The NCREIF Farmland Price Index for the first quarter of 2013 was 5.44 percent, including 4.42 percent appreciation and 1.02 percent income return. The National Council of Real Estate Investment Fiduciaries reports that this is the highest first-quarter index since the index was started in 1991. The next nearest return in any prior first quarter was back in 2006 when the index was 4.02 percent. During the first quarter of last year, the total return posted in the index was 3.78 percent.


In a statement released this week, the NCREIF also said the trailing four-quarter total return total is 20.47 percent, which is the highest it has been since the fourth quarter of 2006 when it was 21.15 percent. The four-quarter rolling return from one year ago was just 16.73 percent.

The organization said the trend of permanent cropland and annual cropland outperforming each other in alternating quarters continued. In the first three months of the year, annual cropland posted a 6.82 percent total return, while permanent cropland posted a 2.78 percent return during the quarter. Over the last six years, annual cropland has continued to outperform permanent cropland during the first quarter. Permanent cropland hasn’t bested annual in the first quarter since 2007.

According to the NCREIF, the Mountain region posted the highest performance during the first quarter, with 14.58 percent. It surpassed all the other regions by 500 or more basis points. Most of that return (13.37 percent) was appreciation. The Pacific Northwest ranked after the Mountain region, posting a return of 8.05 percent.

The lowest performing regions were the Corn Belt, with a 3.07 percent total return, and the Southeast, with a 3.95 percent total return. The Corn Belt was last quarter’s highest performer, although the Southeast and also the Southern Plains have both been struggling.

H/T Pensions & Investments