The TIAA Center for Farmland Research provides white papers and briefs on Center related publications and outreach activities highlighting topics of interest to many stakeholders, from farmers to policy makers to investors. In addition to our research program and materials available here, the Center provides financial and other support to farmdoc and a range of economic tools.
White Papers
Performance of Farmland Investment (2025)
This study evaluates the performance of farmland as an investment asset using institutional benchmarks, national data systems, and historical market evidence. Farmland delivers strong long-run returns with notably low volatility, supported by a return structure that blends stable rental income with long-term capital appreciation. Its weak correlation with equity markets and positive relationship with inflation enhance its role as both a diversifying asset and an inflation hedge. Portfolio analysis shows that farmland consistently improves risk-adjusted performance and remains comparatively stable during major financial disruptions. Even as farmland values adjust to changes in interest rates, income outlooks, and credit conditions, the sector’s modest leverage and stable production cycle help absorb short-term market pressures. Overall, the findings highlight farmland as a resilient, inflation-responsive, and efficient component of long-horizon investment portfolios.
The Relationship Between Inflation and Farmland Returns (2025)
This study examines the relationship between inflation and U.S. farmland investment returns amid evolving monetary policy, inflation regimes, and market volatility. Using data from 1970–2024 across 32 major agricultural states and the NCREIF Farmland Index, the analysis compares farmland performance with inflation and other major asset classes over varying holding periods. Findings confirm that farmland returns are positively correlated with inflation and largely uncorrelated or negatively correlated with equities, reinforcing its value as a diversification asset. Although capitalization rates and income yields have declined, farmland has consistently delivered positive real returns across a wide range of economic environments. The correlation between farmland returns and inflation strengthens over longer holding periods, demonstrating its durable inflation-hedging capacity. Despite structural shifts in Federal Reserve policy and macroeconomic conditions, farmland continues to exhibit low volatility, stable appreciation-driven returns, and resilience as a long-term store of value.
Results from August 2026 Ag Economy Barometer highlight that farmland ownership is motivated by more than current financial returns. Family or sentimental reasons were the primary motivation for 45% of respondents, while another 32% identified long-term investment as their main reason for owning farmland. Only 22% selected current income. These motivations are consistent with producers’ broader views of farmland as an asset.
The average farm real estate value for Illinois in 2026 was $9,250 per acre. This includes the value of all land and buildings used for agricultural production. The figure was 3.6% higher than the 2025 average of $8,930 per acre. This is the sixth year in a row of at least a 2.4% increase since 2020. During the last six years, there has been a steadier increase of 2.4% to 3.6 % increase, except for 2022 with a 10.5% increase.
Farmland prices in Illinois increased dramatically between 2020 and 2023. Since 2023, farmland prices have remained stable or declined slightly. At the same time, farmer returns have declined dramatically and…
Obtaining control of land through leasing has a long history in the United States. Leases on agricultural land are strongly influenced by local custom and tradition. However, in most areas,…