NCREIF US Row Crop Farmland Appreciation up 6.4% in 2023

by: Matt Harrod

US Row Crop Farmland NCREIF quarter on quarter values spiked in Q4 2023 from 0.25% in Q3 to 2.8% in Q4 (blue line in the nearby chart). However the Row Crop Farmland rolling annual appreciation rate (red line) finished the year at 6.4%, down from 10.3% in Q4 2022.

While the year-on-year increase of 6.4% is down from the 2022 peak, it is still well above the ten year average (purple line) and a premium to today’s ten-year bond yield of about 4.5%, the thirty year yield of 4.75% and the 2023 CPI of 3.4%.

The 2024 annual returns outlook is lower but still positive. Lower inflation and commodity prices will reduce farm income and returns, but USDA 2024 projected gross and net farm income returns remain at or above the long term trend (see chart below).

Additionally, farmland investor CAP rates (cash income) finished the year at 3.5%, increasing or remaining steady with the farmland bull market of the last three years. More on that in the next post.

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