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Farmland, timberland continue slow pace

by Reg Clodfelter

Both farmland and timberland continued their meager pace during second quarter 2016, as the NCREIF Farmland Index and NCREIF Timberland Index posted returns of 1.25 percent and 1.09 percent, respectively. Farmland’s second quarter return, which was split almost in half between appreciation and income, was down 13 basis points from its first quarter performance and well below the 20-year average quarterly return of 3.06 percent. A sizable gap has opened up between permanent and annual cropland, with permanent cropland returning 14.74 percent over the past year, compared with 5.55 percent for annual cropland. NCREIF pointed to quarterly depreciation of annual cropland as the driving force. Historically, the difference in annual return between the two is only 170 basis points. Farmland in the Pacific Northwest had by far the best performance among regions, returning 16.55 percent, while only two of the other seven regions even reached double-digit

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