Following the release of its third quarter 2018 results for the NCREIF Farmland Index, the National Council of Real Estate Investment Fiduciaries (NCREIF) will be conducting its first quarterly webinar on Tuesday, November 13 at 2pm CST.
Briefly, for the third quarter 2018, total return was 1.29 percent, compared to 1.13 percent the previous quarter, and 1.02 percent for the third quarter of 2017. Total third quarter returns were comprised of income return of 1.06 percent, and appreciation of 0.22 percent, compared to registered appreciation of 0.48 percent for Q2.
Permanent cropland saw positive returns of 1.32 percent for the quarter, compared to returns of 1.26 percent for annual cropland. Broken down, permanent cropland saw income returns of 1.41 percent, however, appreciation posted negative 0.09 percent.
But what do these numbers reflect? What are the driving forces behind these results? Two questions, that when answered, can give agricultural investors unparalleled insight into the forces at work, and give direction to investment decisions.
This new recurring webinar series launched by NCREIF plans to serve in that exact capacity, Anatole Pevnev, managing director, US Agriculture, told GAI News.
On November 13, Anatole Prevnev, managing director, US Agriculture, and Bruce Sherrick, professor and director at the TIAA-CREF Center for Farmland Research at the University of Illinois, will explain and discuss the factors behind the index results, such as current market conditions, the impact of current tariffs on U.S. farming, and trade conditions for U.S. farmers and their expected impact in the near-to-mid term.
The NCREIF Farmland Index currently consists of 851 investment-grade farm properties with a total value of $9.4 billion, up from a total of 699 with a total of $8.1 billion last year. Within this total are 609 annual cropland properties and 242 permanent farmland operations. Geographically, 229 are in the Corn Belt, 229 are in the Pacific West, 124 are in the Delta region, 72 are in the Mountain States, 57 in the Pacific Northwest, 48 in the Southeast, 42 in the Lake States, and 21 in the Southern Plains.
“The index is hitting critical mass, and there exists significant investor interest in the asset class,” said Pevnev, explaining the importance of understanding the drivers behind the quarterly results. “The quarterly report can’t really explain what is behind the numbers. What is happening on the farm level, national level, international level, to result in that data?”
Since its inception in 1995, the NCREIF has been a cornerstone on which the growth of agriculture as a solid asset class has been built, and the addition of quarterly, interactive webinars will strengthen its role as a source for institutional investors in the space.
Each quarterly webinar will rotate in speakers to offer rounded-out and contrasting views on the market, and those participating are able to submit specific questions to be addressed. All interested in joining NCREIF in their first quarterly webinar can register here.
-Lynda Kiernan
Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com
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