Land ownership is often compared to planting a tree—the best time to start was years ago.
Over the last 30 years, Midwest farmland has averaged an annual rate of return between 10 and 12 percent. That performance reflects a combination of long-term land appreciation and steady cash rent income, working together over time.
Farmland Fact Video
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How Does Farmland Generate Returns?
Farmland returns are typically driven by two primary components: appreciation in land value and annual income generated through cash rent or farm operations.
Unlike assets that rely solely on price growth, farmland can produce income year after year while remaining a tangible, long-term asset.
Why Long-Term Ownership Matters
Over extended time horizons, farmland benefits from:
- Consistent income through cash rent
- Gradual appreciation tied to land scarcity
- Low correlation to traditional financial markets
- Durability as a real, income-producing asset
Together, these factors help explain why farmland performance strengthens when viewed over decades rather than short-term cycles.
Why This Matters to Landowners
Understanding historical farmland returns helps landowners and investors evaluate land ownership as a long-term strategy rather than a short-term decision.
Farmland rewards patience. Owners who hold land over time often benefit from income and appreciation that compound together, creating durable long-term value.
The Bigger Takeaway
Farmland isn’t about timing the market—it’s about time in the market. The long-term performance of Midwest farmland highlights why it continues to play a critical role in land ownership, wealth preservation, and agricultural production.
This post is part of our Farmland Facts series, where we share clear, practical insights that help landowners, buyers, and investors better understand what drives farmland value and land ownership decisions.
