<p></p><p>Kern County, California, has been experiencing a farmland boom for a decade now. It has had both positive and negative consequences: attracting investors and bolstering growers’ assets but at the same time it has raised the costs of farmers who rent. Yet, there are now concerns that a drop in nut prices may affect agricultural real estate values.Two Central Valley market observers say a variety of factors are weighing against nut prices lately, including higher interest rates, international trade headwinds and a larger than usual 2015 almond crop.Bakersfield farmland broker Michael Ming said in his 2016 market forecast, released this week, that ag real estate buyers “have begun to pull back” and are now valuing properties based on expectations commodity prices will remain lower “for the foreseeable future.” <br></p> <p>Rabobank’s senior analyst, Senior Vice President Vernon Crowder, said some property sales already under way have been renegotiated because of the recent drop in nut prices.Predictions of generally small valuation declines after several years of accelerating price increases have until recently been based almost entirely on water availability. Demand has been weakest for farmland without ample groundwater access or adequate surface water deliveries.Crowder said some types of cropland have stronger prospects than others because of varying demand for locally grown commodities.Almond prices have recently slipped 20 percent to 30 percent to about $3 per pound for farmers, he said, and walnut prices are down about a third.California table grapes continue to experience strong demand overseas, Crowder said, as do mandarins.Reasons for the changes in nut prices are the strong dollar, which makes U.S. products less affordable for importers. In the case of almonds at least, more acreage dedicated to orchards, combined with improved weather conditions, have increased supply, Crowder said. Foreign competitors are also increasing production, which also cuts into prices.While walnuts are still profitable, prices are likely to fall below their average during the last 10 years, which Crowder said will expand their domestic consumption. But he predicted almond prices are expected to stay above their 10-year average of about $2.50 per pound.<br></p><p></p>