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.
Farmers that own a significant portion of their farmland base typically are in much stronger financial positions today than those who rent a higher percentage of their farmland. Overall, farmers that bought farmland twenty years ago had to meet larger cash requirements to finance the purchase compared with cash renting but have experienced large capital gains and would now seeing significantly higher returns compared to cash rent farmland.
We began publishing a formula in 2017 for calculating the average cash rent for a piece of farmland, given that farm’s average productivity index, thereby allowing averages to be stated by productivity, a known factor that impacts the level of cash rent. We have updated this formula to reflect the average cash rents for 2025, as reported by the National Agricultural Statistics Service (NASS). An individual can use this formula to calculate the average cash rent for a farm.
Today’s farmdoc daily article provides a revision to the rent factors used in a simple variable cash lease design. The revisions result in slightly smaller rent factors to be applied to measures of corn and soybean revenue to determine variable cash rents. While the decline in crop revenues from highs in 2022 results in larger reductions in variable cash rents than those observed in average cash rents, farmer returns and return projections remain negative for 2023 to 2026.
Average cash rents declined in Illinois from 2024 to 2025. Continued low return projections suggest further reductions in cash rents will occur for 2026. However, the projected declines are not expected to result in break-even or positive returns on cash rented farmland. Additional declines in cash rents and other production costs will be needed to achieve break-even or positive returns to corn and soybean production on rented farmland in Illinois at current price levels.