NCREIF Farmland Index in 2021 generates total returns of 7.83%, its highest since 2016; annual cropland category posts annual returns of 11.06%, and with a market value of US$8.38B annual cropland sub-index accounts for 61% of NFI’s total market value

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CHICAGO , January 27, 2022 (press release) –

NCREIF Farmland Index posted the Highest Total Returns in Over 5 years.

The National Council of Real Estate Investment Fiduciaries (“NCREIF”) released the fourth quarter and 2021 full year results for the NCREIF Farmland Index (“NFI”). The NFI ended 2021 with 1,260 properties and a new record market value of $13.8 billion.  At the end of 2021, the total market value of the annual cropland sub-index was $8.38 billion accounting for 61% of the NFI’s total market value while the remaining $5.40 billion was in permanent cropland. In addition, 76% of the 1,260 properties in the index were in annual cropland and 24% in permanent cropland.  The value of the index continues to be weighted to the Pacific West (40%) followed by the Delta States (19%) and the Corn Belt Region (11%).

Total Farmland Returns

In 2021, the NFI generated total returns of 7.83%, consisting of 3.95% income and 3.79% appreciation returns. Total returns were 375 basis points higher than the prior year and the highest total returns for the index since 2016.  Strong annual returns were mostly driven by the improved performance in the annual cropland subindex which posted double digit returns of 11.06% compared to the permanent crop subindex at 3.06%.

Rolling 4-Quarter Total Returns

Annual Cropland Subindex

The annual cropland category posted total annual returns of 11.06% exceeding the permanent cropland returns by 800 basis points.  While income returns for this subindex were slightly higher in 2021 at 3.62% compared to the 3.39% in the prior calendar year, annual appreciation returns jumped to 7.25% - the highest level since 2013. Most regions experienced the strongest total returns over the past 5 years as higher commodity prices (i.e. corn and soybeans) pushed land valuations higher for many properties in this subindex. 

  • From a regional standpoint, total returns in 2021 ranged from a high of 18.77% to a low of 5.52%. The highest total returns were observed in the Corn Belt Region at 18.77% followed by the Pacific Northwest (17.82%), Lake States (15.16%), and Delta States (10.21%).  Appreciation returns accounted for the majority of the total return performance.  The lowest return was observed in the Mountain Region at 5.52%.
  • Total income returns in 2021 ranged from 4.29% in the Pacific Northwest to 3.27% in the Delta Region. Income returns for this subindex have been stable during the past 10 years.
  • Total appreciation returnsin 2021 ranged from a high of 15.01% in the Corn Belt region to a low of 1.28% in the Southeast Region. Appreciation returns were positive in every region of this sub-index in 2021.

Rolling 4-Quarter Annual Cropland Returns

Permanent Cropland Subindex

The permanent cropland sub-index posted total annual returns of 3.06% in 2021 comprised of positive income returns of 4.43% but negative appreciation returns of -1.32%.  While this total return is over two times higher than the total return generated in the prior year, permanent cropland continues to lag the double digit average annualized returns observed in the past 10 years (12.17%) and 20 years (14.42%). 

Rolling 4-Quarter Permanent Cropland Returns

From a commodity standpoint, pistachio properties posted the highest total returns in 2021 at 9.39% as well as both the highest income (6.46%) and appreciation returns (2.78%) compared to other permanent crops.  On the other hand, almonds generated negative returns (-4.44%) for the second consecutive year driven mainly by negative appreciation returns of -8.07%. Other permanent crops had positive total returns for the year including winegrapes (4.22%), apples (1.11%), citrus (0.61%) as outlined below.

The NCREIF Farmland Index includes data provided by the following firms: Prudential Agricultural Investments, Hancock Agricultural Investments, Westchester Group Investment Management, UBS Farmland Investors LLC, Gladstone Land Corporation, US Agriculture, Cottonwood Ag Management, and Farmland Opportunity.

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Dan Rivard
- VP Market Development -

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