Research Papers & Briefs

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.