What explains farmland returns: broad market exposure or something more specific?
This paper examines Veripath Partners’ quarterly gross returns from Q2 2008 through Q1 2026 using a 14-factor attribution framework across macroeconomic variables, agricultural inputs, real estate, currency, and equity style factors.
The analysis found that only the Canadian yield curve term premium demonstrated a statistically significant relationship with farmland returns. Other tested factors including Canadian equities, inflation, commodity prices, fertilizer costs, REITs, and Fama-French equity premia showed limited explanatory power over the sample period.
In the full 14-factor model, the study estimated 13.41% annualized alpha, suggesting that most observed returns in the dataset were not explained by the factor set tested.
The paper explores what this may mean for portfolio construction, diversification, and evaluating farmland as a distinct real asset exposure within institutional portfolios.