Farmland: A Superior Asset Class

Farmland has outperformed most major assets, including commercial real estate, for over 30 years.
Strong Performance

Farmland has demonstrated strong absolute returns over the past several decades. It averaged ~11% total annual returns (income + price appreciation) from 1992 to 2023.

Value of $1000 Investment 1992 - 2023

Data are based on annual total returns from January 1, 1992 through December 31, 2023.

Sources: Privately Held U.S. Farmland - NCREIF Farmland Index; Privately Held U.S. Commercial Real Estate - NCREIF Real Estate Index; Stocks - S&P 500 Total Return Index; Bonds - Bloomberg Barclays U.S. Aggregate Index; Gold - LBMA Precious Metal Prices. Indexes are unmanaged and not available for direct investment.

Hedge Against Inflation

Farmland has historically been one of the strongest inflation hedges. The NCREIF Farmland Index’s Total Return has consistently provided returns more than double the inflation rate since before 1992.

NCREIF Farmland Returns vs. Inflation (% in 1992 - 2023)

Data representative through December 2023.

Sources: NCREIF Farmland Index and the Consumer Price Index - Urban.

The inception date of the NCREIF Farmland Index is Q4 1990. The CPI-U produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services since 1913. NCREIF Farmland Index returns are used for the time frame above to demonstrate income and capital appreciation components, which are not available from the TIAA-CREF Center for Farmland Research database.


As the world’s population grows at an unprecedented rate while farmland acreage continues to shrink, long-term food and water security is a critical concern. To feed our rapidly growing population, farms will need to significantly increase their productivity and efficiency.

Population Growth & Declining Arable Land Per Person

Sources: Food and Agriculture Organization of the United Nations (FAOSTAT)

Institutional Investors

The increasing scarcity of farmland and its lack of correlation with other asset classes make it an exceptionally strong diversification tool for virtually any portfolio. This has driven institutions to significantly increase their investments in farmland over the last 30 years.

Institutional Farmland Investing Growth

Sources: NCREIF Farmland Index - Growth in Market Value and Property Count, 1992 - 2023

Beyond 60/40: Allocating to Alternatives

An allocation to farmland can help reduce overall volatility while improving returns.

  • 100% Traditional Portfolio

    7.91% average annual total returns

    • Bonds 40%
    • Stocks 60%

    Standard Deviation


    Sharpe Ratio

  • Adding Only Farmland

    8.30% average annual total returns

    • Farmland 15%
    • Bonds 34%
    • Stocks 51%

    Standard Deviation


    Sharpe Ratio

  • Adding Farmland & Real Estate

    8.16% average annual total returns

    • Real Estate 10%
    • Farmland 10%
    • Bonds 32%
    • Stocks 48%

    Standard Deviation


    Sharpe Ratio

Data are based on annual total returns from January 1, 1992 through December 31, 2023.

Sources: Farmland Values: NCREIF Farmland Index, Real Estate Values: NCREIF Property Index, Stocks Values: S&P 500 Index, Bonds Values: Bloomberg Barclays US Aggregate Bond Index


  • Introduction to Farmland Investing

    Introduction to Farmland Investing

    In this paper, we seek to provide a general understanding of farmland as an asset class and highlight the various financial characteristics that make it a compelling addition to investors’ portfolios.

  • Is Farmland A Good Investment In a Recession?

    Is Farmland A Good Investment In a Recession?

    In this paper, we look into four US recessions and explore how farmland performed: the Great Financial Crisis in the late 00s, the Dotcom Bubble at the turn of the century, the 1980s Recession, and the COVID-19 pandemic.

  • California: An Agricultural Powerhouse

    California: An Agricultural Powerhouse

    In this paper, we analyze California’s value in the agricultural sector, investigate concerns facing the industry, and explore what is being done today to ensure California’s long-term position as an agricultural powerhouse.

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