Farmland investments may return an average of 8 percent to 12 percent annually as global food demand increases, said the largest U.S. pension manager for teachers and academic researchers with $469 billion of assets. The pension manager buys land and leases it back to farmers, The company has $2.5 billion invested in farmland and owns about 600,000 hectares (1.48 million acres) mostly in the U.S., Brazil and Australia. Returns in the past few years have been at the high end of the 8 percent to 12 percent range.
Farmland values in one of the most-productive regions in the U.S. Midwest soared 17 percent in the second quarter as higher grain prices made real estate more attractive
Shrinking land and water supply in countries including China and India, will limit their capacity to boost food production, creating import demand. That’s going to be met by the major exporting regions in North and South America, Australia, and parts of Central and Eastern Europe.