US farmland has suffered weakest quarter for a decade, and is expected to remain soft, despite the return of investors to the market, an official survey has said.

The value of benchmark non-irrigated cropland grew at an annual rate of 0.4% in the April-to-June quarter, the slowest since 1999, a Federal Reserve survey of heartland agricultural states showed.

Values fell by 1.3% in Nebraska - and by 3.0% in the mountain states of Colorado, Montana, and Wyoming – but rose in Kansas and Missouri a survey by the Federal Reserve's Kansas City office said.

Price rises of other land types also slowed, although irrigated land still managed growth of 2.4%, thanks to the lower irrigation costs brought by a drop in energy charges.

'Investor interest'

"Very few contacts" expected the market to pick up over the next few months, the survey added.

However, a dearth of farms coming onto the market, coupled with findings of "renewed investor interest" in buying land, should act as a floor on prices.

"Even taking into account the typical slowdown in farm sales during the summer months, survey respondents commented that the number of farms being marketed has declined over the last year," the report said.