PGIM Real Estate examines how COVID-era disruptions reshaped U.S. agriculture, farmland performance, and pricing dynamics across crop types and regions. Returns weakened meaningfully, yet select crops and export demand showed resilience. The paper suggests structural demand shifts and supply constraints could support pricing, even as income stability and appreciation diverge across farmland categories.
U.S. Agriculture & Timber Market Update
PGIM
Research
35 Pages
Key Takeaways
Farmland Returns Diverged: Total returns fell to 1.27% for permanent cropland and 4.20% for row crops in 2020, marking the weakest performance since 2001.
Demand Shift Impact: Food-at-home spending surged to 66% of total food spend in 2020, materially shifting pricing power toward grocery-linked agricultural products.
Export Driven Pricing: U.S. agricultural exports to China reached $31.5 billion, helping push corn and soybean prices toward 7-year highs amid tight global supply.
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