September 22, 2014

The U.S. farmland price index compiled by Creighton University in Nebraska has fallen to its lowest point since March 2009 at the height of the global economic crisis.  The index has fallen to 33.7 compared to a figure of 50.0 representing a neutral market, with the decline being attributed to a sustained drop in corn, soybean, and wheat futures.  A separate report issued by the Iowa Realtors Land Institute supports these findings reporting that farmland prices in the state have fallen 3.4% in the six months to the beginning of September, 2014, and 8% year on year to rest at $8,000 per acre.  This sustained decline in commodity prices has also caused farmers to suspend investments in equipment.  The Creighton University data indicates an agricultural machinery sales index of 17.6 – down from 25.5 last month representing the 14^th consecutive month of declining sales.  Furthermore, the report states that 94% of respondents indicate a further drop in equipment sales is expected over the course of the year.

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