In the three months to September 30, orchard land outperformed arable cropland, providing both higher returns on investment and price appreciation, according to the National Council of Real Estate Investment Fiduciaries (NCREIF).

 

The NCREIF farmland index, which tracks the price and returns generated by 642 investment farm properties, showed that total returns for farmland investments for the period came in at 2.45%, broken down into 0.96% from land price appreciation and 1.49% income from crop sales. This compares to total returns of 1.45% for the same period a year before and 1.16% for the previous three months.

 

When looking at the past year, total annual farmland returns totaled 12.74%, consisting of income returns of 8.08% and land price appreciation of 4.42%.

 

However, underneath these figures lies a wide disparity between permanent and row cropland.

 

Permanent cropland provided returns of 3.26% over the period compared to returns of 1.80% for row cropland on the back of higher income returns from crop sales. Permanent crop sales brought returns of 2.20% with the balance of returns being attributed to land appreciation, as income from row crop sales provided returns of 0.92%.

 

Over a five year period, permanent cropland saw total returns of 23.98%, beating row cropland returns over the same period of 4.54% by more than five times, largely due to a jump in almond exports and soaring almond prices.