FAYETTEVILLE, ARK. (RFD-TV) — Financial pressure continues to build across agriculture, with Arkansas leading the nation in Chapter 12 farm bankruptcy filings during the third quarter of 2026.
New federal court data shows 32 Arkansas agricultural operations have filed for Chapter 12 protection so far this year, highlighting the challenges producers across the state face.
Harrison Pittman, director of the National Agricultural Law Center at the University of Arkansas, joined Market Day Report to discuss the rising bankruptcy numbers, the factors putting pressure on farm finances and what producers should know about their options.
Arkansas Leads the Nation in Chapter 12 Filings
Arkansas recorded 12 Chapter 12 bankruptcy filings during the third quarter, twice the six reported in Iowa, the next-highest state.
Nationwide, 292 Chapter 12 cases were filed during the first three quarters of 2026, nearly 19% more than the 246 recorded during the same period in 2025.
Pittman said the numbers reflect several years of difficult economic conditions for farmers.
Lower commodity prices and rising production costs have pressured farm finances, with recent increases in fuel and diesel prices adding to the challenges.
He said many producers have been working through their equity and are now reaching a point where they may need to restructure debt.
Arkansas Agriculture Faces Unique Pressures
Pittman said Arkansas faces many of the same economic challenges as other agricultural states, but its crop mix and production practices may help explain why bankruptcy filings are particularly high.
Arkansas is a major soybean and cotton producer and leads the nation in rice production. Pittman said those industries expose the state to multiple market and production pressures.
He also pointed to the state’s reliance on irrigation, which makes rising fuel costs especially significant for producers.
Pittman characterized those factors as part of a combination of challenges that have accumulated over several difficult production years.
Chapter 12 Allows Family Farms to Restructure
Pittman emphasized that filing for Chapter 12 bankruptcy does not necessarily mean a farmer is leaving agriculture.
Chapter 12 is designed to help family farmers reorganize their debts while continuing to operate.
The process involves working with attorneys, creditors, a bankruptcy trustee, and the court to develop a repayment plan.
Pittman said those plans typically cover three to five years and establish how the operation will meet its financial obligations.
At the end of the process, producers who successfully complete their plans may be able to discharge eligible remaining debt and continue farming.
He noted that the operation may look different after restructuring, depending on what changes are necessary to make the business financially sustainable.
Bankruptcy Filings Tell Only Part of the Story
Pittman said Chapter 12 filings provide an important measure of farm financial distress, but they do not capture every operation experiencing difficulties.
Through the National Agricultural Law Center’s Data on Economic and Bankruptcy Trends (DEBT) Project, researchers also track agricultural operations filing under Chapter 11.
He said another unknown is how many farmers simply decide to leave agriculture without filing for bankruptcy.
Some producers may have enough equity to exit farming without restructuring their debt, while others may pursue bankruptcy under different chapters of the federal code.
Pittman said obtaining a clearer picture of those situations would help researchers better understand the full extent of financial stress across agriculture.
First Quarter Could Bring More Filings
Looking ahead, Pittman said he is concerned that financial pressures may continue into the coming months.
The DEBT Project’s historical data from January 2021 through June 2026 show that agricultural bankruptcy filings typically increase during the first quarter of the year.
Pittman said that timing often coincides with producers working with lenders after harvest and making difficult decisions about their financial situations.
With 32 Arkansas operations already filing through the third quarter of 2026, the state’s year-to-date total is just one below its full-year 2025 total.
He said it remains unclear when filings will begin to level off or decline.
