An index that pension funds use reflects stabilization in farmland values across the nation, but it still shows weakness in Midwestern values.
The Farmland Index, updated quarterly by the National Council of Real Estate Investment Fiduciaries (NCREIF), shows the total return on farmland for the second quarter of 2017 was 1.63%. That’s up from a return of 0.49% in the first quarter and up from 1.25% in the second quarter of 2016. The quarterly return consisted of a 0.57% income return and 1.06% appreciation.
Although agricultural prices remain under pressure, the farmland income return managed modest gains in the first half of 2017, at about 0.5% per quarter, similar to the income returns in the first half of 2016, NCREIF reports. Farmland appreciation had its best performance since the fourth quarter of 2015 after slight depreciation last quarter.
The trailing annual total farmland return was 6.55% through the second quarter of 2017, compared to 9.68% for the year ending in the second quarter of 2016. The annual total return included a 5.18% income return and 1.32% appreciation.
Source: www.agprofessional.com