never been able to discern a difference in pricing which can be all over the place. People who buy property to live in their dream house thinking how nice it's going to be when somehow the crops (avocados, grapes, cherry or almond trees) get sold are in for a hard lesson if they paid extra. It's a lot of work with a lot of competition and calls for generations of experience.

That's been my experience as well with the small scall ag uses of all types in this region. Even the mature and producing vineyards around here don't seem to do much for the underlying site values when compared to other forms of landscaping.

 

[gregb]

There are some interesting numbers in this Calavo report:

http://www.calavo.com/pdfs/CAL57_AR13 Final.pdf

 

[CANative]

It's not like you can pick them yourself and throw them in the back of your F150 and deliver them to the produce manager at Safeway.

 

[gregb]

It's not like you can pick them yourself and throw them in the back of your F150 and deliver them to the produce manager at Safeway.

You got that right. My father has 2 acres of Haas avos. It is enough for him to maintain the watering and other light maintenance. A service does the major work, including picking and packing them and then selling the avos. Some years have been decent, some terrible, with costs way over gross income.