Research - JULY 23, 2014

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Returns from farmland lower in Q2

by Loretta Clodfelter

Farmland returns in the second quarter, at 1.73 percent, were the lowest since 2011, according to the NCREIF Farmland Index. The total return comprised appreciation of 0.78 percent and income of 0.95 percent.

"Both the income and appreciation returns for the Farmland Index in second quarter were lower than the second quarter returns from a year ago,” comments Christopher Jay, chairman of the NCREIF Farmland Committee and director of financial analysis with Prudential Agricultural Investments, in a statement.

In second quarter 2013 the index had a total return of 1.97 percent.

The rolling four-quarter return also declined, falling to 17.17 percent. However, notes Jay, “There continues to be strong interest from institutional investors as well as local farmers on property that comes up for sale.”

The worst performing region, at –1.18 percent,

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