APRIL 22, 2014

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Farmland returns slow in first quarter

by Larry Gray

Investments in agriculture properties continue to perform well, backed by strong demand for U.S. farm products, especially in the export market. However, the performance of farmland investments in first quarter 2014 dropped off from recent quarters, according to the NCREIF Farmland Index. The index registered a total return of 2.41 percent for the first three months of the year, composed of a 1.53 percent appreciation component and a 0.88 percent income return. The first quarter figure was significantly off the first quarter 2013 return of 5.44 percent. In addition, it was down from fourth quarter 2013’s total return of 9.26 percent.

NCREIF notes that first quarter returns typically decline from the fourth quarter due to the conclusion of the sale of crops and the related revenue sharing.

Despite the slowdown in performance, farmland continued to produce strong returns compared with other assets.

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