Economic struggles put pressure on farm bankruptcies, but the rate of new filings slow.
Between June 2019 and 2020 more than 580 farmers filed for bankruptcies, up 8 percent. The Midwest, northwest, and southeast accounted for more than 80 percent of the filings. Wisconsin led the nation with 69, followed by Nebraska with 38, and Georgia and Minnesota at 36.
During the second quarter of 2020, bankruptcies slowed, but American Farm Bureau economist, John Newton, says that without more aid, Chapter 12 filings will continue to rise.
“One of the things we saw with COVID-19 was many things had to go virtual, so I think that likely played a role in the slowing number of bankruptcy filings we saw this past quarter. I think the CARES Act stimulus certainty helped,” Newton states. “That stimulus is set to expire, and I think we could see Chapter 12 bankruptcies accelerate if we don’t see the House and Senate come up with another stimulus package, not only for the broader U.S. economy, but for agriculture.”
If Congress passes the HEALS Act that could mean $20 billion dollars in additional aid for agriculture.