(Adds St. Louis Fed survey results, other details)
Aug 14 (Reuters) - U.S. cropland prices in the central Plains and southern Midwest were stable in the second quarter of 2014 compared with the previous quarter even though farm income was lower due to falling crop prices, according to Federal Reserve Bank quarterly surveys issued on Thursday.
"Despite continued strength in the livestock sector, district farm income remained well below year-ago levels due to falling crop prices and poor winter wheat yields. Cropland values generally held at high levels while strong demand for high-quality pasture pushed ranchland values higher," the Kansas City Fed said in its quarterly survey of 218 farm lenders in the central and southern Plains states. The region is a major producer of wheat, corn, cattle, sheep and other food commodities.
"Demand for farm operating loans rose alongside lower farm income in the second quarter," the KC Fed said.
Farmland prices are closely watched by Fed policymakers, farm lenders and farm suppliers from equipment makers to seed dealers, since farmland is the basic collateral for most farm loans. A five-year boom in grain prices fed by exports and biofuels ended last fall as U.S. grain stocks rebuilt after a record drought. But land auctions this spring have remained strong, easing bankers' fears about a potential "farmland bubble" popping after the boom.
The Kansas City Fed said non-irrigated and irrigated cropland values rose by less than 1 percent in the April-June period from the prior three months. They were up 6 percent from a year earlier.
However, demand for high-quality pastures from livestock producers kept ranchland values rising in the district. They were up more than 2 percent from the first quarter and up 9 percent from a year ago.
Land values to the east of Kansas City did not hold up as well. Cropland values were generally steady, falling less than 1 percent in the second quarter from the previous quarter, and down 3.5 percent from a year ago, the St. Louis Fed said in its quarterly survey of 45 farm lenders in the mid-South and southern Midwest.
Ranchland values in the region fell 7.4 percent compared with the previous quarter and were down 2.5 percent from a year earlier.
However, cash rents rose to their highest levels since the St. Louis Fed began its survey in 2012, with the average rent $191 per acre, up 4.9 percent from the first quarter.
The St. Louis survey covers Arkansas, eastern Missouri, southern Illinois and Indiana, and parts of Kentucky, Tennessee and Mississippi. The region produces corn, soybeans, wheat, other food commodities, cotton, hogs and cattle.
The Federal Reserve Bank of Chicago is expected to issue its quarterly land survey of the northern Corn Belt on Thursday afternoon.
(Reporting by Christine Stebbins in Chicago; editing by Lisa Von Ahn and Matthew Lewis)