Foreign Investment in U.S. Cropland: Some Evidence on the Role of Exchange Rates, Interest Rates, and Returns on Cropland

This paper empirically examines the role of exchange rates, cropland returns, and the real interest rate as determinants of foreign investment in U.S. cropland. Investments from the top six countries of origin were analyzed. Investments from Mexico were also examined because of that country's close physical proximity to the United States. The evidence presented suggests that foreign investment in U.S. cropland is negatively related to the value of the dollar and the level of U.S. real interest rates, and positively related to returns on U.S. cropland.