"Reversal in US farmland prices gathers pace"

From Agrimoney:

The reversal in US farmland prices gathered pace, with the market showing its worst performance for more than three years, undermined by weakness in agricultural commodities.

Farmland prices, which declined in December for the first time since 2009, extended their pace of decline this month, Creighton University said, after a survey of lenders in leading agricultural states from North Dakota to Illinois.

A price index "plunged" to 43.8, below the 50.0 level indicating a neutral market, and last month's 47.0 figure, and representing the lowest reading since October 2009.

Crop price drag

The decline reflects the reversal in crop prices, which saw Chicago wheat futures fall 22% last year and corn futures tumble 40%.

"As agriculture commodity prices have moved lower, so have farmland prices," Creighton economics professor Ernie Goss said.

The weakness had spread to the farm equipment market too, which recorded an index figure of 41.0, also the weakest since October 2009.

The fall in crop prices "has significantly reduced farmers' willingness to undertake major agriculture equipment purchases"....MORE