US farmland prices are extending a decline which goes back to 2013, but dropping at a slower rate – however, there is no sign yet of recovery in sales in the farm equipment industry from "anaemic" levels.
A farmland price index compiled by Creighton University came in at a reading of 35.5 for this month, remaining below the 50.0 level which indicates a neutral market.
"This is the 22nd straight month the index has moved below growth neutral," said Ernie Goss, the Creighton economics professor in charge of the index, which is drawn from a survey of lenders in major agricultural states from Wyoming to Illinois.
"On an annualised basis, farmland prices are declining by 6-7%."
Still, the index reading was above the 32.7 recorded for August, and represented a third successive month of recovery from a June low of 31.1.
'Bankers remain pessimistic'
However, the Creighton survey showed sentiment over the farm equipment industry remaining deeply depressed, with a sector index reading unchanged at an "anaemic" 14.2.
"The 2014 and 2015 downturns in farm income continue to reduce sales and production of agriculture equipment dealers and producers across the region," Professor Goss said."Bankers remain pessimistic about the short and intermediate prospects for agriculture equipment dealers and producers."
'Ongoing industry headwinds'
The data follow results last week from Titan Machinery, a major US dealer in Case and New Holland machinery, showing a drop of 35% to $334.2m in the May-to-July period....