Midwest and Southeast See Sharp Increases in Farm Bankruptcies
Chapter 12 farm bankruptcies in the United States rose for the second consecutive year, reaching 315 filings in 2025, a 46% increase from 2024. The Midwest and Southeast led the rise, with 121 and 105 filings respectively, far exceeding other regions.
Financial pressures continue to mount across crops and livestock. Row crop losses, weak dairy, hog, and poultry markets, and high costs have pushed many farms toward bankruptcy. Arkansas reported 33 filings, the most in its history, while Georgia saw 27 filings, up 145% from 2024.
Other states with notable increases include Iowa, Nebraska, Missouri, Wisconsin, Minnesota, Kansas, Montana, and Pennsylvania. California remained unchanged with 17 filings but continues to face financial stress in its diverse agriculture.
Chapter 12 provides relief for family farms with most income from farming, allowing more flexible debt payments. However, many farms rely on off-farm income and may not qualify, forcing them to sell land, reduce production, or close. Between 2017 and 2024, over 160,000 U.S. farms closed.
Farm debt continues to rise, with USDA projecting $624.7 billion in 2026. Operating loans increased nearly 40% in Q4 2025, with average loans 30% larger than the previous year. Machinery and equipment loans also reached record maturities. Interest rates remain above decade averages, with total interest expenses expected to hit $33 billion.
These numbers show the strain on farmers trying to stay afloat. Chapter 12 can help manage debt, but many family farms cannot use it due to income rules. The rising bankruptcies reflect broader financial challenges and suggest that farm closures may continue, affecting food, fiber, and fuel supply chains nationwide.
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