More than 500 farmers filed for Chapter 12 bankruptcy in one year
By Diego Flammini
More U.S. farmers are filing for Chapter 12 bankruptcy, new data suggests.
The number of Chapter 12 (a specific chapter for farms and fishing operations) filings increased to 580 between September 2018 and 2019, data from the U.S. Courts says.
That number is up from 498 in 2018, but shy of the 676 filings in 2011.
Just about every state had at least one farm bankruptcy filed.
Only Nevada, Utah and New Mexico had none.
The states with the highest number of Chapter 12 filings include Wisconsin (48), Nebraska, Kansas and Georgia each had 37, and Minnesota had 31.
Multiple issues have contributed to the rise in bankruptcies.
“Chapter 12 farm bankruptcies continue to increase as farmers and ranchers struggle with a prolonged downturn in the farm economy that’s been made worse by unfair retaliatory tariffs on U.S. agriculture as well as two consecutive years of adverse planting, growing and harvesting conditions,” John Newton, chief economist with the American Farm Bureau Federation (AFBF), said in an article on the organization’s website.
One reason for the bankruptcy trend is cash flow.
“I think that is the key, (farmers) have been reducing expenses for the last five years, so we’re keeping expenses down,” Galen Larson, president of Platte Valley Ag Credit Co. at the Platte Valley Bank in Scottsbluff, Neb., told KTIC. “It’s just taking advantage of when the market presents itself to take the price.”
Farms.com has reached out to the AFBF for comment.