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 Front Cover
 Table of Contents
 Introduction
 Factors influencing the price of...
 Land prices and values, 1940-1...
 Summary and conclusions
 Appendix A - Statistical table...
 Appendix B - Procedure in collecting...














Group Title: Bulletin / University of Florida. Agricultural Experiment Station ;
Title: Agricultural land prices in Palm Beach County, Florida, 1940-1955 /
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Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00101439/00001
 Material Information
Title: Agricultural land prices in Palm Beach County, Florida, 1940-1955 /
Series Title: Bulletin / University of Florida. Agricultural Experiment Station ;
Physical Description: 76 p. : ill., maps ; 23 cm.
Language: English
Creator: Lassiter, Roy L ( Roy Leland ), 1927-
McPherson, W. K ( William Kenneth ), 1914-
Publisher: University of Florida Agricultural Experiment Station
Place of Publication: Gainesville, Fla
Gainesville, Fla
Publication Date: 1959
Copyright Date: 1959
 Subjects
Subject: Farms -- Prices -- Florida -- Palm Beach County   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references.
Statement of Responsibility: Roy L. Lassiter, Jr., and W.K. McPherson.
General Note: Cover title.
 Record Information
Bibliographic ID: UF00101439
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 18287727

Table of Contents
    Front Cover
        Page 1
    Table of Contents
        Page 2
    Introduction
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
    Factors influencing the price of agricultural land
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
        Page 43
        Page 44
        Page 45
    Land prices and values, 1940-1955
        Page 46
        Page 47
    Summary and conclusions
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
    Appendix A - Statistical tables
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
        Page 63
        Page 64
        Page 65
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
    Appendix B - Procedure in collecting land sale prices and mortgage data and computing average prices and values per acre
        Page 74
        Page 75
        Page 76
Full Text


February 1959


UNIVERSITY OF FLORIDA
AGRICULTURAL EXPERIMENT STATIONS
J. R. BECKENBACH, Director
GAINESVILLE, FLORIDA










Agricultural Land Prices in Palm Beach

County, Florida, 1940-1955



ROY L. LASSITER, JR., and W. K. MCPHERSON









TECHNICAL BULLETIN








Single copies free to Florida residents upon request to
AGRICULTURAL EXPERIMENT STATION
GAINESVILLE, FLORIDA


Bulletin 608















CONTENTS
Page

INTRODUCTION ...................... 3.............. .... ............ -- ------------ 3
Background, Objectives and Method of Study .-.............................. 3
Description of Palm Beach County .........- ..... .. ......... ...--------- 7

FACTORS INFLUENCING THE PRICE OF AGRICULTURAL LAND ..........................-- 12
The Demands for the Products of Land .......... ......... ....... ........ 12
The Quantities of Land Available -...........--........- ------- ....---- 17
Risks and Uncertainties ................. ....................... ..... ..... 22
Credit ............. .... ----------- --......-........ ..-...-.. 33
Technology ................---- ------...-.-----.. 36
Factor Substitution ....................... -...-------. ------..... ... 43

LAND PRICES AND VALUES, 1940-1955 ...................... .................... 46

SUMMARY AND CONCLUSIONS ...................... ........ ............ 48

APPENDIX A Statistical Tables ...............- --.......... ..----......--. 55

APPENDIX B Procedures in Collecting Land Sale Prices and Mortgage
Data and Computing Average Prices and Values per
A cre .........--...... ---..----- 74














ACKNOWLEDGMENTS

Many individuals aided in this study and their assistance and coopera-
tion is appreciated by the authors. However, the contributions of Mr.
W. Turner Wallis, then Executive Director, Central and Southern Florida
Flood Control District, were such as to require singular recognition.







Agricultural Land Prices in Palm Beach

County, Florida, 1940-1955'

RoY L. LASSITER, JR., and W. K. MCPHERSON 2

PART I

INTRODUCTION
BACKGROUND, OBJECTIVES AND METHOD OF STUDY
Prices of Florida land have been extremely sensitive to
changes in general economic conditions. During the mid-1920's
a wave of speculative trading carried land prices to a then record
high, but in 1926 prices fell sharply. This decline was accentu-
ated by the depression of the 1930's, during which title to sub-
stantial acreages reverted to various levels of government for
non-payment of taxes. At the start of World War II land prices
again began to rise and, after a pause following the cessation of
hostilities, continued to increase until the current all-time high
was reached.
Land market phenomena are exceedingly difficult to interpret.
Many social, economic, technical and climatic conditions have
some influence on land prices, but the nature and magnitude of
their influence is not well understood. In addition, land market
information is sketchy, and unfounded rumors of the selling
price of land often mislead both buyers and sellers.
Most of the early studies of agricultural land prices were
descriptive and emphasized such factors as tenure arrangements
and the perquisites of farm living. More recently, analyses have
been made of product-price changes, credit arrangements, size
of tract, voluntary and involuntary sales and resales. In general,
relatively little attention has been given to the theoretical frame-
work of factor pricing. 3
In this study an effort will be made to (1) identify and evalu-
ate the factors that contribute to changes in land prices and
values, (2) examine the adequacy of current factor-pricing the-
This report is based on a Ph.D. dissertation submitted by Roy L. Lassi-
ter, Jr., to the Graduate Faculty of the University of Florida, in January
1957.
2 Assistant Professor of Economics, College of Business Administra-
tion and Agricultural Economist, Agricultural Experiment Stations, re-
spectively.
For an extensive bibliography of agricultural land price studies, see
R. L. Lassiter, Jr., "An Analysis of the Movements in Agricultural Land
Prices and Values in Palm Beach County, Florida, 1940-1955," unpublished
Ph.D. dissertation, University of Florida, January 1957.








Florida Agricultural Experiment Stations


'< -- --,

<. "V ; I I- ---
/, I"'-_ H \ "
Jacksonville










/ _,__ I \




S Tampa I 0




--I 0
O-2

ee :
S hobee ::: :::::
" West Palm






LEGEND Miami
..\ I ~ ~I- -:iile i












____ County boundaries
Palm Beach County


Fig. 1.-Location map, Palm Beach County.

Fig. I.-Location map, Palm Beach County.







Agricultural Land Prices in Palm Beach County


ory as applied to the land market and (3) estimate the extent
of land price changes in a single county during a specific period.
The analysis of factor pricing is largely static. Static analy-
sis can be used to justify conclusions that are unrealistic in the
light of experience. However, it does define the impact of spe-
cific changes, even though these changes may be more than offset
by changes in other variables. In the summary some of the
overall changes that have taken place as a result of changes in
the several factors that affect land prices are identified.
Method of Study.-The complexity of the segment of the
economy in which land prices are determined made it necessary
to narrow the scope of this study to a single county. Palm Beach
County was chosen because: (1) it is located in the rapidly de-
veloping Southeast Florida area (Figure 1), (2) local, state and


LA 'E

OKEECHOBFE E I \%_,


AREA II






S. A RE A Ill


i;;.. --AR EA T. --- .R....
I* L" L -4






:.: .... ...... ..a.pl. .. .. .. ps

Legend
--------- County Boundary
...S...... DiSTion o3f Sub-Are
s Sample Tships

Fig. 2.-Major sub-areas of Palm Beach County and location of
the sample townships.







Florida Agricultural Experiment Stations


federal governmental agencies are cooperating in an extensive
effort to control and conserve water, (3) there is intense urban-
rural land use competition along its coast, (4) both mineral and
organic soils are used to produce agricultural commodities, (5)
the climatic conditions are relatively unique within the contin-
ental United States and (6) land transactions are recorded chron-
ologically in tract books.


Capability Class and Type of Soil
II -- Peat and Muck IV -- Sandy
III -- [M Peat and Muck V -- i Sandy
III -- I Sandy VIII -- Peat and Muck
IV -- Peat and Muck


Fig. 3.-Land capability classes in Palm Beach County. Source: L. A.
Jones et al., Soils, Geology and Water Control in the Everglades Region,
Fla. Agr. Expt. Sta. Bul. 442. 1948.

The first phase of the study consisted of assembling informa-
tion from secondary sources and interviewing farmers, bankers
and real estate agents. Three quite different types of agricul-
tural areas were delineated on the basis of the (1) use being







Agricultural Land Prices in Palm Beach County


made of land, (2) physical characteristics of the soil and (3)
extent to which facilities needed to control water are available
or anticipated. Within each of these areas representative sec-
tions and townships were selected and data describing land trans-
actions and mortgages were tabulated from the public records
for the period 1940 through the first half of 1955 (Figure 2).4
Per
Cent 9 0
0 o
0 0
100. 0

90 .


gO-
60


70













:
60
0 0















sn beans sweet corn _oab
50 Palm








Fig. 4.-Palm Beach County and Florida production of specified veg-
71 County
40















etable crops as a proportion of total United States production by seasons
(average 1949-53 for snap beans and cabbage, 1952-53 for sweet corn).
Source: USDA, Agricultural Statistics, Government Printing Office, 1950-
54, and USDA Crop and Livestock Reporting Service, Florida Vegetable
30


20


10









Crops, Annual Statistical Summaries, Orlando, Fla., 1950-54.

DESCRIPTION OF PALM BEACH COUNTY
Natural Resources.-The natural resource base of the major
n beans ISw w





Fisub-areas of Palm Beach County and Florida production of speified veg-neral
etable crops as a proportion of total United States production by seasons
(average 1949-53 for snap beans and cabbage, 1952-53 for sweet corn).



Source: USDA, Agricultural Statistics, Government Printing Office, 1950-
54,The demand USDA Crop and Lives are described porting Service, Florida Vegetable
Crops, Annual Statistical Summaries, Orlando, Fla., 1950-54.

DESCRIPTION OF PALM BEACH COUNTY

Natural Resources.-The natural resource base of the major
sub-areas of Palm Beach County have the following general
characteristics:

'The detailed procedures are described in Appendix B.







Florida Agricultural Experiment Stations


Soils.-The soils of Palm Beach County fall into two broad
categories: (1) the organic soils (peats and mucks) of the west-
ern portion of the county, of which a majority are land capability
Class III, with some Class II land located immediately around
the southern and eastern shore of Lake Okeechobee (Figure 3),
and (2) the sands of the eastern and northeastern areas. These
mineral soils are of low inherent fertility and are about evenly
divided between land capability Classes III and IV.


Per
Cent


100

90


so

70

60


50


40

30

20


Io

0


wi nt er I early spnng late Tall win ter early spring winner


Palm
Beach
County

B Florida


Screen peppers c elery escarole

Fig. 5.-Palm Beach County and Florida production of specified vege-
table crops as a proportion of total United States production by seasons
(average 1949-53). Source: USDA, Agricultural Statistics, Government
Printing Office, 1950-54, and USDA Crop and Livestock Reporting Service,
Florida Vegetable Crops, Annual Statistical Summaries, Orlando, Fla.,
1950-54.

Class II lands are defined as productive lands requiring special treat-
ment for successful cultivation; Class III lands are productive lands re-
quiring intensive treatment for successful cultivation; and Class IV lands
are those of limited productivity suited only to special crops or seasonal
usage. (See Generalized Land Conditions Map of Bulletin 442, University
of Florida Agricultural Experiment Stations.)


n


. 1 1 -


, , ,


S


, , , -,


c
+ "
N



~1In







Agricultural Land Prices in Palm Beach County


Topography.-The flat and relatively level lands of both the
Everglades and the coastal areas facilitate control of the water
table. The irrigation of the mineral soils is chiefly surface type,
while on the organic soils sub-surface irrigation and drainage is
accomplished by the use of the mole drain, rather than tile.
Pumps are necessary for both drainage and irrigation.
Climate.-The average rainfall in the county is about 60
inches per year and the winter temperatures relatively mild
(see Table 1. This and all other tables appear in Appendix A).


Per
Cent
50



40


Feld Crop Vegetable


FruitandNut Doiry Poultry Livestock General Miscellaneous


Fig. 6.-Percent of total farms by type of farm in Palm Beach County,
1944 and 1954. Source: Calculated from U. S. Department of Commerce,
Bureau of the Census, Census of Agriculture, Vol. I, Part 18, Statistics for
Counties, 1944 and same for 1954. See Appendix Table 2 for additional
data on land use in Palm Beach County.

Population.-The population of Palm Beach County has in-
creased approximately 100 percent in the last few years. How-
ever, most of the increase has occurred in the eastern part, par-
ticularly from West Palm Beach southward. This portion of
the county is highly urbanized, as contrasted with the western


F0


rW







Florida Agricultural Experiment Stations


and northeastern sections which are largely agricultural in
nature.
Agriculture.-The major agricultural products of the county
in declining order of economic importance are: fresh winter veg-
etables, sugar and sugar by-products, beef cattle, horticultural
specialties and dairy products (Table 2). In addition to being
the largest vegetable-producing county in Florida, Palm Beach
County supplies a major portion of the fresh vegetables for the
entire United States during the months of December, January,
February, March and April (Figures 4 and 5). Year-round for-
age for livestock can be produced on improved pastures.
Per
Cent
too00

10



<0

.0 199



o, 1954







SD
30

20d 3 e r por
o n
LOJ It^l I n^V "\ 0 '] 'N


ciS ors clOss I dossIl closs ll classlY class class farms
Fig. 7.-Percent of total farms by economic class in Palm Beach County,
Florida, 1949 and 1954. Source: Calculated from Census of Agriculture for
1949 and for 1954, Vol. I, Part 18, Statistics for Counties, U. S. Department
of Commerce, Government Printing Office, Washington.

Land Use.-The proportion of the total land area of Palm
Beach County in farms has risen steadily since 1940 (Table 3).
In 1954 farm land was used as follows: cropland 31 percent, pas-







Agricultural Land Prices in Palm Beach County


ture (other than cropland used for pasture) 47 percent, wood-
land not pastured 6 percent and other land 16 percent.
Farm Characteristics.-There have been significant changes
in the organization of agriculture in Palm Beach County in the
last 16 years. The pattern of agriculture has shifted from the
specialized production of fresh vegetables to a more diversified
type in which vegetable production plays a leading role, but is
relatively less important (Figure 6). Further, the farms of
the county have become more commercial and have increased
considerably in size and value (Figures 7 and 8).
Per
Cent 1 oo


I i] 1940
1954


UJir 30 30-99 100-179 180-259 260-499 500-999
Acres


J000. o

100000J over


Fig. 8.-Percent of total farms by specified size of farm in Palm Beach
County, Florida, 1940 and 1954. Source: Calculated from Census of Agri-
culture for 1944 and for 1954, Vol. I, Part 18, Statistics for Counties, U. S.
Department of Commerce, Government Printing Office, Washington, D. C.

Characteristics and Organization of Agriculture in the Sub-
Areas.-The important features of the agriculture in the major
sub-areas (Figure 2) can be summarized as follows:








Florida Agricultural Experiment Stations


Agricultural
Commodities in
Declining Order
of Economic
Importance


Scale of
Farm
Operations


Fresh vegetables, Large farms
sugar and sugar (except
by-products, beef those around
cattle and fiber Pahokee)
crops


Capital Labor
Requirements Require-
per Acre ments 6

Area I


Extremely
high


Extremely Intensive
high


Area II


Beef cattle,
citrus and
tomatoes


Large range
cattle
operations
predominate


Fresh vegetables, Medium to
horticultural Small
specialties and
dairy products


Low (except
for citrus
and tomatoes)


Area III
Extremely
high


Low (ex- Extensive
cept for (except
citrus and limited
tomatoes) acreages of
citrus and
tomatoes)


Extremely Intensive
high


PART II

FACTORS INFLUENCING THE PRICE
OF AGRICULTURAL LAND


THE DEMANDS FOR THE PRODUCTS OF LAND

Urban Demands for Land.-The population of Palm Beach
County increased from approximately 80,000 in 1940 to 157,000
in 1955.7 While this increase of 96 percent is significant, it is
by no means an accurate estimate of the extent of urbanization.
With steady growth in tourism, it is evident that more and more
land will be absorbed in such urban uses as tourist courts, restau-
rants and recreational facilities. Most of the population growth
has been concentrated in the eastern part of the county, par-
ticularly in Area III.
Added to the urban demands for land are the demands of
agricultural and recreational enterprises that rely on an urban-

See Tables 2, 4 and 5.
S1940 population from U. S. Census of Population. 1955 population
from the 1955 Special Census of Population (see April-May, 1956 News-
letter of the Florida Planning and Zoning Association).


Land
Use







Agricultural Land Prices in Palm Beach County


ized area for their existence. Dairying and production of horti-
cultural specialties are good examples of agricultural pursuits
that have developed rapidly in areas immediately adjacent to
the urbanized coast.
Speculative Activities.-Speculation can have profound in-
fluence on the price of land. In the Florida land boom of the
1920's, speculation reached feverish heights. During this period,
little of the increase in land market activity and prices could be
justified by the actual productivity of the land." Based on the


Number
of Deeds
Filed

20,000-
18,000
16,000-
14,000
12,000-
10,000-
8,000-
6,000-
,0ooo-
2,000-


1923 25


4o
Year


* Actual number of deeds filed.


X Estimated number of deeds filed. Data on the actual number
of deeds filed for the years 1923-1947 was not readily available.
The number of deeds was estimated on the basis of total number of
instruments filed by years.
Fig. 9.-Number of deeds filed in Palm Beach County by years, 1923-55.
Source: Mimeographed summaries of the Clerk of the Circuit Court, Palm
Beach County, Florida.

number of deeds recorded, land market activity in recent years
has not yet approached the peak of the earlier boom, even though
the population has increased substantially (Figure 9). Many
local observers believe that the current increases in land prices
and values largely reflect the enhanced productivity of the land

The terms "productivity" and "value productivity" refer to the net
value of the product of land.







Florida Agricultural Experiment Stations


for both agricultural and urban uses. On the other hand, when
the economy of any area experiences rapid growth, land prices
are affected by speculation. Speculative activities undoubtedly
have increased in anticipation of the completion of the Central
and Southern Florida Flood Control Project.
The Demand for Agricultural Products.-Changes in the agri-
cultural income of Palm Beach County reflect in part changes in
demand conditions as well as supply adjustments. Between 1940
and 1949 the total agricultural income of the county increased
appreciably in terms of both constant and current dollars (Table
6)." Further increases were realized by 1954.
Fresh Vegetables.-Although per capital consumption of
fresh vegetables has declined slightly since 1940, total consump-
tion has continued to increase with population and income.10
The increases in disposable income are of particular significance
to this county, since these changes tend to have a marked effect
on both the price of fresh winter vegetables and total expendi-
tures for these commodities." The reduction in per capital con-
sumption reflects changes in preference and particularly substi-
tution effects as consumers have substituted frozen vegetables
for the fresh product.'"
The demand for winter vegetables facing local producers may
be relatively inelastic for the following reasons:
(a) The over-all demand for fresh winter vegetables at farm
level is inelastic.13

Constant dollars or real values were determined by deflating with the
Index of Wholesale Prices, 1947-49 = 100, excepted where noted (see Ap-
pendix B).
o For changes in per capital consumption, see Agricultural Statistics
1956 (Washington: U. S. Government Printing Office, 1957), p. 250. The
United States population increased 24.9 percent, or by 32.8 million persons,
through 1955 while real per capital disposable income increased 31 percent
or by 350 dollars. Ibid., pp. 425 and 435. (Real per capital income was
derived by deflating current dollar figures by the Index of Consumer Prices,
1947-49 = 100).
Fox has estimated that a 1.0 percent change in disposable income
effects a 0.92 percent change in the price of fresh winter vegetables and
a 0.37 percent change in expenditures for these commodities. See Karl A.
Fox, The Analysis of Demand for Farm Products (Washington: BAE,
USDA, 1953), p. 65 and Ibid., Factors Affecting Farm Income, Farm Prices
and Food Consumption, Agricultural Economics Research, Vol. III, No. 3
(July, 1951), p. 81.
1" See Table 6 for shifts in production that have taken place as Palm
Beach County farmers have reacted to changes in demand structure.
Fox indicates that a 1.0 percent change in production affects the price
of fresh winter vegetables 1.13 percent. Karl A. Fox, The Analysis of
Demand for Farm Products (Washington: BAE, USDA, 1953), p. 65. This
is further qualified by stating that this probably understates the true effect
of production on price. The overall price elasticity coefficient for fresh







Agricultural Land Prices in Palm Beach County


(b) A significant proportion of the total national supply of
fresh winter vegetables is produced in the county and thus the
actions of local producers affect the national price appreciably.
(c) Even if retail demand for vegetables produced in Palm
Beach County were relatively elastic, marketing margins are such
that the farm level demand elasticity is reduced substantially.
With an inelastic demand facing local producers, a significant
increase in total revenue, coupled with a substantial increase in
output, are indicative prima facie that the demand for fresh
winter vegetables has increased. The output of fresh vegetables
has expanded appreciably (particularly in recent years) and,
with this expansion, real total revenue to the vegetable industry
also has expanded (see Table 7).14, 15
Cattle.-The number of cattle sold and total number on farms
in Palm Beach County have more than doubled between each
quinquennial Census of Agriculture since 1940 (Table 8).
Through 1949 the value in current dollars of livestock sold in-


vegetables is estimated to be -0.4. Ibid., H. G. Halcrow (ed.), Contempo-
rary Readings in Agricultural Economics (New York: Prentice-Hall, 1955),
p. 125. The coefficient of price elasticity relates the percent change in
quantity sold to a one percent change in price. Price elasticity is unity
when the change in quantity is proportional to the change in price, in-
elastic when the change is less than proportional and elastic when the
change is more than proportional.
For example, the carlot shipments of Palm Beach County increased
steadily from approximately 16,000 cars in the 1949-50 crop year to 33,458
cars in 1954-55 (1949-50 shipments estimated by altering Federal State Mar-
ket News Service rail shipment data to allow for truck shipments and move-
ments through the Pompano State Farmers Market that originated in Palm
Beach County) for data on other recent years, see Palm Beach County Re-
source Development Board, Resource Development Board News, Vol. XI,
No. 10 (July 1955). During this time, real total revenue increased by
approximately six million dollars (Table 6). Changes in the composition
of the vegetable products are responsible for part of the increase.
The percent change in national demand in terms of constant dollars
for fresh vegetables for the period 1940-1955 can be estimated as follows:
P.,
AD P +(AI -V) -
P1
Where: AD = the percent change in demand
AP = the percent change in population
AI = the percent change in real per capital income
V = the income elasticity of expenditure (i.e., the percent
change in expenditures associated with a one percent
change in income).
P, = U. S. population in 1940
P, = U. S. population in 1955
This change in demand amounts to 39.2 percent (see footnote 11 for the
source of the income elasticity coefficient). Considering that Palm Beach
County supplies a significant proportion of the fresh winter vegetables, it
undoubtedly has shared materially in this increase in demand although the
extent of the increase has no doubt been moderated as consumers have
substituted frozen for fresh vegetables.







Florida Agricultural Experiment Stations


creased almost at a geometric rate. However, with the sharp
nationwide decline in cattle prices in 1951-52, the rate of increase
in value in terms of current dollars slowed somewhat. The real
increase in value of livestock sold between 1940 and 1954 amounts
to $3,400,000.
The demand for beef cattle produced in Palm Beach County
is infinitely elastic, since this area is such a small part of the
national market. The increases in total revenue from this source
prior to 1951-52 can be attributed to larger numbers of animals
sold and higher prices.1" The increases in total revenue since
1951-52 can be attributed to a significant increase in the number
and quality of animals sold.17
Dairy Products.-From 1940 to 1954 the amount of whole
milk sold by Palm Beach County dairies increased 277 percent.
The value of this product in terms of current dollars increased
from $479,923 to $3,068,453, while the real increase in value
amounted to over $1,840,000. Considering population and income
increases since 1940, the demand for fluid milk has increased
substantially.',
Horticultural Specialties.-In terms of current dollars, the
value of horticultural specialties has increased 735 percent, or
$1,950,000 since 1940.
The nature of the demand for horticultural specialties is not
as easily specified as that of other commodities. Approximately
one-third to one-half of the income from this source in Palm
Beach County is derived from nursery products. These nursery
products move largely into local channels and the demand for
them may or may not be elastic. On the other hand, most of
the remainder of the income from horticultural specialties is de-
rived from the sale of flowers and flowering plants, the bulk of
which move into the national market. The demand facing local

'~ Price trends are found in: W. K. McPherson's "How Well Do Auctions
Affect the Price of Florida Cattle," Journal of Farm Economics, Vol.
XXXVIII, No. 1, (February, 1956).
7 Changes in quality are reflected in data presented by Florida State
Marketing Bureau in For Sale, Want and Exchange Bulletin, Vol. 12, No.
3, Jacksonville (June 1, 1955), p. 4.
Real per capital income in Florida increased 43 percent from 1940 to
1953. Computed from data in Bureau of Business and Economic Research,
Income Payments to Individuals in Florida Counties: 1952, State Economic
Studies, No. 10, University of Florida (June 1953). Fox estimates that a
one percent change in income effects an 0.55 percent change in price. Karl
A. Fox, The Analysis of Demand for Farm Products, (Washington: BAE,
USDA, 1953). Legal health standards are such that the majority of any
increase in the amount of milk sold in Palm Beach County will be produced
locally.






Agricultural Land Prices in Palm Beach County


producers in this market may be inelastic due to: (1) a substan-
tial and rather constant marketing margin and (2) climatic fac-
tors that give producers in southern Florida almost a natural
monopoly on the production of these products during winter.
The demand for specialized crops such as shrubbery, flowers,
etc., is closely related to urban growth and to disposable income.
As the urban areas experience income and population growth,
local demand increases for various ornamentals. On a nation-
wide basis, as income and population increase, the demand for
cut-flowers in the winter season can also be expected to increase.
Sugar Cane for Sugar.-Throughout the nation the demand
for sugar has been rising since 1942, largely because of increases
in the population and per capital consumption. 19 Since the
amount of sugar produced in the county is a relatively small
factor in the national and international market, the demand for
locally produced sugar is infinitely elastic. The increases in de-
mand and local production resulted in a substantial increase in
total revenue (Table 9).

THE QUANTITIES OF LAND AVAILABLE
The amount of land used in agricultural production may vary
appreciably with changes in the agricultural demand for land.
If there are large quantities of unimproved lands available, the
quantity of land utilized in agriculture can be quite responsive
to changes in the demand for agricultural products. Under these
circumstances the effect of an increase in demand on land prices
is minimized. On the other hand, if the quantity of land avail-
able to farmers cannot be readily increased (due to the non-
availability of land, the high cost of bringing new lands into
production or the high value productivity of land in alternative
uses) most of the effect of increases in demand will be reflected
in land prices.
The total land area of Palm Beach County is approximately
1,200,000 acres. The proportion of this area consisting of land
in farms has risen appreciably during 1940-1955 (Table 3).
Most of this increase in farm land has come from unimproved
lands which were largely held mostly by public agencies.
Public Ownership of Land.-During the 1930's much of the
land previously in private ownership reverted to public agencies.
By 1940 only 25 percent of the land area of Palm Beach County
"' See U. S. Department of Agriculture, Agricultural Statistics, 1954
(Washington: U. S. Government Printing Office, 1954), p. 561.







Florida Agricultural Experiment Stations


was on the active tax rolls. With the increase in economic ac-
tivity stimulated by World War II, land available to farmers had
dwindled from approximately 900,000 acres to slightly more
than 340,000 acres in 1943. Of this amount, 200,000 acres were
held by the Trustees of the Internal Improvement Fund, 38,000
acres by the state under the provisions of the Murphy Act and
102,000 acres 20 by the county and the several drainage districts.
By 1946 only 246,000 acres could be classified as public lands
available for sale to private owners.21 Between 1946 and 1950
the land available for private ownership declined further to ap-
proximately 226,000 acres. The decrease in land available to
farmers between 1940 and 1950 was due to the sale of public land.
Since 1950, however, the major state agency responsible for
state lands (Trustees of the Internal Improvement Fund) has
withdrawn its remaining lands from the market. In addition,
the Central and Southern Florida Flood Control District pur-
chased approximately 192,000 acres for right-of-ways and sites
for conservation pools.22 This represents a sharp change in
public policy-from the sale of land to withholding it for other
uses. (See Table 10 for proportion of total sales made by public
agencies.)
Subsidence of the Organic Soils.-The organic soils of the
Florida Everglades offer conservation and management problems
different from mineral soils.23
Proper management practices will maintain them at or near
native fertility, but subsidence cannot be prevented entirely
except by reflooding and withdrawal from agricultural use.
Definition and Causes of Subsidence.-Subsidence is the loss
of soil mass. The organic soils of the Everglades were formed

20 Source: Land Division, Central and Southern Florida Flood Control
District, West Palm Beach, Florida.
1 Estimated from data presented by D. E. Alleger and M. M. Tharp,
Rural Land Ownership in Florida, University of Florida, Agr. Exp. Sta.,
Bulletin 460 (June, 1949).
2 At present, a total of 339,000 acres have been withdrawn either per-
manently or temporarily from the land market. (The breakdown is as fol-
lows: Trustees of the Internal Improvement Fund-105,000 acres; Central
and Southern Florida Flood Control District-192,000 acres; Federal Gov-
ernment-21,000 acres; municipalities-20,000 acres; and miscellaneous
acreages). This 339,000 acres represents over one-fourth of the total land
area of the county. Most of the lands purchased by the Central and Southern
Florida Flood Control District were unsuitable for agriculture and were
classified in land capability Class VIII. (Source: Land Division, Central
and Southern Florida Flood Control District, West Palm Beach, Florida).
2' The problem is not entirely unique when compared to other organic
soils, since all of these soils are subject to subsidence.







Agricultural Land Prices in Palm Beach County


: \ ..... ... pLM Uto j Wooir -


Fig. 10.-Depths of the organic soils in Palm Beach County, Florida,
prior to drainage, 1912. Source: Adapted from J. C. Stephens and Lamar
Johnson, Subsidence of the Peat Soils of the Everglades Region, USDA,
Soil Conservation Service, in cooperation with the Central and Southern
Florida Flood Control District, the Everglades Drainage District, and the
University of Florida Agricultural Experiment Stations.







Florida Agricultural Experiment Stations


under very wet conditions through a slow build-up of plant resi-
dues.24 Once these soils are exposed, by either drainage or
drought, they lose mass and volume. This loss is due to (1) a
reduction in the water content,25 (2) oxidation which is intensi-
fied by warm climates,26 (3) fire and (4) mechanical compaction.
The Subsidence Pattern in the Everglades.2--Prior to drain-
age, most of the organic soils in Palm Beach County were at
least five feet in depth (Figure 10). With the development of
drainage projects and facilities and the intensive use of these
soils, subsidence took place at such a rate that by 1950 approxi-
mately 40 percent of the soil volume had been lost.
Scientists predict that by the year 2000 most of the organic
lands in Palm Beach County will have been abandoned for agri-
cultural purposes. At that time the depths of the organic soils
in the major portion of the area are expected to be too shallow
to permit mole drainage and relatively inexpensive water con-
trol (Figure 11).
Impact of Subsidence on Land Prices.-The organic lands of
this area are a stock resource which is diminishing.27 Under a
constant price level, the value of these lands will be diminished
by (1) increases in the cost of water control and (2) the actual
loss of the resource itself. Under present price and cost levels
it does not appear economically feasible to utilize these lands in
the production of crops after they have subsided to the point
where the underlying material is less than three feet from the
surface. This, of course, does not mean that these soils will
not be used at depths of three feet and less if prices of the agri-
cultural products of the area rise significantly in the future.
Tile drainage is an alternative and may well be used should prices
rise. However, it has been estimated that soils less than one
foot deep cannot be utilized in agriculture. It is thus apparent

2" B. S. Clayton et al., Water Control in the Peat and Muck Soils of the
Florida Everglades, University of Florida Agricultural Experiment Sta-
tions Bulletin 378 (1942), p. 15.
2' Lewis A. Jones et al., Soils, Geology, and Water Control in the Ever-
glades Region, University of Florida Agricultural Experiment Stations
(Cooperating with the USDA, SCS), Bulletin 442 (1948), p. 79.
John C. Stephens and Lamar Johnson, Subsidence of Peat Soils in the
Everglades Region of Florida, USDA, SCS, in cooperation with the Central
and Southern Florida Flood Control District, the Everglades Drainage Dis-
trict and the University of Florida Agricultural Experiment Stations (1951),
p. 5.
"7 S. V. Ciriacy-Wantrup, Resource Conservation (Berkeley: University
of California Press, 1952), p. 35.








Agricultural Land Prices in Palm Beach County


PALM BEACH COUNi' -


L A K E


O K E E C H OB EE


- ALM BEACH COUhTI


Fig. 11.-Projected depths of the organic soils in Palm Beach County,
Florida, in 2,000 A. D. Source: Adapted from J. C. Stephens and Lamar
Johnson, Subsidence of Peat Soils in the Everglades Region, USDA, SCS,
in cooperation with the C&SFFCD, the EDD, and the Univ. of Fla. Agr.
Experiment Stations.


--.- -- ---------- N.







Florida Agricultural Experiment Stations


that part of the return to these lands is a return for exploiting
their organic reserves as well as their use.
The value at any time during the life of a resource subject to
a constant loss rate can be determined as follows:

P(T t) ( 1
Vt = + S (T t) I
T (1 + i)

Where: P = the purchase price of the land (based on expected income).
T = the economic life of the soil in years.
t = the number of years since the purchase.
S = any remaining value at the end of time T (usually called
salvage value).
i = the interest rate.

The purchase price P above is, of course, based on expectations.
At any time the expectations about the value of the earning
power of land can change, and this change can exceed the value
of the depreciation based on the original purchase price. The
land can thus sell at a price above or below that indicated by
its original price minus depreciation. The value of land at any
time will be:

[P (T-t) 1 \ 1A
Vt = +S (T-t) AI 1
t= ( t) + ( S(T-t)) i (T t)I
V-(1+ i) )J(1 +[ i)

Where: P, T, t, S and i are defined as in I.
AI = the absolute change in expected income.

It is evident from II that as time t approaches T the effect
of an increase in value productivity will have a minimum effect
on the price of land.

RISKS AND UNCERTAINTIES
Assumption of risk and uncertainty constitutes costs to a
firm. The predictive (probability) nature of risk is such that
the increase in costs over time can be anticipated.28' 2 Uncer-
tainties, on the other hand, have no predictive basis and their
quantitative effects are less well defined. Since the prices of
factors other than land are largely determined exogeneously and
since risk and uncertainty may be associated with particular lo-

"8Frank H. Knight, Risk, Uncertainty and Profit (Boston: Houghton
Mifflin, 1921), p. 44.
E. 0. Heady, Economics of Agricultural Production and Resource Use
(New York: Prentice-Hall, 1952), p. 442.






Agricultural Land Prices in Palm Beach County


cations, most of this increase in cost is capitalized into land
values.30
Natural Hazards.-Palm Beach County farmers encounter
the following natural hazards which influence land prices.
Floods and Intense Rainfall.-In the past floods have gen-
erally occurred in those years in which heavy summer rains
were followed by hurricanes in the early fall; particularly in
1924, 1926, 1930, 1934, 1941, 1947, and 1949." These floods
were highly destructive; the average annual flood damage in
the Everglades areas has been approximately $4,000,000.32 The
1947 flood caused approximately $8,000,000 damage in this area
and, together with the drought of 1945, prompted action leading
to the creation of the Central and Southern Florida Flood Con-
trol District.
Even when flood conditions do not exist, intense rainfall can
cause agricultural losses. Since the land is flat, pumps are often
unable to remove the water rapidly enough to prevent damage to
the root system of plants. Heavy rains in the winter seasons
are usually preceded or followed by high winds. Wind-borne
sand frequently burns the plants and destroys blossoms and
young fruit.
From 1946-47 through 1954-55 heavy rains caused some dam-
age to vegetable crops and/or delayed planting operations every
year in the East Coast areas (Table 11). In six of these nine
seasons serious damage to some vegetable crops resulted. In
the Everglades area heavy rains caused damage eight of the
nine seasons and serious damage in six of them.
Temperature.-Winter temperatures affect yields and quality
of vegetable crops in two ways. Frosts and freezing tempera-
ture either kill or damage the plants and abnormally high tem-
perature and moisture conditions are conducive to insect and
disease damage. Of these, cold damage is by far the most im-
portant.
In Area I frosts and freezing temperatures caused the loss
of at least 1,000 acres of vegetable crops six out of the nine crop
seasons 1946-47 through 1954-55. In three of these seasons some

SSince interest rates may also reflect the risks involved, the price of
capital may be higher.
1 U. S. Congress, Comprehensive Report on Central and Southern Florida
for Flood Control and Other Purposes, 80th Congress, 2nd Sess. House Doc.
643, (Washington: U. S. Government Printing Office, 1950), p. 25. The 1949
flood occurred after the printing of this report.
SIbid., p. 26.







Florida Agricultural Experiment Stations


crops were almost completely destroyed (Table 11). However,
in some instances, losses were partially offset by replanting,
particularly when frosts occurred early in the season.
In Area III frost caused the loss of at least 1,000 acres of
vegetables two out of the nine seasons, but no crops were com-
pletely destroyed during this period. The distinct differences
between the frequencies of crop loss due to frost and freezing
temperatures in Areas I and III is illustrated in Figure 12.

Per
Cent of
Year.
100-
90
,30 '* .. oOCii; hAVEN












20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30
40. l / ...-'..


2D ELRAYY


20 30 10 20 J0 10 20 30 1O 20 30 10 20 30 io 20 30 10 20 30
Sept. Oct. Nov. Dec. Jan. Feb. March
Planting Dates

Fig. 12.-Frequency of killing frosts on 60-day crops at specified loca-
tions for consecutive planting dates. Source: Federal-State Frost Warn-
ing Service, Lakeland, Fla.

Drought.-Although the average annual rainfall is about 60
inches, rainfall during months when crops are being grown is
not sufficient to produce crops of optimum quality or yield (Fig-
ure 13). This deficiency is made up by irrigation. When there
has been a normal carryover of water from summer rains, these
dry months cause no hardship and in some instances actually
improve the quality of the crop. However, if summer rainfall
is below average, water shortages for irrigation may occur dur-
ing the winter. This condition is particularly serious in the
portions of Area I that are not near Lake Okeechobee. When
the levels of canals drop, the quality of irrigation water deteri-
orates and repeated applications may injure growing plants due
to the high calcium content of the water.






Average Inches
of Rainfall
Per Montn
CD
10.0 -

9.0-
N

8.0 K

7.0 Belle Glade -

6.0o 7 Fort Lauder-
o_ dale
5-0- I
5.0-



53-0- ^ ^
4.0. -



1.0 l Mot
0 i C , ) i n

Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
Month
Fig. 13.-Average rainfall per month at Belle Glade and Fort Lauderdale. (Belle Glade: Average 1924-46; Fort
Lauderdale, average 1918-46, representative of east coast portion of Palm Beach County.) Source: Lewis A. Jones et al.,
Soils, Geology and Water Control in the Everglades Region. U. of Fla. Agr. Expt. Sta. Bul. 442. 1948.







Florida Agricultural Experiment Stations


Empirical Determination of the Impact of Natural Risks on
Land Values.-The effect of differences in natural hazards on
land values can be illustrated by comparing the value of lands
on the Lake Okeechobee islands with the value of nearly identical
lands on the mainland. These islands (Ritta, Kraemer and Torry)
are located near the southeastern shore of Lake Okeechobee
(Figure 14). The mild winter temperature on the islands is
attributed to the fact that they are surrounded by water.


LAKE

OKEECHOBEE Canal
Point


Pahokee ,





Kreamer
Island
Ritta
Island Torry 441
SIsland


Belle Glade


Fig. 14.-The islands of southeastern Lake Okeechobee.






Agricultural Land Prices in Palm Beach County


Farmers in this general area assume risks and face uncertain-
ties that originate in three distinctly different phenomena: (1)
fluctuations in the price of winter vegetables, (2) fluctuations in
the water table heights due to changes in the level of Lake
Okeechobee, canals and streams and (3) temperatures falling
below the frost and freezing points.
Of these three components of risk and uncertainty, wide
fluctuations in the price of winter vegetables are common to
farmers producing these crops both on the islands and on the
mainland. Consequently, its impact on the value of land in
these two areas should be about the same.
Risk and uncertainty from fluctuations in the height of the
water table on the islands are distinctly different from those on
the mainland. On the mainland the height of the water table is
readily controlled (except during periods of excessive rainfall)
by pumping into and out of canals. The levels of the canals are
in turn controlled by regulating the rate of flow of water out
of Lake Okeechobee and into the conservation areas or the ocean.
In contrast, the water table on the islands is a product of the level
of Lake Okeechobee and the rate at which water is pumped from
behind island dikes. Since the lake level has not been controlled
effectively in the past, the risk and uncertainty of high water
tables causing reduced crop yields and reduced net returns is
more on the islands. Actually, the frequency of high lake eleva-
tions in August, September and October is so great that it has
not been considered economically feasible to produce a fall crop
of vegetables on the islands.
Frost and Freezing Temperatures.-Inasmuch as crops grown
on the islands are much less likely to be frozen than crops grown
on comparable land on the mainland, island land is more valu-
able. This climatic advantage of the islands is so clear cut that
the difference in the value of land of the same soil type (Okee-
chobee muck) on the islands and mainland can be estimated
quantitatively.
From September through April it is theoretically possible to
grow three crops on the same land in both areas. However, at
most mainland locations in Area I the high incidence of freezing
temperatures reduces the possibilities to two crops-one in the
fall and one in the spring. On the other hand, it is not feasible
to produce a fall crop on the islands because of high lake eleva-
tions during the last part of the rainy season-August, Septem-







Florida Agricultural Experiment Stations


ber and October. Consequently, the principal difference between
the value of island and mainland land with similar soil character-
istics is the difference between the value of a fall and a winter
crop of vegetables.
More specifically, over a 10-year period the difference in the
gross income from producing a winter and spring crop of snap
beans averaged $13 more per acre than the gross income from
producing a fall and a spring crop (Table 12)." Capitalized at
6 percent for the economic life of the soil for agricultural pur-
poses, land capable of producing a winter and spring crop of
snap beans would be worth approximately $197 per acre more
than land on which a fall and a spring crop can be grown.34 This
estimate of the difference between the values of comparable
land on the islands and mainland is remarkably close to esti-
mates of value based on differences in commercial rents. Com-
mercial rents for the past three to five or more years averaged
$26.93 per acre on the mainland and $39.10 on the islands-a
difference of $12.17.35
Floods and High Water Levels.-These island lands can be
used further to illustrate the effects on land prices of risk arising
from excessive rainfall and flood conditions, since they are vul-
nerable to high lake levels in the fall season.
The profitability of producing winter vegetables on the islands
depends in part on the ability of the farmers to maintain the
water table at levels that will facilitate most efficient production.
The ability of farmers to control the water table depends, in
turn, on the elevations of the lake during the period when the
soil is being used, i.e., from October 1 through May of the fol-
lowing year.
When lake elevations approach 16.4 m.s.l., maintaining proper
soil conditions without an extensive and expensive system of
dikes, ditches and pumping facilities becomes difficult on Ritta,
Kraemer and Torry islands.

This is true if it can be assumed the costs of production per acre are
essentially the same in both areas. There is evidence that per acre costs
are somewhat higher in the fall because of fall rains and the resulting
replanting costs. However, the extent to which the costs differ cannot be
readily determined.
The present worth of $13 a year for 42 years (the estimated remain-
ing economic life of the soil). It was assumed that the salvage value of
land in both locations was the same.
See Appraisal Report, submitted to the Central and Southern Florida
Flood Control District by the Okeechobee Island Land Owners, July, 1955 (in
the files of the CSFFCD).







Agricultural Land Prices in Palm Beach County


Farmers start to prepare the land for planting when the lake
level begins to fall. If this happens prior to October 1, farmers
are reasonably sure of being able to market their products when
prices reach seasonal peaks in January and February. Rising
lake elevations or elevations higher than 15 feet m.s.l. after Oc-
tober 1 reduce land productivity in proportion to the length of
time that planting is delayed. For example, for each week
planting is delayed because of rising or high lake elevations, the
marketing of a crop is delayed a week. In other words, high or
rising lake levels prior to October 1 are expected, but if the lake
is allowed to rise or is maintained at high levels after this date,
the productivity of the land is diminished.3"
To estimate the loss in net returns attributable to delaying
the planting date for winter vegetables, it must be assumed that
farmers should be able to begin planting these crops at some
specific date. Assuming November 1 is the latest planting date
that will permit harvest during the period of peak prices, the
losses in net revenue due to a four-week delay in planting is the
difference between the revenue received from a crop of winter
vegetables harvested in January and a crop harvested in Febru-
ary. Similarly the revenue from the spring crop is affected,
since the harvest normally occurring in March would be delayed
until April."7
The relationship between the loss of revenue from a delay in
planting can be determined quantitatively as follows:

n(OP + O.,P)
Rv =
I
Where: Rv = reduction in value, dollars per acre
n = delay in planting, number of weeks
:" The policy followed by the Central and Southern Florida Flood Control
District in the regulation of the level of Lake Okeechobee directly affects
the value productivity of these lands. Since the original patents to these
islands were granted, it has been obvious that interests of mainland growers
and island growers have been in direct conflict.
The State Cabinet has approved a compromise plan for purchasing the
land that comprises these islands. The Central and Southern Florida Flood
Control District offered $1,037,000 for the 2,834 acres on the islands. The
price offered for the several tracts varied with their quality and improve-
ment. On acceptance of this offer existing land owners have the right to
lease back their farms at $1.00 per acre annually for three years and
then renew the lease for a five-year period at 5 percent of the purchase
price. All risk of flood is assumed by the lessee as well as payment of
taxes and maintenance of existing facilities. Owners of approximately
one-half of the land area have accepted these terms.
The average decline per week in snap bean prices amounts to $0.04
per bushel (Figure 15).







Florida Agricultural Experiment Stations


Oi = average winter yield, per acre
P = average reduction in price received, cents per week
02 = average spring yield, per acre
I = rate of interest used in the capitalization process, percent

If planting were delayed one week every year, the value
would be reduced $115 per acre.38


Fig. 15.-Weekly price movements of snap beans in the Everglades
region of Florida (five-week moving average of 10-year weekly average
f. o. b. shipping point prices). Source: Computed from data presented in
Southern Florida Vegetable Marketing Season, Federal-State Market News
Service, Belle Glade, Florida.

Market Instabilities.-Prices of fresh winter vegetables fluc-
tuate widely from day to day and week to week, yet follow a de-
scribable seasonal pattern.
At the same time the prices of the major fresh vegetable
crops grown in Palm Beach County have a slight tendency to

8 The revenue loss per acre on snap beans capitalized at 6 percent for
the economic life of the soil. The average winter yield of snap beans is
90 bushels per acre, and the average spring yield is 100 bushels per acre
(Table 12). This estimate is based on a 60-65 day growing season.







Agricultural Land Prices in Palm Beach County


move together (Table 13). The extent of this limited co-vari-
ance can be attributed to three major factors: (1) a significant
proportion of the total United States' output of fresh winter
vegetables is produced in the county, (2) crops within the county
are likely to be affected in the same way by weather conditions
and (3) prices of commodities produced in the county are affected
in the same direction by changes in output in competing areas.
Farm Adjustments to Risks and Uncertainty.-If farmers
are able, through diversification or other measures, to increase
the net returns to farm enterprises, then these practices will con-
tribute directly to increased land prices. On the other hand,
if diversification stabilizes income at a lower level, the value
productivity of land is diminished.
Diversification.-Three major types of diversification are at-
tempted by the farmers of this county.
Combinations of Truck Crops.-To the extent that vegetable
prices move together, diversification gains will be negligible.
However, price correlations do not indicate extensive co-vari-
ance."" Correlation of the yields of the major crops also indi-
cates little co-variance (Table 13). Farmers produce two or
more vegetable crops largely because (1) capital requirements
of some crops are extremely high, (2) some vegetable enter-
prises are large enough to affect the national price by changing
their output 4, 41 and (3) of the complementation or supplemen-
tation between vegetable enterprises.
Incorporation of Beef Cattle into the Farm Enterprise.-
The production of beef cattle in conjunction with the vegetable
enterprise is more likely to stabilize income, since fluctuations
in vegetable prices and yields are not necessarily influenced by
the same factors that affect beef prices.42 Since short-term
changes in the price of livestock and vegetables are not highly
correlated, this diversification is a hedge against temporary price
movements. On the other hand, a significant change in national
income affects prices of both in the same direction.

A correlation coefficient of -1 would indicate that maximum stability
of income would be achieved by diversification.
"o Since this county produces a significant proportion of the total United
States' supply of certain vegetable crops, the value productivity of land is
probably increased by the production of several crops rather than area
specialization in a single crop.
In the crop year 1954-55, only one vegetable producer in the county
on which the University of Florida Agricultural Experiment Station has
cost records specialized in the production of a single crop.
2 These enterprises may be complementary in a technical sense.






Florida Agricultural Experiment Stations


Temporal Diversification.-In those areas where weather con-
ditions permit and particularly in Area III, vegetable farmers
have attempted to meet price variations with a continuous plant-
ing schedule.4, 44 Whether or not this adjustment enhances
land prices depends upon how continuous planting and harvest-
ing affects the cost of production and the variability of vegetable
prices and yields. If production costs are not affected, the effect
of temporal diversification is entirely dependent upon yield and
price variability.4" On the bases of the average monthly prices
of snap beans by years and the average yields of snap beans by
seasons, the total income of an individual farmer would have
been reduced approximately $25 per acre per year by following
a continuous production program for a period of three months,
rather than concentrating on production for January (Table 14).
A continuous planting and harvesting program does con-
tribute somewhat to income stability in reducing fluctuations
in total revenue. The coefficient of variation in total revenue is
the largest for a production program that concentrates on pro-
duction for the January market. However, if stability of income
were the goal of a farmer, snap beans produced for market in
February would minimize income variation during the winter
season. This stability would be accompanied by a loss of income.
Other Farm Adjustments to Natural Hazards.-The federal
government in cooperation with the Florida Agricultural Experi-
ment Stations operates a frost-warning service to give advance
notice to growers of impending cold weather. Vegetable growers
endeavor to minimize losses from frost damage by (1) the cessa-
tion of all cultivation, (2) increasing the height of the water
table (in some cases the lands are flooded), (3) forced harvesting
and (4) delaying planting operations.
The practice of stopping cultivation upon receipt of a warn-
ing of impending cold weather protects crops because the surface
of cultivated fields tends to lose heat more rapidly than that of
uncultivated fields and hence will be from two to four degrees

"This is also an effort to adjust to variations in weather conditions.
However, empirical data are not extensive enough to completely evaluate
this aspect of the risk problem.
A continuous planting schedule is one in which the planting operations
are so scheduled that harvesting takes place over a period of time.
There is some evidence that a continuous planting and harvesting
schedule is advantageous in that efficiency in the use of labor and equip-
ment is increased.







Agricultural Land Prices in Palm Beach County


colder.4" Flooding fields and raising the water table have sim-
ilar effects on air temperatures immediately above the ground.47
The economic impact of forced harvesting of the mature por-
tions of crops on the value productivity of land depends upon
several factors. To the extent that temperature forecasts are
accurate, widespread forced harvesting tends to increase the
value productivity of land.48 On the other hand, forced harvest-
ing can cause a market glut and, consequently, severely depress
the price of vegetables. When cold damage is not as severe as
predicted, forced harvesting and the attendant market glut
can reduce the industry's total revenue. Delayed planting saves
the cost of replanting in the event of extensive cold damage.
The manner in which farmers respond to general weather
forecasts may also contribute to the value of land. For example,
a forecast of heavy rain or storms will cause farmers to start
pumping water from the vegetable lands and improved pastures
to facilitate the removal of water. This measure may prevent
the loss of vegetable crops and damage to improved pastures.
Palm Beach County farmers make extensive use of all weather
forecasts. The following example illustrates how they adjust
production practices on the basis of weather predictions.
"A prolonged warm spell with high humidity during the last part of
February and first week in March caused an almost uncontrollable (fungus)
infestation of the celery. Growers were beginning to rush picking at a
rate that would have broken the celery market. Upon receipt of the fore-
cast of March 7, calling for cooler, drier air to overspread the Glades
Tuesday thru Thursday-the pickers of celery immediately ceased as they
knew the cool, drier air would clear up the infestation. Thus, the celery
market glut was averted.""
CREDIT
Capital rationing can limit the extent of land price increas-
es."0 Conversely, increases in the supply of credit can enhance
land prices. Increasing the supply of loanable funds may affect

W. O. Johnson, "The Florida Agricultural Meteorological Service,"
paper read before the American Meteorological Society, Kansas City, June
10, 1955 p. 4.
"Ibid., p. 5.
4 This assumes that the demand for fresh vegetables is elastic at very
high prices.
See footnote 46.
Internal capital rationing stems primarily from the enterpriser's
subjective discount of future returns. External capital rationing results
from the lending firms discount of the uncertainties facing the enterpriser
and from the lender's evaluation of the honesty of the borrower. Typically,
loans are made on basis of security rather than the marginal productivity
of capital. See, E. O. Heady, Economics of Agricultural Production and
Resource Use, (New York: Prentice-Hall, 1953), pp. 550-551.







Florida Agricultural Experiment Stations


land prices in two ways: (1) Larger amounts of long-term credit
permit a more extensive use of machinery. This, in turn, may
tend to increase the value productivity of the land and thus its
price. (2) An increase in available funds can stimulate the mar-
ket (and thus, land prices) in that transactions can be consu-
mated with lower down payments.
Intermediate- and Long-Term Mortgages Recorded.-Prior to
1946 capital rationing existed in the intermediate- and long-term
agricultural credit market in Palm Beach County. Before this
time private individuals provided the major source of credit and
the majority of the mortgage recordings observed were purchase
money mortgages. The existence of capital rationing was fur-
ther substantiated by interviews with farmers, bankers and real
estate agents. These groups were almost unanimous in agree-
ing that long-term credit was difficult to acquire during these
years. Until January 1947, only about $128,000 credit had been
extended by lending agencies on all sample tracts (Table 15).51
Since then total loans by the various agencies amounted to ap-
proximately $3,000,000. This form of credit was most exten-
sively used in 1954 when mortgages to these lenders were valued
at approximately $680,000, or 68 percent of all of this form of
credit extended that year.
Generally speaking the credit market has eased, in terms of
both the amount of funds that can be borrowed and the values
lenders place on land. However, the credit situation in the three
areas varied significantly during the period.
Area I.-Lending agencies began to offer intermediate- and
long-term credit in this area as early as 1943. However, the
amount of credit extended did not reach significant proportions
on the sample tracts until 1948. Prior to 1948 private individuals
were the principal source of this form of credit and only $160,125
was loaned by commercial lending agencies. Since January 1948
these agencies have loaned $1,404,492 while private individuals
have extended approximately $850,000 credit on the sample
tracts.
Area II.-Only one mortgage amounting to $16,000 was re-
corded on the sample tracts in the 16 years under study that
involved a lending agency. On the other hand, a large amount
of private credit was extended, particularly in recent years.
Prior to 1948 all intermediate- and long-term mortgages recorded
The term "lending agency" refers to banks, insurance companies,
governmental agencies and savings and loan associations.







Agricultural Land Prices in Palm Beach County


on the sample tracts amounted to approximately $76,000. Since
January 1, 1948, mortgage loans valued at $1,200,000 have been
made and $875,000 of this total was loaned during the first six
months of 1955.
Area III.-Lending agencies did not become active in this
part of the county until 1947. After January 1947 lending
agencies made mortgage loans totaling $1,555,741 and private
agencies loaned $921,000 on this land.
Repayment Terms.-Repayment schedules of loans also have
been liberalized. Prior to 1947 the average loan called for re-
payment in 21/ to 5 years. With the active participation of
lending agencies (particularly the insurance companies) in the
loan market, the repayment period has lengthened to an aver-
age of between 10 and 12 years.'2 This undoubtedly has en-
hanced land prices by reducing both the initial and annual out-
lay for capital.
Interest Rates.-The price of land tends to vary inversely
with the interest rate, i.e., an increase in the interest rate tends
to decrease the price of land and vice versa. There appears to
have been a slight decline in interest rates on Palm Beach
County long-term agricultural loans during the 16-year period
1940-1955. The weighted average interest rate on sample tract
mortgages declined from about 5.9 percent in 1940 to around 5
percent in 1955.53 An actual decline of this extent could have
increased land prices approximately 17 percent, even if net
returns on land had remained constant.54','

The terms of the loans obtained from insurance companies usually call
for repayment on an annual or semi-annual schedule in about 15 years.
:' Based on a least-squares trend line fitted to annual weighted average
interest rates. The least-squares line is expressed: Yc = 5.93 0.06X.
Unfortunately, there were relatively few observations of intermediate- and
long-term agricultural loans prior to 1947.
Blodgett suggests that the interest used in the capitalization process
should be that obtainable in equally safe investments. R. H. Blodgett,
Principles of Economics, 3rd ed., (New York: Rinehart, 1951), p. 344. It
is assumed here that the interest rate on these mortgages reflects what
could be earned in comparable risk alternatives.
"If the price level is rising concurrently with a reduction in interest
rates, there is an inter-action, and the total effect on land prices is greater
than under a stable price level. The percent change in value is defined:
R+AR
IS
AV -- (100) 100
R
I,







Florida Agricultural Experiment Stations


Short-Term Credit.-The availability of short-term credit en-
ables farmers to substitute some capital goods and labor for
land. Furthermore, when long-term credit is not available, short-
term loans become a partial substitute for this form of credit.
There appears to have been a relative shortage of short-term
funds prior to 1947 in the county as a whole. Until this time,
mortgages totaling $1,135,700 were recorded.56 However, since
January 1947, recordings of this type of mortgage amounted to
nearly $5,000,000.5"
Prior to 1947, short-term credit was used extensively in Area
III, accounting for over 50 percent of the total mortgages re-
corded (Table 16). However, of the total mortgages recorded
on the tracts since January 1947, approximately 89 percent were
recorded in Area I. The total of short-term mortgages recorded
in Area II amounted to only $44,000 in the 16-year period.
Short-term interest rates have remained practically stable
throughout the entire period, resulting in relatively constant
short-term capital costs.
The major lenders of short-term credit are the production
credit associations, banks, the Farmers Home Administration
and private individuals. Of these, the production credit associ-
ations loaned 77 percent of the total funds, banks 12 percent,
the Farmers Home Administration 6 percent, and private indi-
viduals and others 5 percent.58

TECHNOLOGY
Technological innovations can be classified into two broad
categories-factor-saving and factor-using and more specifically
-land-saving and land-using." Land-saving innovations are

Where: R = the original rent
A R = the change in rent due to the change in the
price level
I = the original interest rate
12 = the new interest rate
Of course, one factor acting as a deterrent to the extensive use of
short-term credit prior to 1947 was the war-time shortage of labor and
materials.
5 Since 1947 the mortgage recordings do not reflect necessarily the total
credit used. Many of the contracts with the Production Credit Associations
call for a specified amount per year for six years.
"This analysis does not account for the 30-, 90- and 120-day credit
extended by the fertilizer companies, oil companies or feed and seed com-
panies. According to conversations with various individuals in Palm Beach
County, this type of credit is widely used.
8' See, for example, Joan Robinson, "The Classification of Inventions,"
Review of Economic Studies, Vol. I (1937-1938), pp. 139-142.







Agricultural Land Prices in Palm Beach County


those that increase the physical productivity of land, whereas
land-using innovations are those that require more land to per-
mit their economic use. These traditional categories do not pro-
vide a complete explanation of the impact of technology on land
prices.
The two major factors which determine the effect of tech-
nology on land prices are: (a) the elasticity of demand for the
products of land and (b) the impact of the innovation itself, i.e.,
its effect on both the total costs of the industry and on output."0
To define the effects of technological change on land prices, two
conditions of demand elasticity can be specified and the nature
of the technological innovation varied within these major condi-
tions of demand (assuming no shifts in demand)."61 6
Elastic Demand for Agricultural Products.-Impact of inno-
vation on output and on total cost of factors other than land:
1. Total output increased and total cost of other factors
constant-land prices will increase (Figure 16a).
2. Total output increased and total cost of other factors de-
creased-land prices will increase (Figure 16b).
3. Total output increased and total cost of other factors in-
creased-land prices will be enhanced, if the increase in total rev-
enue is more than the increase in total costs. If, however, the
increase in total cost is more than the increase in total revenue,
land prices will decrease (Figures 16c and 16d).
Inelastic Demand for Agricultural Products.-Impact of in-
novation on output and on total cost of factors other than land:
1. Total output increased and total cost of other factors de-
creased-if the reduction in cost is larger than the reduction in
total revenue, land prices will increase (Figures 16e and 16f).
If the reduction in total revenue is larger than the reduction in
cost, land prices will decrease.
2. Total output increased and total cost of other factors con-
stant-land prices will decline (Figure 16g).
3. Total output increased and total cost of other factors in-
creased-land prices will decline (Figure 16h).

o Heady lists a third factor, i.e., the nature of the short-run supply
schedules of the factors of production. See, E. O. Heady, The Economics
of Agricultural Production and Resource Use, (New York: Prentice-Hall,
1952), p. 819. This, however, is applicable to a short-run situation and
the discussion above is directed to long-run tendencies.
O1 The case of unit elasticity is not treated here since the impact of the
technological innovation is readily apparent from the discussion above.
"2 This analysis largely follows from a discussion by E. O. Heady. Ibid.,
pp. 820-21.







b c


SI / / Land I
SLand Land
SI I II
Cost I Cost Cost Cost
I of I of of of
Other I Other Other Other
Factors i Factors I Factors Factors

Industry Output Industry Outnut Industry Output Industry Output

e f g h
TC1 TC TC
TC2 TC2 1 1
TC2 TC,
I Land TR I Land I TR
/ Land TR and
La n I Land TI
I o
Cost Cost Cost Cost
of of of of
I of I I of Io I thr of
Other I I Other Other Other
IFactors I Factor Factors Factors
I I I I I I
Industry Output Industry Output Industry nltput Industry Output
Fig. 16.-Impact of technological change on land prices under specified conditions.







Agricultural Land Prices in Palm Beach County


Changes in Product Demand.-When the demand for an agri-
cultural product is shifting, the impact of technological change
on land prices may be obscured. For example, if the demand for
the final product is inelastic, and total output and total cost of
the other factors is increased, this innovation will retard land
price increases, i.e., land prices would not be enhanced as much
as they would have been in the absence of change in technology.
Conversely, if the demand had been declining, this type of inno-
vation would amplify the decrease in land prices.
Comparative Advantage.-Implicit in the preceding discus-
sion is the assumption that the innovations were applicable to
all competing areas. If this assumption is not valid, or if inno-
vations have varying degrees of applicability, then the effect
of even a land-saving innovation for lands in one area may be
to increase land prices, providing it increases the comparative
advantage of that area.
Major Recent Innovations.-Five major innovations have
been introduced since 1940.
Celery and Corn Harvesting Machines.-The introduction of
these "field packinghouses" has caused substantial reduction in
labor costs."3 Also per acre output has increased somewhat due
to decreased harvesting losses. Even if the demands for these
vegetables are inelastic, the reduction in harvesting costs is prob-
ably significant enough to contribute to increased land prices."4
Improved Insecticides.-Although the introduction of new in-
secticides has aided the production of all major crops grown in
this region, the major contribution has been in sweet corn pro-
duction. Prior to the introduction of such chemicals as DDT,
toxaphene, parathion, aldrin, nabam and zineb, it was extremely
difficult, if not impossible, to produce sweet corn commercially
in the area. With these insecticides sweet corn became an ex-
tremely profitable crop.
The introduction of new insecticides has increased total out-
put. Consequently, the impact of this technical development on
land prices will be determined by demand elasticity and/or
changes in total costs of factors other than land. If the new in-

The use of these machines permits washing, grading, and packing in
the field.
It is estimated that the savings in harvesting costs resulting from
the use of the celery harvesting machines amounts to as much as $0.20 per
package or approximately $120 per acre (within a yield of 620 packages).
Like savings may result from the use of the corn harvesting machine. (D.
L. Brooke, University of Florida Agr. Exp. Sta., unpublished data.)







Florida Agricultural Experiment Stations


secticides are relatively inexpensive substitutes for older, more
costly methods of control, the total cost of factors other than land
will be reduced. However, if the demand for the products of land
is inelastic, the reduction in total revenue may be larger than
the reduction in total cost of factors other than land and price
of land may be diminished.
These chemicals made it possible to produce sweet corn com-
mercially and thus provide another alternative use for land. The
fact that sweet corn is now sold during the winter months has
tended to shift the demand for this product to the right as con-
sumers have become accustomed to its availability.
Improved Grasses and Livestock.-With the introduction of
improved grasses and higher quality livestock, a tremendous ex-
pansion of the livestock industry took place in Palm Beach
County. Cattle prices generally increased from the beginning
of World War II until 1953. However, even in the face of lower
prices, the cattle industry of the county has continued to grow
rapidly.
Since it can be assumed that the demand facing beef pro-
ducers in this county is infinitely elastic, the impact of these in-
novations is determined by changes in total cost. These tech-
niques lower the total cost (of factors other than land) of a
given output of the higher grades of slaughter animals. In ad-
dition, better grades of livestock increase the total revenue of
the cattle industry. Higher quality animals utilize the forage
from improved pastures more efficiently. Within reasonable
limits the increase in cost due to better stocker cattle will be
more than offset by an increase in total revenue from the grass-
fattened cattle. The high value productivity of land used as
improved pasture has undoubtedly had a significant effect on
land prices.
Water Control Technology.-The multi-purpose Central and
Southern Florida Project represents an effort to achieve the
maximum use of the water resources of southern Florida. The
project envisages an extensive system of water control struc-
tures which geographically will stretch from Volusia County in
the north to (and including) Dade County to the south. A great
portion of the water control facilities will be situated in Palm
Beach County, with Lake Okeechobee as the focal point. In

"' U. S. Congress, Comprehensive Report on Central and Southern Florida
for Flood Control and Other Purposes, 80th Congress, 2nd Sess. House
Doc. 643 (Washington: U. S. Government Printing Office, 1950), pp. 47-50.







Agricultural Land Prices in Palm Beach County


addition, three water storage areas are contemplated and are un-
der construction. Water from these facilities can be drawn on
during dry periods. All of Conservation Area I is situated in
Palm Beach County, as well as part of Conservation Area II.
These conservation pools lie between Areas I and II (Figure 17).


5-76 .5 -46
LAK(
L'L A K FC-16

OKEECHOBEE L-
L-09 L-IO


S-43

S-2

S L-20 t
L-25

L-7







L-I" 8 L-6 3 910 J
L---- 2


Legend

S 'forks completed or under construction.
mmm Planned works or existing works to Le improved (cost
estimate prepared).
Authorized works.
SPump station.
0 Gated spillway
c3 Gated culvert.
Fig. 17.-Major water control facilities of Palm Beach County.
Source: Central and Southern Florida Flood Control District.

The over-all purposes of the project are: (1) flood protection,
(2) reclamation of land, (3) protection of fish and wildlife, (4)
navigation, (5) prevention of salt water intrusion in the under-
ground water supply of the lower East Coast, (6) extension of
the economic life of the organic soils around Lake Okeechobee






Florida Agricultural Experiment Stations


and (7) conservation and maximum utilization of the water sup-
ply of this part of the state.
The over-all effect of the Central and Southern Florida Project
on agricultural production will be to increase the total output and
decrease the total cost of factors other than land. Thus, there
may be two opposing forces influencing land prices. For those
products with elastic demands there will be a tendency to bid up
the price of land. Conversely, for those products that have an
inelastic demand, lowered bids for land will result."" The final
price of land will be lower only if the decrease in the value pro-
ductivity for those products having inelastic demands is more
than proportional to the increase in value productivity of land
for those products with elastic demands. In any case, the quan-
tity of land devoted to the products with inelastic demands will
be smaller.
Water Control in the Major Sub-Areas of Palm Beach County.
-The types and extent of water control vary widely between the
major sub-areas of the county, and thus have varying effects on
land prices.
Area I.-Prior to the Central and Southern Florida Flood
Control Project, vast sums of money had been spent for drainage
and flood control. Furthermore, a major portion of the struc-
tures that have been constructed or are planned are located in
this part of the county. In addition to the major water control
facilities, most of the drainage districts in the county are located
here (Figure 18). These districts provide the secondary water
control necessary for agricultural production.
Area II.-There are no major water control works in this
part of the county. Some facilities contemplated under the Cen-
tral and Southern Florida Flood Control Project will enhance
the usefulness of these lands for agricultural purposes. How-
ever, none of these works is yet under construction. The provi-
sion of secondary water control facilities is, of course, dependent
on a system of major canals and structures. Therefore, only one
small drainage district is located in this area.
Area III.-For many years this part of the county has had a
water control system provided by the Lake Worth Drainage
District. No major works in this area are planned under the
Central and Southern Florida Project, although the conservation
pools (primarily Conservation Area I) will provide a more ade-
This is true only if the decrease in total revenue is more than the
decrease in cost.







Agricultural Land Prices in Palm Beach County


quate supply of irrigation water. The major benefits of the
project in this area accrue to the urban population through the
provision of recreation areas and an adequate water supply.


Fig. 18.-Subdrainage districts in Palm Beach County. 1, South Florida
Conservancy; 2, South Shore; 3, East Shore; 4, Richland; 5, East Beach;
6, Pahokee; 7, Pelican Lake; 8, Highland Glades (active for debt liquidation
only); 9, Gladeview (debt liquidation only); 10, Shawano; 11, North New
River (organized for future use, not yet activated); 12, Greenfield (not yet
activated); 13, Acme; 14, Loxahatchee; 15, South Indian River; 16, Lake
Worth; 17, Islands Flood Control (not organized for normal maintenance,
operation or construction purposes; active principally for legal and fiscal
reasons). Source: Central and Southern Florida Flood Control District.

FACTOR SUBSTITUTION
The demand for a factor of production is determined not only
by its value productivity and the state of technology, but also
by the prices and supplies of substitutes for that factor.67 Thus,
the price of land is in part determined by the substitution possi-
bilities between land, labor, capital and the prices and supplies of
labor and capital relative to land. The state of technology de-
termines the substitution possibilities.

"7 George F. Stigler, The Theory of Price (New York: Macmillan, 1952),
p. 189.







Florida Agricultural Experiment Stations


Within reasonable limits it is safe to assume that the prices
of labor and capital can be treated as exogenously determined
from the standpoint of Palm Beach County agriculture.68 Thus,
as the farmers attempt to substitute labor and/or capital for
land (or vice versa), the price of land will be affected within the
limits of the substitution possibilities.
Trends in Factor Prices in Relation to Each Other.-There
have been rather significant changes in the prices of the various
factors of production during the 16 years under consideration.
The magnitude of these changes, of course, is important because
Index

350


300



250


200



150


100 - 1947-49 100
S" Cor,..oities
~ Oniy
land Prices
50
5 .*o ... Wage Rates


01 r-----,-i-I-l ---I-----.----.--.-----
1940 41 42 43 44 45 46 47 48 49 50 5152 53 54 1955
Year
Fig. 19.-Indexes of land prices per acre in Palm Beach County, com-
modities used in production, and wage rates, 1940-55. (1947-49 = 100.)
Commodity and wage indexes from USDA, ARS, The Farm Cost Situation,
ARS 43-29, May 1956.
Certainly the net price of capital is deterimned exogenously. This
county utilizes a significant portion of the total supply of migrant labor,
and in a short-run sense might affect its price. However, it is doubtful
that the producers in this area could have much influence on the long-run
determination of the price of labor.







Agricultural Land Prices in Palm Beach County


the extent of relative changes in factor prices determines the
rate of adjustment of these changes.
Land Prices.-Prior to 1947-49 the prices of some of the other
factors increased more rapidly than land prices (Figure 19).
Land prices have risen more rapidly since 1947-49 than the prices
of the other factors.
Labor Prices.-The price of labor increased faster than the
other major factors prior to 1947-49 (Figure 20). Since 1947-49
wages have not risen as rapidly. The increase in wage rates
amounted to only 20 percent through 1955.
Capital Prices.-The Price of Capital Goods.-The prices of
these goods have made significant gains during the 16-year
period studied. The prices of motor vehicles and farm machinery
have increased 26 percent and 32 percent, respectively, since
1947-49. Smaller increases have occurred in the prices of ferti-
lizer, farm supplies, and building and fencing materials.

Index

650

600
6oo .

550

500

450 -
400

350
300 / otal Areas
Combined
250 + /
S / --- Area I
200 c'/ .oo. Area II

150 O ww Area III

100 19,7-L) = 100

50

0
1942 43 44 45 46 47 48 49 50 51 52 53 54 1955
Year
Fig. 21.-Indexes of five-year moving average of weighted average land
prices per acre in Palm Beach County and its three major sub-areas by
years, 1942-55. (1947-49 = 100.)







Florida Agricultural Experiment Stations


The Price of Capital Funds.-The interest rate on interme-
diate and long-term funds appears to have declined somewhat
since 1940. On the other hand, short-term rates have not altered
appreciably. The interest rate on intermediate- and long-term
funds is the only production cost that has declined.
Factor Use.-Total use of the factors of production has in-
creased since 1940. Fertilizer consumption increased 166 per-
cent from 1940 to 1955, while the total quantity of labor has
remained rather constant (Tables 17 and 18). A significant
increase over time in the use of long-term and short-term credit
has also taken place.
Factor Use per Acre of Vegetable Land.-Real inputs per acre
(including labor) have increased in Area III on all of the major
crops except squash (Table 19). In Area I the inputs per acre
on celery have increased, while those on sweet corn have in-
creased slightly. Inputs on snap beans have remained rather
constant. Labor inputs per acre on celery rose from 1947 through
1949, but have declined since the introduction of the celery har-
vesting machine. Labor inputs on sweet corn also have been
declining since the corn harvesting machine was introduced.
The use of labor on snap beans has been rather variable, but
there does not appear to be any significant upward trend.
Factor Use per Acre of Pasture Land.-No quantitative data
are available to estimate the trends in the use of labor and capital
on pastures. There is a definite trend, however, toward increas-
ing the amount of improved pastures. It appears that the
quantity of capital and labor per acre of pasture land is in-
creasing.
PART III

LAND PRICES AND VALUES, 1940-1955
Land prices and values in Palm Beach County increased sig-
nificantly prior to 1947-49. From 1942 to 1947-49 land prices
and values increased 155 percent and 64 percent, respectively
(Figure 21). The per-acre gain in price amounted to $27, while
the gain in value was $18 (Tables 20 and 21).
The most rapid increase in county land prices has occurred
since 1947-49. In this period the per-acre price of land increased
$90. Values, however, have not increased as rapidly. The per-
acre gain in land values amounted to $77 during this time, an
increase of 170 percent.







Agricultural Land Prices in Palm Beach County


100 ."^ 1947-49 = 100

,,,, *, .* -- ,Motor Ve'icles
..... -- BuildinC and
"' Fencing: Iater-als
S'" Fertilizer
50. *. Farm Mac:in ry





1940 41 42 43 44 45 46 47 48 49 50 51 52 53 5 1955
Year
Fig. 20.-Indexes of prices paid by farmers for specified commodities
used in production, 1940-55. (1947-49 = 100.) Source: USDA, ARS, The
Farm Cost Situation, ARS 43-29, May 1956.

When all real estate transactions in the county are considered,
the value in current dollars per deed recorded increased from
$4,659 to $8,617, or 85 percent, between 1948 and 1955 (Table
22). The average value of deeds recorded in constant dollars
increased 75 percent over the 1948 average. The total consider-
ation involved in all real estate transactions increased from ap-
proximately $38,000,000 in 1948 to $126,000,000 in 1955. During
that time, there was a substantial increase in land market ac-
tivity.
Land Prices and Values in Area I.-Land prices rose less rap-
idly in this section of the county than in the other two areas.
On the other hand, the absolute increases in per-acre price were
larger in this part of the county.
From 1942 to 1947-49 land prices rose 245 percent, while
values increased 121 percent, representing an absolute increase
or approximately $60 and $46 per acre, respectively.
The major absolute increases in land prices and values have
occurred since 1947-49. Land prices increased $120 per acre







Florida Agricultural Experiment Stations


since that period, while land values increased approximately $100
per acre, or 145 percent and 122 percent, respectively.
Land Prices and Values in Area II.-Land prices and values
have increased more rapidly in this area than in any other sec-
tion of the county. From 1943 to 1947-49 land prices and values
increased 264 percent and 144 percent, respectively, and increased
even more later. Since 1947-49 land prices increased 531 per-
cent, an absolute increase of approximately $72 per acre. Dur-
ing the same period the per-acre value of land increased 471 per-
cent, or an average of approximately $64 per acre.
Over the entire period, land prices have increased 2,197 per-
cent since 1943, a per-acre gain of $81. Values have also sub-
stantially increased with a gain of 1,295 percent, or approxi-
mately $71 per acre.
Land Prices and Values in Area III.-Land prices and values
in this area have increased more rapidly than in Area I, but less
rapidly than in Area II. Prior to 1947-49 land prices and values
rose substantially, but the gains were not as rapid nor as ex-
tensive as those which have taken place in recent years. Be-
tween 1942 and the base period land prices increased 174 percent,
a per-acre gain of $33, while values increased $22.
Since 1947-49 land prices and values have increased 204 per-
cent and 178 percent, representing increases of $105 and $91,
respectively.
PART IV

SUMMARY AND CONCLUSIONS
The several major factors which influence the price of land
have a different impact on land prices in each of the three areas
studied.
Changes in the Demand for the Products of Land.-The over-
all demand for the products of land has increased significantly
since 1940. This increase has affected directly the value pro-
ductivity of land.
Demand for Site.-Much of the increase in land prices in
Area III stems from urbanization. Although comparatively neg-
ligible, the increased urban demand for land has had an indirect
effect on the price of land in Areas I and II, since some of the
agricultural enterprises located in Area III have been transferred
to these areas.






Agricultural Land Prices in Palm Beach County


Speculative Activities.-Speculation has undoubtedly in-
creased land prices since 1940, but not as extensively as during
the land boom of the 1920's. Speculation in anticipation of urban
development is most pronounced in Area III. The promise of ex-
tensive water control under the Central and Southern Florida
Flood Control Project no doubt has increased speculation, par-
ticularly in Area I.
Demand for Agricultural Products.-The demand for the agri-
cultural products of the county has increased during the period
under study. Increased demands for fresh vegetables have more
impact in Areas I and III. The influence on land prices from in-
creases in demand for horticultural specialties and dairy products
have been primarily confined to Area III. Increases in demand
for beef (until 1952) have affected land prices chiefly in Areas
I and II, while all of the impact of an increased demand for sugar
has been in Area I.
Changes in the Quantities of Land Available.-Throughout
most of the 1940's the quantity of land used in agricultural pro-
duction could be expanded appreciably, a factor which retarded
the rate of increase of land prices. However, in the early 1950's
significant acreages were withdrawn from the market, and the
supply of Murphy Act lands became exhausted. Since little un-
improved acreage is now available for improvement, land prices
have risen appreciably.
Most of the remaining unimproved lands are located in Areas
I and II and most of the expansion in agricultural land took place
in these areas. Most of the unimproved acreage in Area I is
not available for agricultural use at present.
Subsidence.-Subsidence of the organic soils also influences
land prices. Since the value of these lands is a function of both
the annual rent and their economic life, values are diminished
as the soils are consumed. The extent of the increases in value
of these lands in the past can be explained in terms of (1) changes
in expectations regarding the value productivity of the soils and
(2) the limited economic horizon of individuals. It is apparent,
however, that as more and more of this resource is consumed,
increases in expectations become less significant and the eco-
nomic horizon of individuals assumes more importance.
Risk and Uncertainty.-The impact of natural hazards on
land prices tends to vary with location. The lands in Area III
are exceptionally frost-free and part of their value is attributable
to this characteristic. On the other hand, crop damage due to







Florida Agricultural Experiment Stations


heavy rainfall is less in Area I during the fall months. This tends
to offset some of the relative advantage of the frost protection
in Area III.
In the case of the islands in Lake Okeechobee, the quantita-
tive impact of risk and uncertainty can be estimated. Climatic
advantages of the islands are valued at approximately $199 per
acre above the value of land on the mainland. Further, delays
in planting due to high lake levels reduce the income of farmers
and thus the price of land. An average delay of one week in
planting could reduce the value of island land as much as $116
per acre.
Attempts to diversify to meet both market instabilities and
natural hazards contribute somewhat to income stability. How-
ever, the chief significance of diversification for land prices lies
in the fact that the demand for fresh vegetables is inelastic.
In the aggregate, producing more than one vegetable crop, add-
ing beef cattle to the enterprises or both tends to increase the
value productivity of the land.
Agricultural Credit.-Significant changes in the agricultural
credit market since 1940 have had an appreciable influence on
land prices.
Mortgages Recorded.-The use of both short- and long-term
credit has increased greatly since the end of World War II. Most
of these funds were loaned in Areas I and III. The use of long-
term credit in Area III has increased appreciably; short-term has
declined.
Repayment Terms.-The repayment terms of long-term mort-
gages have become increasingly liberal and are no doubt respon-
sible for part of the increases in land prices. Repayment terms
are most liberal in Area III and in turn, more liberal in Area I
than Area II. Terms of repayment of short-term loans have
been altered to fit the seasonal patterns of crop sales, thus the
use of these funds.
Interest Rates.-Interest rates on intermediate- and long-
term agricultural loans have decreased approximately 17 per-
cent in the 16-year period from 1940 to 1955. With a stable
price level, land prices would be enhanced as much as 17 percent,
with a decline in the interest rate from 6 percent to 5 percent.
But the general price level increased 116 percent from 1940 to
1955."6 Assuming that land rent increased proportionally to the

As measured by the percentage increase in the index of wholesale
prices.







Agricultural Land Prices in Palm Beach County


increase in the price level, land prices could have been expected
to increase approximately 159 percent from the combination of
changes in the interest rate and price level. Land prices actually
increased 665 percent, indicating that increases in value produc-
tivity were considerably larger than increases that could be at-
tributed to inflation and a lowered interest rate.
Technological Innovation.-Static analysis of the impact of
technological innovations may yield results which appear incon-
sistent with reality. Changing demand conditions for the prod-
ucts of land may obscure the impact of innovations which would
tend to reduce land prices. This should not be taken to mean
that the technical change had no effect, but rather that product
demand changes have moderated the effect of this change. How-
ever, if demand is decreasing, the aforementioned change may
amplify the decrease in land values.
Further, in the study of Palm Beach County as a specific
area, innovations which would tend to depress the value produc-
tivity of vegetable land probably do not have a major effect on
the over-all price of land. This may be attributed to: (1) the
relatively smaller acreage devoted to vegetables and (2) alterna-
tive land uses, such as cattle and sugar cane where marginal
value productivity does not decline extensively with an increase
in land devoted to these products. The impact of the various
innovations on land prices varies directly with their applicability
in the three major sub-areas.
Area I.-The Everglades region has been one of the most
widely publicized agricultural areas in Florida. It has also been
widely misrepresented. Only years of research and extensive
private and public expenditures for water control have made
the production of agricultural commodities profitable.
Crop and Livestock Technology.-The major innovations have
been: (1) the application of essential minor elements to organic
soils, (2) the growing of new and more locally adapted varieties
of plants, (3) the use of insecticide, more effective insecticides
and fungicides and (4) introduction of higher quality livestock.
Without the discovery of the missing minor elements and pest
control measures, this area could not have become a major agri-
cultural region.
Since the soils of Area I differ from those in the remainder
of the county, many of the innovations are unique to this area.
However, most of the insecticide developments are applicable in
all of the major vegetable areas.






Florida Agricultural Experiment Stations


Since all of the celery in Palm Beach County is produced in
Area I, the celery machine has not directly influenced land prices
in other sections of the county. The corn harvesting machine
can be used in Area III, but due to the smaller operations does not
achieve maximum efficiency in this area.
Water Control Technology.-Nearly all of the public expendi-
tures for water control facilities have occurred in Area I. There-
fore, these facilities have had the major effects on land prices
in this area. The general nature of these works has been to in-
crease the advantage of this area over competing areas, and
also to reduce costs by lessening the flood hazard. Private ex-
penditures for water control also have been more extensive in
this area than elsewhere in the county.
Area II.-Most of this area is undeveloped for both agricul-
tural and urban use. In general, most of the major technological
innovations have had little influence on land prices.
Crop and Livestock Technology.-The major innovations af-
fecting land prices in this area have been applicable in the live-
stock industry. Improved grasses, better plant and animal nu-
trition and improved livestock have definitely enhanced the value
of land in this part of the county.
Water Control Technology.-There are few water control fa-
cilities in this area and, consequently, improved water control
has had little influence on land prices. There are some minor
works approved under the Central and Southern Florida Project,
but the benefits of these works will not be realized for some time.
Area III.-New agricultural innovations have had less in-
fluence on land prices in this area than elsewhere in the county.
Crop and Livestock Technology.-The chief innovations af-
fecting this area have been the introduction of new insecticides
and improved pasture grasses.
Water Control Technology.-This part of the county for years
has had a water control system provided by the Lake Worth
Drainage District. In general, the least immediate gain from
the Central and Southern Florida Project accrues to this area,
although lateral connections to Conservation Area I will provide
additional irrigation water. This does not mean that the Project
will not affect land prices, but rather that benefits will be more
diversified and long-run in nature. Such things as providing
recreational areas (in the conservation pools) and a more ade-
quate supply of water to support an expanding urban population
are not reflected as immediately in land prices as are water con-






Agricultural Land Prices in Palm Beach County


trol facilities that reduce the risks and thus, the cost of agricul-
tural production.
Factor Substitution.-Inadequate data preclude empirical de-
termination of the effect of factor substitution on land prices.
Intuitively, however, substitution of labor and capital (particu-
larly capital) for land, as its price has risen relatively to the
other factors, has retarded land price increases, within the limits
of the substitution possibilities.
The Theory of Factor Pricing.-Results of this study do not
invalidate the current theory of factor pricing. However, there
are four significant gaps in this theory. (1) Under dynamic con-
ditions it is difficult, if not impossible, to determine the impact
of uncertainty on land prices, except to recognize that the users
of this factor tend to discount prices because of variations in
outcome that do not have a probability distribution. This dis-
count may be too high or too low at any given time; hence, the
human element increases the magnitude of land price fluctu-
ations. The process of decision making and the formulation of
expectations under dynamic conditions has been studied by em-
inent economists, but as yet no adequate theory explaining them
has been developed. (2) Imperfect knowledge in the land market
may extend the time required for the market to attain an equi-
librium. However, this is not a criticism of the theory, but in-
stead limits empirical analysis. (3) The theory of the impact
of technological innovations on land prices needs further exten-
sion to permit more adequate understanding of the effects of
technology in a given area and the resulting shifts in relative
advantage throughout the economy. (4) The classical concepts
of supply and demand are difficult to apply to a heterogeneous
(from both a quality and spacial standpoint) commodity such
as land.
Most needed are extensions of economic theory to include
dynamic conditions and a more adequate definition of the sup-
ply of land.
Future Pattern of Land Use and Land Prices.-Area I. Sev-
eral counteracting forces will affect land prices. (1) The new
lands that will be developed under the Central and Southern
Florida Project will retard future price increases. The extent
will depend upon the rate of increase in demand for the special-
ized agricultural products produced in this part of the county.
(2) Land prices will be influenced by the policies of public agen-







Florida Agricultural Experiment Stations


cies holding title to lands. These agencies can influence land
prices by selling or withholding land. (3) The demand for fresh
vegetables appears to be inelastic, which implies that substantial
increases in output would lower the value productivity of veg-
etable land. However, the demand for beef and sugar produced
here is infinitely elastic, and reduction in the losses from floods
will probably more than offset any decrease in the value produc-
tivity of vegetable land. The amount of land devoted to veg-
etable production will adjust to demand condition and the over-
all value productivity of land will be increased. (4) As sub-
sidence continues, the value of the organic soils will decline.
Area II.-Land prices can be expected to increase rapidly in
this area. Increasing urbanization and tourism will cause land
prices to increase substantially along the coast. Extensive agri-
cultural development will cause farm land prices to rise.70 As
Area I goes out of production, this part of the county can be
expected to become increasingly important in the production of
beef cattle and fresh vegetables.
Area III.-Increased income and population has more signifi-
cance in this area than in the other two. With an increasing
national income, urbanization and tourism can be expected to
continue to increase rapidly, causing land prices to continue
to rise.

7o Since the completion of this study, a substantial acreage in this area
has been withdrawn from the market and is being used as an aircraft engine
testing area.






APPENDIX A

STATISTICAL TABLES

TABLE 1.-CLIMACTIC SUMMARY OF PALM BEACH COUNTY, FLORIDA.


Station





Belle Glade ...
Hypoluxo ..-...
Jupiter .........
Ritta ................


Length
of
Record


January I
Average I

F.

64.1
67.8
66.4
65.0


Temperature

July I Maximum Minimum
Average

F. F. F.

79.9 100 25
81.2 100 26
81.0 99 24
80.5 98 29


Length
of
Record

Yr.


Killing Frost Average

Last in Last in
Spring Fall


February 4
(7)-
(2)----
(8)----


Annual Precipitation
Length I
Station of Jan. Feb. Mar. April May June July Aug. Sept.
S i Record [ I

Yr. In. In. IIn. | In. In. In. In. In.

Belle Glade .... 15 1.65 1.70 3.30 3.41 4.14 9.58 7.19 8.12 9.36
Hypoluxo... 39 3.05 2.92 2.94 3.49 5.03 7.67 5.34 5.51 8.13
Jupiter 20 3.76 2.40 3.70 2.81 4.32 6.52 6.03 6.77 8.48
Ritta .............. 18 1.42 1.55 2.32 2.56 4.78 5.82 6.44 6.31 6.90

Figures in parentheses denote the frequency of observed killing frosts during period indicated.
** Length of growing season between average dates of last killing frost in spring and first in fall.


Oct.


In.

4.49
9.04
11.16
4.76


December 23
(8)-
(2)----
(4)----
(4) -




Nov. De(


In. In

2.75 1.(
3.63 2.(
3.00 2.'
1.19 1.2


Source: 1941 Yearbook of Agriculture. "Climate and Man," United States Department of Agriculture.


Dates*
Growing
Season
**

Days

322







Annual


S In.

)1 56.70
)0 58.75
32 61.27
18 45.23







Florida Agricultural Experiment Stations


TABLE 2.-VALUE OF AGRICULTURAL COMMODITIES PRODUCED IN PALM
BEACH COUNTY, 1954-55.


Commodity


Vegetables .... ........................
Sugar and by-products ..............
F iber .... .... .... ... ....
Grains and grasses ...-..............
Beef cattle ...................................
Dairying .............. ....................
Citrus ............. ..............-.. .... ..
Horticultural specialties ..............
Poultry ...................................
F ish ........... ..................................
Miscellaneous .......... ....................


East Coast
Area
(Dollars)

$13,500,000


1,500,000
4,006,250
250,000
4,500,000
350,000
1,500,000
1,250,000


Everglades
Area
(Dollars)

$28,000,000
12,200,000
1,187,500
200,000
6,000,000
100,000



250,000


County
Total
(Dollars)

$41,500,000
12,200,000
1,187,500
200,000
7,500,000
4,106,250
250,000
4,500,000
350,000
1,500,000
1,500,000


Source: Palm Beach County Resource Development Board, Resources
Development Board News (West Palm Beach: July 1955), Vol. XI, No. 10.




TABLE 3.-AGRICULTURAL LAND USE IN PALM BEACH COUNTY BY
SPECIFIED YEARS, 1940-1954.


Proportion of
Land in Farms
(Percent)

6.3
23.0
31.0
35.3

Cropland
Harvested
(Acres)

49,917
72,623
65,595
78,870


Land in Farms
(Acres)

80,175
278,090
392,228
446,554

Total
Cropland
_ (Acres)

66,537
125,099
143,617
140,766


Nu

(N


In
P
(


imber of Average Size
Farms of Farm
Number) (Acres)

808 99.2
1,139 244.2
851 460.9
874 510.9

proved Total
'asture Pasture*
Acres) (Acres)


47,401


118,392
202,614
285,441


Includes cropland pastured.
Source: U. S. Department of
of Agriculture (Washington: U.
Part 18, 1940-1954.


Commerce, Bureau of the Census, Census
S. Government Printing Office), Vol. I,


Year


1940
1944
1949
1954


Year


1940
1944
1949
1954







Agricultural Land Prices in Palm Beach County


TABLE 4.-TYPICAL VEGETABLE OPERATION-AREA I, 1954-55 SEASON.


Crop


Snap beans ........

Sweet corn ......

Celery ................
I


Acres


500

700

500


Total ................. ....................


Yield/Acre Pri


100 bu.


ce/Unit I Sales


$2.14 $ 107,000.00


160 crts. 1.89 211,680.00

636 crts. 2.29 728,220.00


.............................................. $1,046,900.00


CASH EXPENSES
Seed and seedbed ..................... .... .. ................. $ 23,022.00
Fertilizer .......................... ............ ........ ................. 89,880.00
Spray and dust ........................................ ................. 54,853.00
Airplane application .-..... ......- .... ......... ...-... ......... 00.00
M machine hire .................. ...... ............ ........... ..... 3,603.00
Gas, oil and grease .................................................. 23,892.00
Repair and maintenance ............................................ 24,178.00
Licenses. insurance, and selling commissions ............ 52,987.00
Hired labor ............................................................. 291,754.00
Containers ....................................... 187,639.00
Hauling and precooling .................... ...................... 81,346.00
M miscellaneous .......................................................... 87,780.00

Total ........... ............... ..... ........................ $920,934.00


Net above cash operating expense .............................
Net per acre above cash operating expense ...............
Cash inputs per acre-snap beans ............................
Cash inputs per acre-sweet corn ...............................
Cash inputs per acre-celery ................................


125,966.00
74.10
221.71
297.26
1,045.91


Source: Typical acreage and allocation between crops determined from
unpublished data of the University of Florida Agricultural Experiment
Station. Costs and returns data taken from D. L. Brooke, Costs and Returns
from Vegetable Crops in Florida, Season 1954-55, University of Florida
Agr. Exp. Sta. Agr. Econ. Dept. Mimeo Report 56-7, (March 1956).







Florida Agricultural Experiment Stations


TABLE 5.-TYPICAL VEGETABLE OPERATION-AREA III, 1954-1955 SEASON.


Crop


Snap beans .......

Sweet corn -... -

Green peppers ..


Acres


200

50

20


Yield/Acre


103 bu.

177 crts.

552 bu.


Total ..... .................


CASH EXPENSES


Seed and seedbed ..........
Fertilizer ....-.........
Spray and dust -.........
Airplane application ...
Machine hire .........-.....
Gas, oil, and grease ......
Repair and maintenance
Licenses, insurance, and
Hired labor ...................
Containers ................
Hauling and precooling
Miscellaneous .............

Total ................-
Net above cash operation
Net per acre above cast
Cash inputs per acre-s
Cash inputs per acre-s
Cash inputs per acre--


................................$ 3,869.40
............................. ................ 15,180.70
--..- ..--- ....... ...... 4,590.90
.............. .. .............. 417.50
.------ ... .............- 1,966.10
-..... .... ........ ....... ..- . 3,240.70
e .......................................... .... 2,968.30
selling commissions .............. 4,205.00
......................... ....... ....... ........ 33,772.90
.......... ...... .... .. ............... 14,358.60
................. .. ..................... 4,603.00
. .. .............. .......... ........... 1,168.60

.......... ......... .. .. ................. $90,341.70
g expense ................................. 18,511.60
Operating expense ................ 68.64
nap beans .......................... 254.05
weet corn .......................... 394.40
peppers ............................. ... 986.77


Source: Typical acreage and allocation between crops determined from
unpublished data of the University of Florida Agricultural Experiment
Station. Costs and returns data taken from D. L. Brooke, Costs and Re-
turns from Vegetable Crops in Florida, Season 1954-55, University of
Florida Agr. Exp. Sta. Agr. Econ. Dept. Mimeo Report 56-7, (March 1956).


Price/Unit


$2.87

2.67

2.36


..................


Sales


$ 59,122.00

23,668.50

26,062.80


$108,853.30







Agricultural Land Prices in Palm Beach County


TABLE 6.-VALUE OF ALL AGRICULTURAL PRODUCTS AND SELECTED COM-
MODITY GROUPS SOLD IN CURRENT DOLLARS IN PALM BEACH COUNTY AND
FLORIDA BY SPECIFIED YEARS, 1940-1954.


Year



1940
Palm Beach
County ...... !
Florida ..........

1944
Palm Beach
County ......
Florida ..-......

1949
Palm Beach
County ......
Florida ..........

1954
Palm Beach
County ......
Florida .........


Value of
All Agri-
tural
Products
Sold



7,203,531i$
88,904,396


15,540,699
257,601,119


Value of
All Crops
Sold


Value of
Vege-
tables
Sold


6,558,134 $ 5,918,021 $
61,068,998 20,107,235


13,883,650 11,386,535
193,286,267] 42,420,557


Value of
Whole
Milk
Sold


Value of
Horticul-
tural
Special-
ties Sold


479,9231$ 347,705
8,229,9321 1,114,447


1,015,089 633,349
19,925,911


21,003,231| 16,333,439, 13,571,766. 2,114,4231
338,645,416 249,514,2831 59,742.708 34,423,300
1


34,614,947 27,070,968
466,115,9511 355,235,305


20,951,8901
78,261,7351
1


1,323,515
7,245,053


3,068,4531 2,904,000
48,267,313 27,591,610


-*Not available.


Source: U. S. Department of Commerce, Bureau of the Census, Census
of Agriculture (Washington: U. S. Government Printing Office), Vol. I, Part
18, 1940-1954.












TABLE 7.-ACREAGES OF SELECTED VEGETABLE


CROPS FOR HARVEST IN PALM BEACH COUNTY BY CROP SEASON YEARS,
1945-46 1953-54.


Crop Year


Vegetable Crop



Lima beans ...................
Snap beans ................
Cabbage .........................
Celery ...........................
Corn, sweet ....................
Cucumbers ....................
Escarole ........................
Lettuce* ............. .........
Peas, green ------------------.
Peppers ...-..................
Potatoes ............................
Squash ............................
Tomatoes .....................

Total acreage all
vegetable crops** .........


1945-46
(Acres)

3,020
48,800
2,800
5,175

775
1,450
650
650
1,750
9,200

1,850


77,330


1946-47
(Acres)

1,900
50,400
3,100
4,300

1,925
1,700
1,025
800
1,775
3,650

800


72,150


1947-48
(Acres)

2,150
48,500
3,600
4,000
1,250
1,850
2,000
740
200
2,000
1,100
1,200
975


70,690


1948-49
(Acres)

1,335
51,800
3,250
3,075
4,400
675
1,950
900
200
2,050
1,370
1,650
600


74,010


1949-50
(Acres)

1,350
47,800
4,350
3,500
11,000
750
2,500
1,425
125
3,150
1,850
1,750
900


81,175


1950-51
(Acres)

1,350
41,400
6,500
4,100
12,650
565
3,650
1,400
250
2,350
1,550
1,850
900


78,930


1951-52
(Acres)

575
43,500
4,550
4,210
19,500
450
3,300
1,100

2,550
1,225
2,200
1,375


85,210


1952-53 1953-54
(Acres) (Acres)


735
36,500
5,600
4,050
19,825
700
2,400
1,375

2,550
2,700
1,700
2,200


81,290


* Includes Glades County acreages.
** Total acreage includes minor vegetables not specified.


Source: U. S. Department of Agriculture, Crop and Livestock Reporting Service, Florida Vegetable Crops, Annual
Statistical Summaries (Orlando, Florida: 1945-1954), Vols. I-X.


425
38,200
3,900 2
4,745
25,000
670
2,900
1,000

2,765
900
1,525
2,300

85,265 -
85,265 S

0








Agricultural Land Prices in Palm Beach County


TABLE 8.-NUMBER OF CATTLE ON FARMS, ACRES OF PASTURE, NUMBER OF
CATTLE SOLD AND VALUE OF CATTLE SOLD IN CURRENT DOLLARS IN PALM
BEACH COUNTY BY SPECIFIED YEARS, 1940-1954.


Acres of
I Acres of Cropland
Improved Used for
Pasture Pasture
(Acres) (Acres)

10,763

S 36,389

S 34,349

47,401 28,841


T
Pa
(A




11

20:

28.


Number
otal of
sture Cattle
cres) Sold
(Number)

1,220 $

8,392 4,663

2,614 22,201

5,441 48,844


Source: U. S. Department of Commerce, Bureau of the Census, Census
of Agriculture (Washington: U. S. Government Printing Office), Vol. I,
Part 18, 1940-1954.




TABLE 9.-SUGAR CANE: ACREAGE HARVESTED FOR SUGAR, QUANTITY PRO-
DUCED, AND VALUE IN PALM BEACH COUNTY BY SPECIFIED YEARS, 1945-1954.


Acres of Sugar
Cane Harvested
for Sugar
(Acres)

2,430

3,722

6,109


Tons of Sugar
Cane
Produced*
(Tons)

75,300

115,382

189,379


Estimated on the basis of an average yield of 31 tons of cane per acre.
** Tons of sugar cane produced multiplied by the average price received by farmers
for sugar cane (prices reported in The Sugar Situation, AMS, USDA).

Source: U. S. Department of Agriculture, Florida Agricultural Stabiliz-
ation and Conservation Committee, Annual Summary, (Gainesville: 1945,
1949 and 1954). 1945 acreage estimated from the total acreage in the
Lake Okeechobee area.


Year



1940 -.

1944 ..

1949 ..

1954 ...


Number
of
Cattle
(Head)

6,614

17,400

39,882

84,238


Value of
Livestock
Sold
(Dollars)

67,356

330,851

2,138,882

3,933,170


Year


1945

1949

1954


Value of
Sugar Cane
Produced**
(Dollars)

$ 317,766

899,980

1,266,946








Florida Agricultural Experiment Stations


TABLE 10.-PRIVATE LAND SALES AS A PROPORTION OF TOTAL ACREAGE SOLD
IN SAMPLE TRACTS IN PALM BEACH COUNTY BY YEARS, 1940-1955.


Year


1940 ..........
1941 .............
1942 .............
1943 ..............
1944 ..............
1945 ............
1946 .............
1947 .............
1948 ..............
1949 ..............
1950 ..............
1951 ..............
1952 ..............
1953 ..............
1954 ..............
1955* .
1955* ............

First six month


Private Land
Sales
(Acres)


3,491
3,941
9,659
15,668
10,450
15,457
4,634
3,837
2,815
3,124
21,474
12,178
10,106
7,282
9,672
19,185


Total Land
Sales
(Acres)


4,842
6,154
9,915
17,098
13,024
16,953
8,523
3,837
3,135
4,568
21,474
12,610
10,118
7,299
9,672
19,185


Private Land Sales
as a Percent of
Total Acreage Sold
(Percent)


72.1
64.0
97.4
91.6
80.2
91.2
54.4
100.0
89.8
68.4
100.0
96.6
99.9
99.8
100.0
100.0


TABLE 11.-DAMAGE REPORTED TO SNAP BEANS, SWEET CORN, AND GREEN
PEPPERS IN AREAS I AND III BY CROP SEASON YEARS, 1946-47 1954-55.


Damage from Heavy Rains


Years Serious
Damage
Reported


Area I

6


Area III

6


Damage from Frost and Freezing
Temperatures
SYears in Which
Years in Which Almost Total
1,000 or More Destruction
Acres Were Lost Was Reported


6




2


Source: Extracted from: Federal-State Marketing News Service, South-
ern Florida Vegetable Marketing Summary (Belle Glade: 1946-47- 1954-55).


Years Slight
Damage
Reported


9




8








Agricultural Land Prices in Palm Beach County


TABLE 12.-AVERAGE YIELDS, PRICES AND GROSS RECEIPTS PER ACRE OF
SNAP BEANS BY SEASON IN THE EVERGLADES REGION OF FLORIDA.*


Simple
Average Yield I
Bushels
per Acre


90

90

103


Simple
Average Prices
Dollars
per Bushel

$2.76

2.80


Weighted Average
Gross Receipts
Dollars per Acre

$242.00

255.00


2.48 258.00


Averages determined for the crop-season years 1945-46 through 1954-55.

Source: Computed from data presented in Florida Vegetable Crops,
Annual Statistical Summaries, Florida Crop and Livestock Reporting
Service, Orlando, Florida.


TABLE 13.-PRICE CORRELATION COEFFICIENTS, YIELD CORRELATION CO-
EFFICIENTS, AND COEFFICIENTS OF PRICE AND YIELD VARIATION FOR SPECI-
FIED VEGETABLE CROPS IN PALM BEACH COUNTY BY SEASONS.*


Fall
S:

P

Win
S


Season and
Crop



nap beans .....

eppers ..............

iter
nap beans ... I


Peppers .............

Snap beans .. I

Celery .......

Spring
Snap beans ......

Peppers .............

Snap beans ......

Celery .--.......... I


Price
Correlation
Coefficient


0.25



0.35



0.46


0.37
___J


Yield
Correlation
Coefficient


Coe
of
Va
(Pe


0.36**



0.34


0.02


efficient
Price
riation
percent)


29.5

56.8


10.3

20.7

10.3

28.3


18.7

36.2

18.7

48.9


Coefficient
of Yield
Variation
(Percent)






15.3**

13.3**

12.0

6.8


* Price da'a for the years 1940-1955; yield data for the years 1945-1955.
** Yields of snap beans and peppers in the East Coast area.


Source: Computed from data presented in: U. S. Department of Agri-
culture, Florida Crop and Livestock Reporting Service, Florida Vegetable
Crops Annual Statistical Summaries (Orlando, Florida: 1945-1954), Vols.
I-X.


Season


Winter

Spring







Florida Agricultural Experiment Stations


TABLE 14.-ESTIMATED TOTAL REVENUE FROM 30 ACRES OF SNAP BEANS
UNDER SPECIFIED PRODUCTION PROGRAMS BY YEARS, 1945-46 1954-55.*


Crop-Year



1945-46 ..........
1946-47 ..-.....
1947-48 ........
1948-49 ..........
1949-50 ........
1950-51 .--
1951-52 .........
1952-53 ..........
1953-54 ..........
1954-55 ..........

Average of
1945-46
through
1954-55 ......

Coefficient of
Variation .


Entire
Acreage
Harvested in
January
(Dollars)

$14,000
6,480
9,077
10,470
12,466
15,120
6,762
16,916
11,970
13,860



11,712


28.3%


Entire
Acreage
Harvested in
February
(Dollars)

$11,560
10,193
10,627t
10,980
10,498
10,410
9,324
12,222
12,285
10,568



10,867


2.5%


Entire
Acreage
Harvested in
March
(Dollars)

$10,984
16,605
6,962
8,910
6,707
9,603
9,009
11,466
12,821
9,860



10,295


26.8%


Continuous
Harvesting
in January,
February and
March**
(Dollars)

$12,181
11,093
8,889
10,120
9,890
11,720
8,365
13,535
12,359
11,498



10,965


10.1%


Average monthly prices by years taken from Table 8. Average yield data are those
used in the computations in Table 9.
** Ten acres harvested in each of the three months.
t Average monthly price estimated from the New York price of comparable quality
beans.








Agricultural Land Prices in Palm Beach County


TABLE 15.-VOLUME OF INTERMEDIATE- AND LONG-TERM MORTGAGES RE-
CORDED, WEIGHTED AVERAGE INTEREST RATES, AND WEIGHTED AVERAGE
LENGTH OF LOANS ON SAMPLE TRACTS BY SPECIFIED AREA IN PALM
BEACH COUNTY BY YEARS, 1940-1955.


Value of Mortgages
Year Recorded
I (Dollars)


I Weighted Average
Interest Rate
(Percent)


Weighted Average
Length of Loan
(Years)


Area I


1940 ........
1941 ........
1942 .......
1943 ........
1944 ........
1945 ........
1946 ........
1947 ......
1948 ......
1949 ......
1950 ......
1951 ....
1952 .......
1953 ........
1954 ........
1955* ......


$ 15,834
55,840
2,500
64,900
30,000
91,925
58,500
55,160
254,825
160,850
272,320
245,585
410,220

781,892
132,000


Area II


1940 ........ $
1941 .......
1942 ........
1943 ........
1944 .......
1945 .......
1946 .......
1947 ........
1948 ........
1949 ........--
1950 ......
1951 ........
1952 ......
1953 ........
1954 ........
1955* .....


First six months.


7,800
2,530


26,462
7,442
30,000
1,500
46,315
2,000
50,250
63,050
24,325
82,875
67,000
875,686








Florida Agricultural Experiment Stations






TABLE 15.-Continued.


Value of Mortgages
Year Recorded
(Dollars)


Weighted Average
Interest Rate
(Percent)


Weighted Average
Length of Loan
(Years)


Area III


3,40
28,17
130,00
40,00
33,00
401,00
257,75
166,00
112,00
365,68
200,09
266,72
364,26
344,10


$ 23,63
58,37
5,90
93,07
186,46
139,36
121,50
457,66
558,89
328,85
434,57
674,32
634,64
349,60
1,213,16
1,351,78


0 5.0
5 5.0
0 5.0
0 5.0
0 5.0
0 5.0
0 4.5
0 4.9
'0 4.3
9 5.2
7 5.3
7 6.2
.9 6.0
0 5.1


Three Areas Combined


4 7.0
0 5.3
0 5.6
5 6.8
2 5.1
7 4.8
0 4.9
0 5.0
0 4.9
0 5.0
0 5.0
4 5.1
2 5.1
2 6.0
1 5.5
6 5.0


* First six months.


1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955*


1940 ......-
1941 ........
1942 ........
1943 ........
1944 ........
1945 ........
1946 .......
1947 ........
1948 ......
1949 .......
1950 ........
1951 ........
1952 ........
1953 ........
1954 ........
1955* ......








Agricultural Land Prices in Palm Beach County


TABLE 16.-VOLUME OF SHORT-TERM MORTGAGES RECORDED ON SAMPLE
TRACTS BY SECIFIED AREAS IN PALM BEACH COUNTY, BY YEARS, 1940-1955.


Year Area I
S (Dollars)

1940 ...... 57,000.00
1941 ...... 41,400.00
1942 .....- 111,379.65
1943 ...... 97,000.00
1944 ...... 36,000.00
1945 ...... 36,500.00
1946 ...... 161,620.00
1947 ...... 104,373.62
1948 ...... 217,840.00
1949 ...... 491,772.64
1950 ...... 1,158,602.61
1951 ...... 813,170.00
1952 ...... 438,419.70
1953 ...... 290,000.00
1954 ...... 904,300.00
1955 ...... 15,000.00


Area II
(Dollars)


2,200.00

1,500.00








11,000.00
23,067.99
6,375.30


Area III
(Dollars)


38,100.00

45,000.00
126,000.00
172,000.00
210,000.00
280,000.00
44,000.00
50,000.00
67,500.00
60,000.00
3,200.00
3,750.00
7,000.00


Total of
Three Areas
(Dollars)

57,000.00
81,700.00
111,379.65
143,500.00
162,000.00
208,500.00
371,620.00
384,373.62
261,840.00
541,772.64
1,226,102.61
873,170.00
441,619.70
304,750.00
934,367.99
21.375.30








Florida Agricultural Experiment Stations


TABLE 17.-EXPENDITURES FOR HIRED FARM LABOR IN CURRENT AND CON-
STANT DOLLARS IN PALM BEACH COUNTY BY SPECIFIED YEARS, 1940-1954.


Year


1940 .....................

1944 .....................

1949 ....................

1954 .....................


Expenditures for
Hired Labor
(Current Dollars)

$2,771,357

5,711,489

5,746,591

9,599,679


Index of
Farm Wages
(1947-49 = 100)

30

74

100

119


Real
Expenditures*
(Constant Dollars)

$9,237,857

7,718,228

5,746,591

8,066,957


Deflated by the Index of Farm Wage Rates, 1947-49 = 100.

Source: Expenditures for hired farm labor from: U. S. Department
of Commerce, Bureau of the Census, Census of Agriculture (Washington:
U. S. Government Printing Office), Vol. I, Part 18, 1940-1954. Index of
Farm Wage Rates from USDA, ARS, The Farm Cost Situation (Washing-
ton: ARS 43-29, May 1956).


TABLE 18.-MIXED


Year


1939-40
1940-41
1941-42
1942-43
1943-44
1944-45
1945-46
1946-47


FERTILIZER CONSUMPTION IN PALM BEACH COUNTY BY
FISCAL YEARS, 1939-40 1954-55.


Fertilizer
Consumed
(Tons)

26,051
27,920
31,035
22,979
34,344
39,127
44,507
53,073


Year


1947-48
1948-49
1949-50
1950-51
1951-52
1952-53
1953-54
1954-55


Fertilizer
Consumed
(Tons)

47,548
43,185
46,749
55,501
60,785
70,488
69,617
69,270


Source: Florida Commissioner of Agriculture, Biennial Report (Talla-
hassee: Report Nos. 25-32).










TABLE 19.-REAL INPUTS PER ACRE ON SPECIFIED VEGETABLE CROPS IN AREA I AND III IN PALM BEACH COUNTY BY CROP
SEASON YEARS, 1945-46 1954-55.*


Area I

Snap Beans

otal Labor

$229 $110
204 98
219 109
220 111
201 103
152 52
201 90
229 94
215 82
247 92


Sweet

Total

$ -


371
297
263
323
309
376


Corn

Labor

$ -

I

75
69
52
53
45
54


Snap Beans

Total Labor

$219 $ 84
225 86
199 73
229 86
225 89
284 79
249 72
253 73
272 79
287 80


Area III

Peppers


Crop
Season
Year


1945-46 ......
1946-47 .....
1947-48 ......
1948-49 ......
1949-50 ......
1950-51 .....
1951-52 ......
1952-53 ......
1953-54 ......
1954-55 ......


Labor

$208
213
219
241
216
348
346
336
322
336


Squash

Total Labor

$- $-

306 112
240 77
268 90
312 73
249 53
213 44
269 58
243 53


Total inputs deflated by the Index of Prices Paid by Farmers, 1947-49 = 100. Labor inputs deflated by the Index of Farm Wage Rates, 1947-
49 = 100.

Source: Dollar inputs derived from: D. L. Brooke, Costs and Returns from Vegetable Crops in Florida (Florida Agr.
Exp. Sta., Agr. Econ. Dept., 1945-46 1954-55), Vols. I-X. These inputs include the value of short- and long-term capital.


Total

$621
607
594
649
542
935
731
796
757
903


Celery

Total I

$ -
911
921
1,116
1,046
1,038
959
987
956
988


aabor T

$ -
321


378
460
426
395
338
295
281
281







Florida Agricultural Experiment Stations


TABLE 20.-FIVE-YEAR MOVING AVERAGES OF PER ACRE LAND PRICES IN ALL
SAMPLE TRACTS IN THE THREE MAJOR SUB-AREAS AND IN ALL SAMPLE
TRACTS IN PALM BEACH COUNTY BY YEARS, 1942-1955.


Year




1942 ...-.....
1943 ........
1944 .......
1945 ........
1946 ........
1947 ........
1948 ........
1949 ........
1950 ........
1951 ........
1952 ........
1953 ........
1954 ......
1955 .......


I I I
Area I Area II I Area III
5-Year Mov- 5-Year Mov- 5-Year Mov-
ing Average of ing Average of I ing Average of
Weighted Aver- Weighted Aver- Weighted Aver-I
age Prices I age Prices age Prices
(Dollars) (Dollars) (Dollars)

25.25 18.83
25.14 3.70 21.21
38.94 4.82 21.88


45.22
52.44
67.65
85.79
97.70
115.64
147.23
167.95
159.40
180.00*
205.00*


7.16
9.95
11.17
12.80
16.45
20.55
23.45
40.25
57.16
65.00*
85.00*


34.12
34.98
37.96
53.90
63.01
67.08
90.56
115.40
126.66
140.00*
157.00*


Three Areas
Combined
5-Year Mov-
ing Average of
Weighted Aver-
age Prices
(Dollars)

17.64
18.51
17.80
23.69
27.11
38.84
42.06
54.29
65.97
80.93
94.82
104.77
123.00*
135.00*


* Extrapolated prices.


TABLE 21.-FIVE-YEAR MOVING AVERAGES OF PER ACRE LAND VALUES IN ALL
SAMPLE TRACTS IN THE THREE MAJOR SUB-AREAS AND IN ALL SAMPLE
TRACTS IN PALM BEACH COUNTY BY YEARS, 1942-1955.


194
194
194


1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955


Area I
Deflated
5-Year Mov-
Year ing Average of
Weighted Aver-
age Prices*
(Dollars)

2 ........ 37.77
3 ........ 37.52
4 ........ 57.60


65.73
66.63
70.18
82.17
98.49
112.16
128.25
150.49
144.78
163.00**
186.00**


Area II
Deflated
5-Year Mov-
ing Average of
Weighted Aver-
age Prices*
(Dollars)


5.52
7.13
10.41
12.64
11.59
12.26
16.58
19.93
20.43
36.07
51.92
59.00**
77.00**


Area III
Deflated
5-Year Mov-
ing Average of
Weighted Aver-I
age Prices*
(Dollars)

29.33
31.66
32.37
49.59
44.45
39.38
51.63
63.52
65.06
78.89
103.41
115.04
127.00**
143.00*"*


Three Areas
Combined
Deflated
5-Year Mov-
ing Average of
Weighted Aver-
age Prices*
(Dollars)

27.48
27.63
26.33
34.43
34.45
40.29
40.29
54.73
63.99
70.50
84.96
95.16
112.00**
122.00**


* Deflated by the Index of
** Extrapolated values.


Wholesale Prices, 1947-49 = 100.







Agricultural Land Prices in Palm Beach County


TABLE 22.-NUMBER OF DEEDS FILED, VALUE OF REAL ESTATE SOLD IN
CURRENT DOLLARS, AND AVERAGE VALUE OF DEEDS FILED IN CURRENT AND
CONSTANT DOLLARS IN PALM BEACH COUNTY BY YEARS, 1948-1955.


Value of
Real Estate
Sold
(Dollars)

$ 38,240,200
35,534,300
52,815,000
75,257,900
80,503,200
90,489,500
95,237,800
126,123,100


I Average Value
of
Deeds Filed in
Current Dollars
(Dollars)

$4,659
4,495
5,067
6,798
6,640
7,458
7,860
8,617


IAverage Value
of
Deeds Filed in
Constant Dollars
(Dollars*)

$4,463
4,531
4,915
5,922
5,950
6,774
7,126
7,798


* Deflated by the Index of Wholesale Prices, 1947-49 = 100.


Source: Tabulations of the Clerk of the Circuit Court, Palm Beach
County (Mimeo.).


Year



1948 ......
1949 .....
1950 ....-
1951 ......
1952 ......
1953 .....
1954 ......
1955 ......


Number of
Deeds Filed

(Number)

8,207
7,906
10,423
11,070
12,124
12,133
12,117
14,636








72 Florida Agricultural Experiment Stations





TABLE 23.-ACREAGES AND TOTAL CONSIDERATIONS INVOLVED IN LAND
TRANSACTIONS BY SPECIFIED AREAS IN PALM BEACH COUNTY BY YEARS,
1940-1955.

IAcreage Involved in
Year Transaction Total Consideration
(Acres) (Dollars)

Area I


1940 ................................... 1,816 $ 41,500
1941 .................................... 2,317 111,400
1942 ....................... ....- | 6,261 74,000
1943 ............................... 11,693 221,000
1944 ................................... 3,312 44,200
1945 .................................. 5,232 128,000
1946 ............... .................. 718 82,000
1947 ................................ 1,608 70,800
1948 ................................... 1,372 75,200
1949 .................................... 2,759 199,000
1950 .................................... 1,855 219,700
1951 .............................. 3,720 614,300
1952 ................................. 5,014 669,500
1953 ..............-.............. 325 68,900
1954 ....................... ... 2,919 562,800
1955* ................................ 7,258 548,300


Area II


1940 ............................. ... -- $
1941 .................................. 1,588 3,300
1942 -........-...- ... 640 2,600
1943 ............-....... ............ 1,618 2,300
1944 .............. 5,663 28,800
1945 ................................. 5,480 29,800
1946 .................................. 4,771 29,700
1947 ................................ 1,315 20,700
1948 ........................... ... 320 5,000
1949 ...........- .......................
1950 ................................... 17,124 204,800
1951 .................................... 7,152 154,700
1952 ......................... ...... 2,228 71,600
1953 ................... ........... i 2,480 125,600
1954 -............................. 3,787 318,200
1955* ............................. 10,605 1,023,600


* First six months.








Agricultural Land Prices in Palm Beach County


TABLE 23.-Continued.

Acreage Involved in
Transaction
(Acres)


Total Consideration
(Dollars)


Area III


.................. 3,026
........................... 2,249
........... .............. 3,014
........ ................ 3,787
....-..- .......- ..- ... 4,049
.......................... 6,24 1
.....-.-.- .-..- .... 3,034
914
....... ... 91443
-............... ..... 1 ,4 4 3
.....--.... -..-. 1,809
.... 2,495
...-.-.-...... .- .... 1,738
.................. ... 2,876
......-.-...- ........ 4,494
...-..- ... ...... .... ..... 2,966
.......................... 1,322

Totalof Three Areas Combined
Total of Three Areas Combined


1940 ................................
1941 ................
1942 ................ ......-
1943 ............... ... ...
1944 ................ ......
1945 ...............................
1946 ................ .
1947 ................................
1948 ............................. ..
1949 ................................
1950 ...............................
1951 ............... ...--
1952 .................................
1953 ...................................
1954 ..........................
1955* ..................................

First six months.


4,842
6,154
9,915
17,098
13,024
16,953
8,523
3,837
3,135
4,568
21,474
12,610
10,118
7,299
9,672
19,185


Year


1940
1941
1942 .
1943
1944
1945 .
1946
1947 .
1948 .
1949 .
1950 .
1951.
1952 .
1953 .
1954.
1955*


$ 16,000
51,600
21,100
53,800
175,000
112,900
80,700
102,400
32,100
105,100
244.000
123,300
254,800
610,700
541,400
203,600


$ 57,500
166,300
97,700
277,100
248,000
270,700
192,400
193,900
112,300
304,100
668,500
892,300
995,900
805,200
1,422,400
1,775,500






Florida Agricultural Experiment Stations


APPENDIX B

PROCEDURES IN COLLECTING LAND SALE PRICE AND
MORTGAGE DATA AND COMPUTING AVERAGE
PRICES AND VALUES PER ACRE
Representative sections and townships were selected within
the three major sub-areas. Data describing land transactions
and mortgages were taken from the public records for 1940
through the first half of 1955.
One difficulty encountered in selecting sample sections and
townships was the lack of sales activity on many tracts. There-
fore, the tracts were selected both on the basis of representative-
ness, and on the extent of sales activity. In general, the pro-
cedure was to select a representative township and study the
transactions on those sections within that township that had
the most sales activity (see Map 2 for the location of the sample
townships).
Records of sales of as little as six acres were utilized in esti-
mating the value of land in Area I because of the high productiv-
ity of the organic soils. Also the acreage involved in the sales
in the area was generally smaller than in the other two areas.71
Sales involving tracts of 40 acres and more were used in Areas
II and III (except those noted below). It was necessary to elim-
inate sales of less than 40 acres in Areas II and III to avoid in-
cluding urban transactions (particularly in Area III) and also to
compensate somewhat for the wide differences in physical pro-
ductivity that exist between the mineral and organic soils.
Transactions in each area were eliminated when: (1) land
descriptions were too complex to accurately estimate the acre-
age, (2) the value of the stamps cancelled was so small relative
to the acreage involved that inclusion of these sales would greatly
distort the yearly average, (3) the transactions were transfers
within a family and (4) it was evident that the recordings in-
volved such things as changes in the names of corporations, or
where deeds were given to correct other deeds.72

1 This is particularly true of the lands immediately adjacent to Lake
Okeechobee.
72 One example of a sale eliminated from consideration is found in Deed
Book 679, page 452, dated 9-30-43, Public Records, Palm Beach County.
Using the value of stamps cancelled in this transaction ($0.10) would have
given a per acre selling price of $0.05.






Agricultural Land Prices in Palm Beach County


The selling price of land was determined from the amount
of cancelled state stamps on the deeds. These stamps are re-
quired on deeds recorded in Florida in the amount of $0.10 for
every $100 of the total consideration involved in the transaction.
The per-acre price was established by dividing the acreage in-
volved into the total consideration as indicated by the amount
of state stamps cancelled.
Two major difficulties are inherent in the use of this method
to establish the selling price of land.
a. The value of the stamps cancelled on deeds does not al-
ways represent the actual selling price of the land. This value
may include consideration other than land and its improvements.
However, with a large sample over a period of years, these dis-
crepancies tend to average out.
b. There is no practical way to distinguish between trans-
actions involving improved and unimproved land, and lands of
differing qualities. To minimize the influence of capital im-
provements, weighted annual prices were constructed using acre-
age as the weights. This technique also has weaknesses in mak-
ing comparisons over time, in that it tends to overstate increases
in price and value as an increasingly large proportion of the
land becomes improved. However, this technique provides the
best compromise in calculating the average selling price of land.
Price trends were determined by computing a five-year mov-
ing average of the annual weighted average prices.73 It was
necessary to use this method because: (1) there were fluctua-
tions in the weighted average annual prices that could not be
immediately explained, (2) in some years limited acreages were
involved in sales, and thus, the weighted annual price was not a
good estimate of the prevailing market price and (3) in a few
years the transactions were heavily weighted with unimproved
land. Prices for 1954 and 1955 were extrapolated on the basis
of the percentage change in price in the years immediately pre-
ceding.
Over time both the purchasing power of money and the ex-
change relationship between commodities change. Therefore,
it is essential in analyzing price trends to distinguish between
values (the exchange relationship between commodities) and
prices (the exchange relationship between money and goods).

See Table 23 for acreages and total considerations involved in sales
on the sample tracts.






76 Florida Agricultural Experiment Stations

In this analysis the Index of Wholesale Prices (1947-49 = 100)
was used to indicate changes in the purchasing power of money
and values.74
In addition to price data, all mortgage recordings were noted.
The terms of these mortgages were obtained from the Mortgage
Books. These data were used to evaluate the impact of changes
in interest rates, the amount of credit extended and repayment
terms on land prices.

The Index of Wholesale Prices is computed by the Bureau of Labor
Statistics, U. S. Department of Commerce.




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