Farm bankruptcies on the rise amid COVID-19 pandemic
Year-to-year bankruptcies increased 23 percent, according to data released from U.S. Courts. An American Farm Bureau Federation Market Intel report shows 627 filings during the year-long period ending in March 2020, marking five straight years of Chapter 12 bankruptcy increases.
Wisconsin was hit hardest with 78 filings in the year period, followed by Nebraska with 41, and Iowa at 37.
“Each bankruptcy represents a farm in America struggling to survive or going under, which is both heartbreaking and alarming,” said American Farm Bureau President Zippy Duvall. “Even more concerning, the difficulty staying afloat is made worse by the pandemic and related shutdowns as farmers are left with fewer markets for their products and lower prices for the products they do sell.”
Currently, the increase in bankruptcies is not related to the coronavirus pandemic. That is certain to change as U.S. unemployment is projected to reach 14.5% in the second and third quarters, which will cause a decline in off-farm income. This could affect farmers’, notably small-to-medium-sized farms’, ability to service a record $425 billion in debt, because many farmers rely on off-farm income as a stabilizing force.
“Congress and the administration made an initial investment in America’s farmers and ranchers with the $19 billion Coronavirus Food Assistance Program,” said President Duvall, “but more must be done to ensure farms survive to continue providing food for America’s families during the pandemic and beyond.”