Farm Bankruptcy Trends Hold Steady at Highest Levels Since the Pandemic

Federal Reserve data shows Midwest and Southeast farms make up over two-thirds of Chapter 12 filings.

NASHVILLE, TENN. (RFD NEWS) — Right now, farm bankruptcies are on a similar path compared to last year. In the first quarter of this year, 158 farms filed for Chapter 12 bankruptcy protection.

Agricultural attorney Austin Peiffer says that is not the best news.

“The bankruptcies being on track with last year isn’t saying all that much, because I believe last year was the highest number of bankruptcies we’d had since about COVID time,” Peiffer noted. “Being on pace with that means, ‘oh, it hasn’t gotten worse yet.’”

Peiffer says some farmers who filed earlier this spring may have already begun planting before fully understanding the financial strain ahead.

“The farmers who got input financing, they probably didn’t get enough input financing to cover the increased costs of fertilizer and other inputs they need for their crop due to the war in Iran and other issues,” Peiffer explains. “So, you might have gotten through the first part of the year, you might get the crop in, but are you going to blow through your entire line of credit getting the crop in and not be able to get it out?”

Bankruptcy filings continue to rise across the Midwest, with overall filings up 70 percent from last year and at their highest level since the pandemic.

Federal Reserve data shows the Midwest and Southeast accounted for more than two-thirds of all Chapter 12 filings.

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Marion is a digital content manager for RFD News and FarmHER + RanchHER. She started working for Rural Media Group in May 2022, bringing a decade of digital experience in broadcast media and some cooking experience to the team.

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