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Ag Economist Unsurprising by Farm Bankruptcy Stats

The American Farm Bureau's chief economist isn't shocked that the number of farmers filing for Chapter 12 bankruptcy has risen again. Between September 2018 and 2019, 580 farmers filed for Chapter 12 bankruptcy, data from U.S. Courts says. That number is the highest since 2011, when 676 farmers filed for bankruptcy.


Given America's ag economics, seeing these bankruptcy figures rise makes sense, said John Newton.


"We've had a tough time in the farm economy the last few years," he told "It's not an alarming trend, but it's one that is moving in the wrong direction."


Low commodity prices play a key factor in a farm's financial stability. Almost 50 farms in Wisconsin, for example, filed for Chapter 12 between September 2018 and 2019.


"I think that's primarily due to the low milk prices we've seen since 2014 and 2015," Newton said. "The trade war lowered commodity prices and increased (market) variability."


In November 2014, U.S. dairy producers could earn around US$23 per hundredweight. As of September 2019, that price had dropped to around US$19.30 per hundredweight.


Multiple factors could help the bankruptcy figures decline.


The financial assistance packages the Trump administration announced for the past two years helps some, "but not all farmers were eligible for trade aid," Newton said.


Creating more opportunities for U.S. farm products is a surefire way to ensure farm finances are stable.