April 29, 2015

The National Council of Real Estate Investment Fiduciaries (NCREIF) Farmland Index which consists of 603 investment grade farm properties, including 393 row crop properties and 210 permanent crop properties, posted total returns for both permanent and row cropland for the first quarter of 2015 of 2.08% – comprised of 1.26% returns on appreciation, and 0.82% returns on income.

Permanent cropland generated 3.64% returns for the period, marking the segment’s highest first quarter performance since 2006, while row crops returned less than 1%.

Total full-year returns of 12.24% were regarded as strong. “There continues to be strong interest in many markets for high-quality farmland from both institutional investors as well as local farmers on property that comes up for sale.” Bill Frisbie, chairman of the Farmland Index committee, and managing director of Gladstone Land tells ValueWalk.

Boosted by the performance of permanent crops in the region which retuned 4.43% in the first quarter, the Pacific West was the best performing region when comparing returns by geographic location.  The U.S. Pacific West posted total returns of 3.77% including 3.11% from appreciation, and 0.66% income.  The second best performing U.S. region according to the Index was the Mountain region with total returns of 2.40%.

The Pacific Northwest and the Lake States both posted negative returns with the Pacific Northwest region being the worst performing region in the country with total returns of – 0.65%.

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