The agriculture downturn has dragged US farmland prices lower for a 23rd successive month, and taken sales at farm equipment dealers to historically low levels – and with little hope of improvement for now.
A farmland price index compiled by Creighton University came in at 31.0 for this month, well below the 50.0 level which indicates a neutral market.
The figure was also below the 35.5 figure that the index, compiled from a survey of lenders, indicated last month, when the university estimated its data showed prices dropping at a pace of 6-7% a year.
The extent of the downturn, which began in late 2013 on Creighton estimates, has at last taken its toll on farm rents, which the survey pegged an average of $229 per acre in major US agricultural states.
"This is well below rents recorded six months ago and this is the first time that we measured any real downturn in cash rents," said Creighton economics professor Ernie Goss.
The data follow the results of a report by the Iowa Chapter of Realtors Land Institute showing that prices in Iowa, the top corn and soybean growing state, fell by 11.3% in the year to September 1.
Medium quality cropland is now worth $7,054 an acre, with higher quality land valued at $9,531 an acre.
The group attributed the drop in values, which followed an 8.8% drop in prices the previous year, largely to lower commodity prices and increasing interest rates.
However, land prices have given up only a fraction of their gains over the previous decade, with the institute estimating average Iowa land price rises in the year to the start of September 2013 at 10.3%, following an 18.5% increase the previous year, and a 33% jump in the year to September 2011.
The Creighton survey also showed the agriculture downturn extending pressure on the farm equipment sector, for which a sales index fell to 10.8 this month, a record low for the survey, down from the "anaemic" reading of 14.2 in September.
"The 2014 and 2015 downturns in farm income continue to reduce sales and production of agriculture equipment dealers and producers across the region," Professor Goss said, adding there appeared little hope of recovery ahead.
"Bankers remain pessimistic about the short and intermediate prospects for agriculture equipment dealers and producers."
The comments followed the release on Thursday by irrigators maker Lindsay Corp of results showing a surprise fall into a quarterly loss, while earlier this week, the Association of Equipment Manufacturers reported an 12.7% drop in US tractor sales last month.
This included a 48% slump, to 213 vehicles, in sales of four wheel drive tractors used by large crop farmers.
Combine sales were, at 694 vehicles, down 19.9% year on year.