Farmland Investment Returns: Income, Values and Risk

US farmland investment returns were close to flat in 2025: the NCREIF Farmland Index posted a total return of +0.20%, made of +3.05% income and -2.80% appreciation, according to a summary of the NCREIF 4Q 2025 report. Over the longer record the picture is stronger, with a 20-year annualized total return of 9.57%. Meanwhile USDA says the average acre of US cropland was worth $6,020 in 2026, up 3.3% from a year earlier.

This guide splits the return into its two parts, shows the latest USDA land values and cash rents, compares strategies and risks, and gives you a calculator to test your own parcel. All figures carry their date and source. This page is general information, not investment or financial advice: get advice from a licensed adviser and a local land appraiser before you buy.

How Farmland Investment Returns Work

Every farmland return has the same two parts. The NCREIF Farmland Property Index reports both of them every quarter for a large pool of farms held by institutional investors.

• Income return. This is cash rent from a tenant, or net operating income if you farm the land yourself. It is the steady part. In 2025 it was +3.05% for total farmland, +2.99% for annual cropland and +3.24% for permanent crops such as orchards and vineyards (NCREIF 4Q 2025, as summarized by FarmTogether).
• Appreciation (capital) return. This is the change in the appraised value of the land. It is the part that moves around. In 2025 it was -2.80% for total farmland, +0.52% for annual cropland and -8.48% for permanent cropland.

The two parts do not always move together. In 2025 rents held up, while appraised values of orchards and vineyards fell after higher interest rates raised the discount rates that appraisers use. Row-crop land behaved very differently: annual cropland returned +3.52% in total, while permanent cropland returned -5.43% and had its second negative year in a row.

Keep one more point in mind. The NCREIF index is based on appraisals, not daily trading. An independent analysis of the NCREIF data notes that this “appraisal smoothing” makes swings look smaller than they would if land were priced every day. It puts farmland’s annual variability at around 6-7%, against roughly 16-18% for the S&P 500.

Income, appreciation and total return in one year

The chart below shows the three results side by side for 2025. The gap between annual and permanent cropland is the main story of that year.

Chart

NCREIF farmland returns, 2025

Percent, calendar year 2025, by index and return part

USDA Land Values and Cash Rents

USDA’s National Agricultural Statistics Service (NASS) publishes its Land Values Summary each summer. The USDA NASS Land Values 2026 Summary (July 2026) reports these national averages:

• US farm real estate (all land and buildings): $4,500 an acre, up $150 or 3.4% from 2025.
• Cropland: $6,020 an acre, up $190 or 3.3%.
• Pastureland: $2,000 an acre, up $80 or 4.2%.

The previous edition, the USDA NASS Land Values 2025 Summary, had farm real estate at $4,350, cropland at $5,830 and pasture at $1,920. So values kept rising in 2026, but more slowly than in 2025 (when cropland rose 4.7%).

The American Farm Bureau Federation’s review of the 2026 release (4 August 2026) adds context. It counts 2026 as the sixth annual rise in a row and says average farm real estate values have climbed nearly 44% since 2020.

Land values by category over five years

The line chart shows the three national series from 2022 to 2026. Pasture is far cheaper per acre, but it rose by a larger share in 2026. Local markets differ a lot from these averages. In places with heavy non-farm demand, such as the urban fringe of farmland in New York, values can move apart from the state figure. Treat the national number as a starting point to check your county against, not as a price for any one farm.

Chart

US average land values per acre

US$ per acre, national averages, 2022-2026

Farm Real Estate Values by State

Appreciation, the volatile half of the return, differs by state. These are 2026 average farm real estate values (land and buildings) from the USDA NASS Land Values 2026 Summary.

The fastest risers in one year are not always the priciest states. In 2026 Tennessee (+5.7%) and Florida (+5.2%) beat Iowa (+3.2%) and Illinois (+3.6%). Over a longer window the Plains stand out: Farm Bureau notes that since 2020 farm real estate values rose 76% in Kansas, 65% in Nebraska and 61% in South Dakota, from lower starting prices.

A cheaper acre with a higher rent-to-value ratio can earn a better income yield than a prime acre. Compare both halves of the return for any state you look at, and check county data, because a state average mixes very different soils.

Cash rent and income yield

The income half comes from cash rent. Farm Bureau’s summary of the 2026 USDA estimates puts average cropland rent at $160 an acre, down $1 from 2025 and 15% above 2020. Irrigated cropland rent held at $244, non-irrigated cropland fell $1 to $146, and pasture rent rose $1 to a record $16.50 an acre. Rents move much more slowly than land values.

Divide rent by land value to get the gross cash yield before costs and appreciation:

• US cropland, 2026: $160 ÷ $6,020 = 2.66%.
• US pasture, 2026: $16.50 ÷ $2,000 = 0.83%.
• Illinois cropland, 2026: $261 ÷ $10,200 = 2.56%, using the Illinois rent reported in farmdoc daily’s review of 2026 Illinois cash rents (University of Illinois, September 2026) and USDA’s Illinois cropland value.

These are gross yields. The owner still pays property tax, insurance and upkeep, so the net yield is lower. farmdoc daily also reports that Illinois rents slipped from $269 in 2024 to $264 in 2025 and $261 in 2026, as tight margins pushed down on rents. USDA publishes county-level cash rent estimates if you need a figure for one county.

Farmland Total Return Calculator

Use the calculator below with your own price, rent and costs. It shows the gross yield, the net income return, the total return with your appreciation guess, and the cash flow after interest if you borrow part of the price.

Chart

Change in farm real estate value, 2025 to 2026

Percent change, selected states and US average

Try the numbers for your own farm below.

The NCREIF Farmland Index Over the Long Run

One flat year looks weak until you set it against the full record. A review by Peoples Company of 33 years of NCREIF farmland returns found an average total return of 10.29% a year, with a standard deviation of 6.74%. Over the same span the Dow Jones index averaged slightly more than 8% a year with a standard deviation of 14%. The lowest yearly return in that review, measured at each third-quarter end, was +2% for farmland and -41.3% for the Dow.

The 20-year annualized figures from the 4Q 2025 report are a little lower: 9.57% for total farmland, 9.52% for annual cropland and 9.37% for permanent cropland. The longer average includes the strong years of the 1990s and the 2000s land boom, so the exact number depends on the window you pick.

The practical read is simple. Income has stayed positive, so a weak appreciation year still tends to leave a flat or small positive total, which is what happened in 2025. For the latest quarter, NCREIF publishes its data at user.ncreif.org. Older years and a deeper look at returns are covered in our guide to historical returns of farmland investing.

Canadian farmland for comparison

Readers in Canada can use Farm Credit Canada’s survey of transactions. The FCC Farmland Values Report found that cultivated farmland values rose 9.3% on average across Canada in 2025, against a 10-year national average of 8.6%. Manitoba (+12.2%), Alberta (+11.4%) and Saskatchewan (+9.4%) led, while British Columbia fell 1.7%. These are value changes from reported sales, not total returns, so they are not directly comparable with NCREIF.

Key Drivers Behind Farmland Returns

Farm profitability. What a tenant earns sets what a tenant can pay. In its 2026 forecast, the USDA Economic Research Service farm income forecast puts 2026 net cash farm income at $176.4 billion, up 0.4% from 2025 before inflation. After inflation it is down 2.5%, though still above the 2006-25 average. Average net cash farm income per farm business is forecast up 7.1% to $121,700.

Chart

Farm real estate value per acre, 2022 vs 2026

US$ per acre, selected states

Technology on the farm. Variable-rate inputs, soil-moisture sensors and satellite crop maps can raise yield or cut waste on the same acre, which supports rent over time. Our overview of agri-technology and food-tech adoption covers the main tools.

Scarcity and non-farm demand. Housing, solar and wind leases and other uses compete for land in some counties. Farm Bureau points to development, energy and other competing uses as added pressure in many local markets. This is one reason state changes range from +1.4% (New Mexico and Connecticut) to +5.7% (Tennessee) in the 2026 USDA data.

Interest rates. Many purchases use a mortgage. If the loan rate is above the net rent yield, a used buyer loses cash each year and relies on appreciation to come out ahead. The 2025 NCREIF results show the other side: higher rates also lowered appraised values of orchards and vineyards.

Crop type. Annual row-crop land and permanent crops behaved very differently in 2025. Permanent crops need years to come into full production, so a supply glut or a price drop can last several seasons.

▶ Six plain steps to start precision farming, from field maps to satellite monitoring. · 4:18

Strategies That Shape Farmland Investment Returns

None of these strategies change the USDA or NCREIF averages. They change which part of the return you capture and how much risk you carry. For a look at approaches built around inflation, see our guide to farmland strategies built to beat inflation.

1. Direct ownership with an active lease

Best for: investors with enough capital for a whole parcel who want both halves of the return.

You buy the land and lease it to a skilled operator. You keep the full rent and all of the appreciation, with no fund fees. The trade-off is that all your money sits in one place, and selling can take months. Owners who live far from the land need a way to check crop condition without frequent trips; satellite field maps are one option.

2. Raising yield per acre

Best for: owner-operators and landlords on crop-share or flexible leases.

Income is the steady half of the return. Better input timing, scouting and drainage can raise the operator’s net income per acre, and over time that supports a higher rent. Our piece on agricultural land investment approaches covers more tactics on the land itself.

3. Specialty and permanent crops

Best for: investors who accept long cycles and can hold through a downturn.

Orchards, vineyards and nut crops earned higher income in 2025 (+3.24%) than annual cropland, but their appraised values fell 8.48%. Over 20 years their annualized return (9.37%) was close to row crops. Traceability records can help growers reach buyers who pay for verified sourcing; see product traceability.

4. Infrastructure that lifts rent

Best for: owners in dry regions or with good water rights.

Irrigated cropland rented for $244 an acre in 2026, against $146 for non-irrigated land, a gap of $98 (USDA via Farm Bureau). Wells, pivots, storage and drainage can justify higher rent, but they cost money and depend on water rules. Our page on fleet management covers running machinery across several sites.

5. Farmland REITs and funds

Best for: smaller investors who want a low entry point and the option to sell quickly.

Publicly traded farmland REITs can be bought with one share and no accreditation. Their prices move daily with the stock market, so they can swing more than the appraisal-based NCREIF index. Our list of US farmland REITs names the listed vehicles. Check each company’s investor-relations page for its current dividend yield, since it changes with the share price.

6. Carbon and conservation income

Best for: landowners willing to sign long contracts and change practices.

Tree planting, cover crops and reduced tillage can add income through voluntary carbon programmes or conservation payments. Prices and verification rules vary by programme, so read each contract closely and get legal advice. Measurement tools such as carbon footprint tracking help document what changed.

7. Lease structure

Best for: every owner who rents land out.

A fixed cash rent locks in income whatever the harvest. A crop-share or a bonus tied to yield or price gives the owner more upside and more risk. Farm Credit Canada describes crop sharing as one alternative to high-priced farmland. Have a lawyer review any lease and follow your state or provincial rules.

▶ A walk-through of the Farmonaut web app: drawing fields and reading satellite crop-health maps. · 8:43

Comparing Ways to Invest

Farmland Investment for High-Net-Worth and Accredited Investors

High-net-worth buyers reach farmland through three doors. The first is a large direct purchase; no accreditation is needed, but you carry the full weather and price risk of one region. The second is a public REIT, open to anyone with a brokerage account. The third is a private farmland fund; most of these are offered only to accredited investors, though some offerings under other SEC exemptions accept non-accredited investors.

Under US rules, an individual can qualify on income or net worth. Per the SEC’s Investor.gov accredited-investor bulletin, the tests are earned income over $200,000 (or $300,000 with a spouse) in each of the last two years, or net worth over $1 million, alone or with a spouse, not counting a primary residence. Some licence holders also qualify.

Minimums are set by each sponsor, not by law, and they change. Check the offering documents of any platform, such as AcreTrader, for its current minimum, fees and lock-up before you commit. Outside the US, rules differ; ask a licensed adviser in your country.

Risks That Lower Farmland Investment Returns

• Weather and yield. Drought, flood or hail cut the tenant’s crop and can strain rent payments. Crop insurance protects the operator and, indirectly, the owner’s income; see our page on crop loan and insurance.
• Commodity prices. A run of low grain prices limits what tenants can pay. Illinois rents fell for two years in a row to 2026 as margins tightened (farmdoc daily).
• Falling values. NCREIF appreciation for total farmland was -2.80% in 2025, and permanent cropland lost 8.48% in value, even while the USDA national average kept rising.
• Interest rates. Higher rates raise borrowing costs and can lower appraised values.
• Rules and taxes. Zoning, water rights, property tax and foreign-ownership rules vary by state and province. Get local legal and tax advice.
• Liquidity. A direct purchase or a private fund can take months or years to exit. Listed REITs trade daily but carry stock-market swings.

Using Satellite Data to Watch Your Acres

An owner who lives far from the land often sees the crop only at harvest. Satellite vegetation maps let you check field condition through the season and spot problem areas early enough to ask the operator about them. The Farmonaut Satellite + AI Farm Monitoring System shows crop-health maps for fields you draw, on the web app, Android and iOS. A map shows where plants are stressed; a field visit tells you why.

Managers of larger portfolios can pull satellite and weather data into their own systems through the API and developer documentation or the API sign-up page, and multi-site teams can look at the admin app for large farms. Plans are listed on our home page, and app downloads are also available through this link.

▶ How satellite NDVI maps show crop stress across a large farm before it is easy to see on foot. · 4:09

FAQ

What is a good return on farmland?

The NCREIF Farmland Index returned 9.57% a year over the 20 years to 2025, and about 10.29% a year over 33 years in the Peoples Company review. Single years vary: total farmland returned +0.20% in 2025. Judge a farm against the long-run record and against your own cost of money.

What yield does renting out farmland give?

On 2026 USDA averages, cropland rent of $160 an acre on land worth $6,020 gives a gross yield of 2.66%. Pasture gives 0.83% ($16.50 on $2,000). Subtract property tax, insurance and upkeep for the net yield, then add your view of appreciation for a total return.

Why did NCREIF farmland returns fall?

Income stayed positive at +3.05%, but appraised values fell 2.80%. The biggest fall was in permanent crops such as orchards and vineyards, whose values fell 8.48% after higher interest rates and oversupply in some crops. Annual cropland still returned +3.52%.

Can I invest in farmland without buying a farm?

Yes. Listed farmland REITs need no accreditation. Most private funds are open only to SEC-accredited investors: income over $200,000 ($300,000 joint) in each of the last two years, or net worth over $1 million not counting your home. Each sponsor sets its own minimum.

Where can I find farmland data for my state or county?

USDA NASS publishes state land values each summer and county cash rents on a regular schedule. NCREIF publishes its index each quarter. In Canada, Farm Credit Canada publishes provincial farmland values each year. Each source is linked above where its figures appear.

What Would Change the Outlook

The case for farmland rests on a pattern, not one year: an income return near 3%, an appreciation return that can go negative, and a long-run average near 10% that recent years fell short of. Watch three things: the next USDA Land Values Summary, the next NCREIF quarter and the ERS farm income forecast. A long run of negative appreciation, or a lasting fall in farm income that pushes rents down, would weaken the case. Careful data-driven management, as discussed in our note on asset management innovations, does not change the market return, but it can reduce the size of the mistakes you make on your own land.

Related pages on our site: farmland return history · listed farmland REITs · satellite crop monitoring.