Cashews rather than corn is the crop to be in for US growers
wanting the best returns, with the land market opening up a divide between
farms growing permanent crops, and those in grain heartlands.
The US farmland market overall ended 2013 on a firm note,
recording 5.0% appreciation in the October-to-December quarter for owners, the
National Council of Real Estate Fiduciaries said.
The total return was 9.2%, including income for a period which
is typically the strongest on this score "due to the sale of the crops and the
revenue sharing that goes with that," the Chicago-based council said.
However, the overall performance disguised a marked divergence,
for a third successive quarter, between farms with permanent and annual crops.
Permanent cropland returned 16.9% in the quarter, the best
performance in eight years - and three times the 5.6% achieved by annual
cropland, the market for which many observers have cautioned is being slowed by
weaker grain prices.
Soybean futures fell 8% last year in Chicago, wheat prices
by 22% and corn futures by 40%.
The divide is reflected geographically too, with the council
naming the best-performing US farmland market as the Pacific West, which
includes California, a major growing state for the likes of pears, peaches,
cherries, blueberries and grapes.
Conversely, land in the southern Plains, a major
wheat-growing area, returned only 2.0% during the quarter, including appreciation
of just 0.8%.
Total returns in the Corn Belt came in at just over 5.0%.
Christopher Jay, the chairman of the council's farmland committee,
said that farmland "continues to have impressive returns".
"This was especially true for permanent crops in the Pacific
West which were led by almond and pistachio properties."