For the period 1940 to 1982, the internal rate of return for cash-rented farmland (adjusted for inflation) exceeded the return to common stocks by 1.3 percent. Given prospects for greater mobility of investment funds between the farm and nonfarm sectors, future returns to cash rented farmland should more closely match returns to common stocks. However, consistent with past relationships, a greater proportion of the total returns to farmland is likely to come from increases in asset value, and a smaller proportion from current income, relative to common stocks. These historical and prospective relationships are interpreted in light of concerns the'U.S. farmland is "underpriced" relative to other less durable assets in international markets. The extent and significance of such underpricing depends on the ability of the U.S. economy to maintain an adequate level of national investment.