NCREIF reports stronger farmland performance in Q4/17

The NCREIF Farmland Index, produced by the National Council of Real Estate Investment Fiduciaries, recorded a strong fourth quarter return of 2.93 percent, up from 1.02 percent in the third quarter and slightly higher than the 2.89 percent return produced in fourth quarter 2016. The Q4/2017 number was comprised of a 2.13 percent income return and appreciation of 0.80 percent.

The trailing four-quarter return for the index was 6.19 percent, compared with 7.09 percent for the year ending fourth quarter 2016. The annual total return was comprised of a 4.61 percent income return and 1.54 percent appreciation.

Permanent cropland significantly outperformed annual cropland in both the fourth quarter and on a four-quarter annual basis. In Q4/2017, permanent cropland posted a total return of 5.23 percent, while annual cropland returned 1.21 percent. Over the trailing year, permanent cropland returned 8.14 percent, compared to 4.75 percent for annual cropland. Since the index’s inception, total returns for these two categories show less of a gap, with annualized returns of 12.36 percent for permanent cropland and 10.44 percent for annual cropland.

Looking at performance on a regional basis, the Pacific West posted the highest return in the fourth quarter at 5.04 percent, followed by Pacific Northwest (2.90 percent), Southern Plains (2.29 percent), Southeast (1.66 percent), Delta States (1.55 percent), Mountain (0.46 percent), Corn Belt (0.33 percent) and Lake States (–2.38 percent).