Farmland prices in the southern U.S. Midwest and Delta region held mostly steady in the final quarter of 2014 despite declines in farm income amid depressed grain prices, the Federal Reserve Bank of St. Louis said on Thursday.

Quality grain land values were up 0.8 percent during the fourth quarter of 2014 from a year earlier, the bank said in its quarterly survey of 39 farm banks in its district. Ranch land or pasture land prices declined 2.6 percent during the fourth quarter from one year ago, the bank said.

"Farm income, farm household spending and capital equipment expenditures all declined in the fourth quarter relative to the same period a year earlier," the bank said, adding that most bankers expect farmland prices to decline in the first quarter of 2015.

"It is very difficult for farmers to buy farmland and new equipment with corn prices in the $3.50 range," one Missouri lender told the bank. "Many received much less for their crops this fall. Farmers with a lot of debt cannot postpone the sale of their crop waiting for prices to rebound when they have payments due after harvest."

While cash rent values for quality farmland were up 3.6 percent in the fourth quarter, lender expectations were lower for the first quarter of 2015. Cash rents for ranch land or pasture land were 2.1 percent lower in the fourth quarter of 2014 compared with a year ago, the Fed bank said.

The St. Louis Fed bank's district comprises all of Arkansas, most of Missouri, parts of southern Illinois and Indiana, western Kentucky and Tennessee, and northern Mississippi. Major crops include rice, corn, wheat, soybeans, cotton, hogs, cattle and broilers. The survey was conducted from Dec. 15 - Dec. 31, 2014.

The Chicago and Kansas City Federal Reserve Banks are also expected to release their farm bank surveys this week.