Research - JULY 22, 2015

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Farmland total returns down in second quarter 2015

by Zoë Wolff

Second quarter 2015 total returns for farmland were 1.16 percent, down from 2.08 percent the previous quarter, according to the results of the NCREIF Farmland Index. Total returns for the quarter comprised 0.53 percent appreciation and 0.64 percent income return.

Total annual farmland returns were 11.65 percent for the 12-month period ending in second quarter, driven by a strong income return of 7.53 percent and appreciation of 3.93 percent. In the past 10 years, total annual returns dropped steadily from their peak just above 35 percent in 2005 to approximately 5 percent in 2010, gradually making their way upward until 2013. This quarter had the lowest returns since 2010.

Permanent cropland outperformed annual cropland for the third consecutive quarter, with returns of 1.27 percent made of 0.96 percent appreciation and 0.31 percent income returns. Annual cropland returned 1.08 percent in the second quarter comprised of 0.20 percent appreciation and 89 percent

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