Friday, March 21, 2014

Farmland market struggles, despite crop price rebound

From Agrimoney:

The rebound in crop prices has yet to be reflected in a reviving US farmland market, with the decline in real estate values accelerating to its fastest rate since the depths of the world economic crisis.

An index of US farmland values compiled by Creighton University fell to 40.9 last month, the lowest in five years, and well below the 50.0 level indicating a neutral market.

The decline was reflected across the range of areas, from Wyoming, a largely livestock-producing state, to Iowa, the top producer of corn and soybeans.
And it defied a rebound since late January in agricultural commodity prices, whose retreat had been seen as a big driver of the downturn in the farmland market.
Corn and soybean prices have recovered more than 10% since the end of January, with Chicago wheat futures up by one-quarter.
'Very weak sales'
The crop price recovery has also yet to feed through into the farm equipment sector, which showed shrinkage in business for a nine successive month, retreating to its weakest since May 2009.
"Agriculture equipment and implement dealers in the agriculture based areas are experiencing very weak sales to farmers," Creighton economics professor Ernie Goss said, if adding that machinery makers "are experiencing positive growth due to healthy sales abroad"....MORE
Here's Creighton U's Rural Mainstreet and Farmland Price Indices .