NCREIF Farmland Property Index

The NCREIF Farmland Index is a quarterly time series composite return measure of investment performance of a large pool of individual farmland properties acquired in the private market for investment purposes only.

All properties in the Farmland Index have been acquired, at least in part, on behalf of tax-exempt institutional investors - the great majority being pension funds.  As such, all properties are held in a fiduciary environment.


Quarterly Returns

The table below represents total returns for the NCREIF Farmland Index.


The qualifications for property inclusion in the Farmland Index are:

  • Agricultural properties only, including permanent, row and vegetable cropland.
  • Can be wholly owned or in a joint venture structure.
  • Income producing properties only
  • Investment returns are reported on a non-leveraged basis. While there may be properties in the Index that have leverage, returns are reported as if there is no leverage
  • Must be owned/controlled by a qualified tax-exempt institutional investor or its designated agent
  • Property is included in the index beginning in the first full quarter it qualifies (properties are generally excluded in the acquisition quarter)

The composition of the Farmland Index can change over time. The number of properties changes as Data Contributing Members buy and sell properties and new Data Contributing Members are added. Properties exit the Farmland Index when assets are sold or otherwise leave the database. All historical data remains in the database and in the Index. The Index represents investment returns from a single class of investor. As such, the Farmland Index may not be representative of the agricultural investment market as a whole.

Once a property has met all the criteria to be included in the Farmland Index it is only removed if:

  • The property is sold
  • The property is no longer subject to fair market value accounting
  • The property has a change of use to a non-agricultural use

In all cases, the history of the property remains in the Farmland Index.  

The Index is set at 100 starting fourth quarter of 1990. Calculations are based on quarterly returns of individual properties before the deduction of portfolio-level asset or investment management fees, but inclusive of property level management fees. Each property's return is weighted by its market value (value-weighted). Index values are calculated for income, appreciation and total.

Each quarter, the Data Contributing Members submit a market value for each Farmland qualifying property. The value the Data Contributor submits is the value they believe is the property's fair market value as of that particular reporting period - i.e., the end of each calendar quarter.

A change in value from one quarter to another can be for one of several reasons:

  • The property was externally appraised by an independent third party appraiser
  • Observed changes in market conditions as so determined by the manager to recognize any changes during the quarter in rental rates, capitalization rates, interest rates, a partial sale, unexpected capital expenditures, or changes in discount rates.
  • A property value may be adjusted only for capital expenditures made during the quarter - effectively, an accounting adjustment to reflect the amount of the capital expenditure.

The value submitted can be the previous quarter's value because, in the judgment of the manager/owner, the property's value did not change during the period.