A university survey flashed another signal that the downturn
in the US farm equipment market is at least slowing, even as it reported a 40th
successive month of decline in the country's farmland prices.
A farm machinery sales index compiled by Creighton University,
from a survey of lenders in major US agricultural states, came in at 22.0 for this
While a "still very weak" reading, and well below the 50.0
which indicates a neutral market, the figure was the highest in more than two
years - and well above the figure of 6.7 reported for March last year, a low
for the survey.
"This markets the fifth straight month that the reading has
advanced," Creighton University said.
The figure follows comments from silos maker Ag Growth
International on Wednesday that, after two years of decline in its sales to US
farmers, "early signs of a recovery in demand appear to be forming".
"Management is cautiously optimistic that recent activity is
an indicator of a modest improvement in the North American farm sector," the
Canada-based group said, reporting an increase of more than 30% in new orders
for the first two months of this year, and a "significantly higher" order backlog.
Meanwhile, latest figures from the Association of Equipment
Manufacturers show the strongest February for US overall machinery sales, by
vehicle, since at least 2013, and one well above the five-year average for the month.
'Now less negative'
Ernie Goss, the Creighton University economics professor in
charge of the survey, flagged that while agricultural commodity price changes "remain
negative" they "are now less negative than several months ago".
The impact of the ag downturn appeared evident in cropland
rents too which, at an average of $212 per acre according to the survey, were
down 16.1% year on year.
Values of farmland itself remained in decline too, with an
index reading of a "frail" 33.0, extending a run of sub-50.0 readings which began
in late 2013.
However, while down 0.7 points month on month, the figure
was well above the reading of 20.2 in March last year.
Nebraska price falls
The survey covers states including Nebraska, which according
to a University of Nebraska–Lincoln study published on Wednesday, saw its
farmland prices fall by 10% in the year to February 1, to an average of $2,805
"The current sustained period of lower commodity prices and
the anticipation of these lower values [were] indicated by survey participants
as major forces leading to the declines," the UN-L study said.
"The largest price declines by land classes in Nebraska
occurred in the dryland cropland with irrigation potential at 13% followed by
tillable grazing land at 12%."