By Bauyrzhan Zhaxylykov
After several strong years, financial pressure is returning to Michigan farms.
Rising input costs and flat crop prices have tightened margins, which led nine Michigan farms to file for Chapter 12 bankruptcy protection in 2025.
“Bankruptcy occurs when a farm can’t meet its debt payments and owes more than its assets are worth,” said Bill Knudson, a Michigan State University professor of agricultural, food and resource economics.
“Farmers may negotiate with lenders or file Chapter 12 to create a plan to pay down debt over time,” Knudson said.
The trend reflects broader national pressures. Chapter 12 farm bankruptcies climbed for the second straight year, reaching 315 filings in 2025, a 46% increase from 2024, according to the American Farm Bureau Federation’s Market Intel report.
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