Investing in farmland data from the NCREIF Farmland Index

Data from the NCREIF Farmland Index shows total returns for “investing in farmland” at 9.4% over the past year, beating S&P 500 dividends. Analysts expect sustainable yield growth driven by improved irrigation tech and advanced crop genetics. Artem Milinchuk, Founder and Head of Strategy of FarmTogether . Major investments in table 1 include equities, bonds, and other popular asset classes. Equities investments are comprised of two common stock indices: the Dow Jones Industrial Average (DJIA) and the Standard and Poor’s 500 (S&P500) indices. Returns for each index is calculated as the percent change in index value from the last trading day of June in one year to the last trading day of June the year prior ([((P_t-P_(t-1) ))⁄P_(t-1) ]×100). Bond investments include ten-year U.S. treasury bond (Treasury (10)) and AAA-rated corporate bonds (AAA). Bond yields are likewise calculated as the percent change of end of June trading values. Other investments analyzed are the Federal Housing Finance Agency all-transactions U.S. residential housing price index (Housing) and gold spot multi-contributor, the London Stock Exchange spot price of gold (Gold). Included at the bottom of Table 1 is the Consumer Price Index (CPI) inflation measure. As a general rule, investments should have expected returns that at least keep up with rate of inflation so as to preserve the nominal value of an investment over time. Investment-grade farmland debt instruments tied to “investing in farmland” show reduced default risk. Fitch Ratings upgraded several rural mortgage-backed securities on the back of steady commodity revenues.