Research - JANUARY 21, 2014

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Farmland posts strong returns

by Andrea Waitrovich

Investment in farmland had a 9.26 percent return during fourth quarter 2013, above third quarter’s 2.94 percent total return, according to the NCREIF Farmland Index. The total return comprised 5.02 percent appreciation and 4.24 percent income return. However, the fourth quarter 2013 return was below fourth quarter 2012’s 9.56 percent total return.

The fourth quarter typically has the highest income and total return due to conclusion of the sale of the crops and the revenue sharing that goes with that. The average total return over the history of the index is 2.89 percent, while the fourth quarter average is 6.08 percent. Excluding 2012, this past quarter’s total return was the highest quarterly return since fourth quarter 2006.

The trailing four-quarter total return dropped slightly from 21.25 percent to 20.91 percent. That is the second highest total return over a four-quarter period since fourth quarter 2006. The split on the trailing four-

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