From Agrimoney:
US farmland prices extended their decline nearly to four years, amid growing strain on farm incomes, a lender survey showed - but the ag equipment market showed signs of slowing its shrinkage.
A US farmland price index compiled by Creighton University showed a reading of 39.6 for September, a 46th month below the 50.0 level which indicates a neutral market.
The figure represented a retreat from the 43.0-point level recorded for August, a three-year high, if continuing the successive monthly record of shrinkage which began in December 2013.
And it came amid evidence of stressed producer finances, with 51% of bankers answering the survey reporting have restructured farm loans, although default levels remained low.
'Still have some cash'
The data contrast with an improved picture on prices in Iowa, at least, revealed last week by a report from the state's chapter of the Realtors Land Institute.
The briefing showed an accelerating recovery in farmland prices in Iowa, the top corn-growing state, showing values rising by 2.0% in the past six months, after a 0.9% rise in the previous half year.
The chapter flagged support to values from the limited supply of land available to buy, adding that many farmers "still have some cash on hand", but acknowledged the headwinds to the market from "continued lower commodity prices" at a time of relatively "high costs" of inputs such as agrichemicals.
The Creighton survey showed an index reading of 39.9 for Iowa this month, below the 50.0 neutral level, and the figure of 42.3 recorded for the state for August.
Past the worst?
However, the Creighton data offered some hope for machinery groups, in giving a reading of 27.4 for sector sales this month....MORE
From the intro to Sept. 8's "
In Non-Hurricane Irma News: "Diammonium Phosphate Prices Moved Sideways Last Week"":
I realize we've been a bit obsessive with the hurricane postings but the
combination of real tragedy (vs the 21st century B.S. we're force fed
every day), the real tragedies happening right now, combined with giant
money flows, it's hard to look away.
Regarding the headline, we aren't doing anything with the fertilizer or
other agricultural inputs until there is a decisive turn at the base of
the pyramid - the actual prices of crops and the cash flows they create.
Until that turn, we'll speculate on ag futures as opportunities pop up
but unless we see something along the lines of the El Niño-caused crop
failures of the 1870's - 1890's and famines created/exacerbated by
corrupt/venal/incompetent politicians and administrators, we're not
doing much in the input stuff or implement manufacturers. If we get some
robotics/automation trades we'll post.
Alternatively, we keep tabs on reports of ergot outbreaks in Europe
should there be hints of the cool-and-damp style famines that
quasi-periodically showed up 1315 - 1818. Or potato blight.
So, with that cheery little break, here's Market Realist, Aug 28:...
