The agriculture downturn, which is causing "significant distress" at some farms and closures at others, has prompted the biggest slide in US farmland prices since at least the 1980s.

Prices of farms in America's agricultural heartland fell, year on year, for the first time in a decade in the July-to-September quarter, data from the Federal Reserve's Kansas City office showed.

The 2% fall eclipsed that of the late 1990s' downturn, and was the largest found in available records, which stretch back to 1990.

Worst affected 

The decline, which follows a "spike" in prices in 2007 and 2008, was led by ranchland, where prices fell 4.7% year on year.

By area, so-called Mountain States, such as Wyoming, suffered the greatest decline, with ranchland prices slumping 10.0% year on year.

Nebraska land of all three types fell by about 5%.

"After posting some off the steepest annual increases in farmland values over the last two years, Nebraska values have moderated somewhat in 2009," the office said.

'Culling herds'

The slide in agriculture's fortunes, following a slide in crop prices and demand for meat amid the recession, was also reflected in lower rates of farm loan repayments and rising demands for new borrowing.

Bankers surveyed for the report "reported weaker farm incomes due to sagging protein demand and a summer decline in crop prices", the office said.

"With shrinking margins, livestock producers have been… culling herds and consolidating feedlots."

A banker in Oklahoma told the Federal Reserve that "poultry farmers are in significant distress. Farms are going out of business every week".

A New Mexico banker said: "We have lost three feed yards and one large swine feeding facility in our area".