By Sarah Atkinson
U.S. farm bankruptcy filings rose in both 2024 and 2025, reversing a trend that had been improving since a peak in 2019. Prior years of falling crop prices, higher interest rates and input costs, rising land prices and rental rates, and stress specific to certain crops and livestock sectors have all contributed to the recent increase in bankruptcy filings. These impacts have been slightly tempered by government efforts to stabilize farm income as well as FSA loan policy.
Bankruptcy is what economists call a “lagging indicator” (AFBF, 2026). By the time a farm files, it has usually already been under financial stress for a while and has exhausted other options, such as refinancing or selling assets. This article provides a snapshot of borrowers participating in the USDA’s Farm Service Agency (FSA) loan programs who filed for bankruptcy between 2015-2025 by state, region, or crop and livestock type.
FSA Direct and Guaranteed Loan Programs
The Farm Service Agency provides farm credit in the form of loans through two primary programs: direct and guaranteed loans. Direct loans are funded through annual Congressional appropriations and are made, and serviced, directly by FSA. These loans serve producers who cannot obtain commercial credit elsewhere on reasonable terms.
Guaranteed loans are originated and serviced by outside lenders including commercial banks, the Farm Credit System institution, or credit unions. FSA guarantees up to 95 percent of the lender’s potential loss due to borrower default. The lender, not the farmer, is FSA’s direct customer in this arrangement. Guaranteed loan customers tend to be larger operations and the loans themselves are subject to a larger loan limit ceiling — currently $2,343,000 (USDA, 2026).
Types of Bankruptcy Filings
Unlike other analyses, which look mainly at Chapter 12 bankruptcy and use this as a proxy for agricultural bankruptcy filings this study covers bankruptcy under all chapters, provided the borrower was a current FSA direct or guaranteed loan customer. The data provides a breakdown of bankruptcy type for guaranteed borrowers only. The bulk of guaranteed loan borrowers (87 percent) took advantage of Chapter 12 bankruptcy. This was followed by Chapter 13 (8.3 percent), Chapter 11 (3 percent), and Chapter 7 (1 percent). For additional information on U.S. farm bankruptcy chapters refer to the articles by the Administrative Office of the U.S. Courts (2026) and National Agricultural Law Center (2026) in the additional resources section.
Source : illinois.edu