Even as corn and soybean prices have tumbled from a year ago, bankers across the Midwest have mixed expectations for farmland prices in 2014.

Reports from the Federal Reserve banks of Chicago and St. Louis show farmland prices continued to rise in 2013, however growth faltered in the final quarter of the year with some areas showing a decline in price.

The Federal Reserve Bank of Chicago says the Seventh Federal Reserve District saw farmland values increase by five percent in 2013, the smallest gain since 2009. Farmland prices set a new high last year for the district with inflation-adjusted values almost double the peak of the 70s boom, set in 1979.

 The increase was strong at the beginning of the year but growth tapered off in the fourth quarter with some areas even showing a dip in farmland values. In the district including Illinois, Indiana, Michigan, Wisconsin and Iowa, only Iowa saw lower farmland values in the fourth quarter of 2013 compared to the same period a year earlier as it was affected by drought.

Prices were higher in the states covered by the Eighth Federal Reserve District. The report released by the Federal Reserve Bank of St. Louis shows quality farmland values in the district averaged $5,868 per acre in the final quarter of 2013, over $500 per acre more than the average of the previous quarter. Pastureland in the district averaged $2,500 per acre in the final quarter of the year. Cash rents also increased, averaging $190 per acre for quality farmland.

Although some expect a decline in the market, many bankers remain optimistic regarding the first quarter of 2014 and expect farmland prices to remain steady. The early forecast for 2014 helps ease concerns of a bubble forming in the market.

Purdue Extension economist Craig Dobbins says the next few years are going to be less certain than recent years.

"Commodity prices have come down significantly in the last year, so these large returns we've kind of become accustomed to for the last few years have now shrunk."

Dobbins says it’s more probably for farmland prices to remain steady or decline over the next few years than it is for the market to see another double-digit increase. He encourages farmers and investors considering a farmland purchase to conduct an overall farm analysis to see how the expense would fit.

"If the purchase fits in well with the plan for the farm business and there are sufficient cash reserves to withstand a downturn for the next two to three years, then go ahead," he said. "But if it in any way threatens the farm business then I would want to be very, very cautious about making this purchase."

Financial changes could impact farmland demand as 27 percent of the banks tightened their credit standards for agricultural loans in the fourth quarter of 2013 relative to a year earlier according to the Federal Reserve Bank of Chicago. Interest rates also inched higher to 4.99 percent at the start of 2014.

The Federal Reserve banks of Chicago and St. Louis both expect capital equipment expenditures to fall in 2014.