By Jamie Martin
The United States saw 315 Chapter 12 farm bankruptcy filings in 2025, up 46% from the previous year. The Midwest and Southeast were most affected, with 121 and 105 filings, driven by crop losses and rising expenses.
Financial struggles across the farm sector continue. Row crop losses, combined with tight margins in livestock markets, have led to high bankruptcy numbers. Arkansas recorded 33 filings, more than double 2024, while Georgia had 27 filings, up 145%.
Other states with notable increases include Iowa, Nebraska, Missouri, Wisconsin, Minnesota, Kansas, Montana, and Pennsylvania. California recorded 17 filings but remains under pressure due to high costs and price challenges.
Chapter 12 bankruptcy allows family farms primarily earning farm income to reorganize debt and maintain operations. Farms relying on off-farm income may not qualify, leaving some with no choice but to sell land, cut production, or close. From 2017 to 2024, over 160,000 U.S. farms closed.
Rising farm debt is another concern. USDA projects total farm debt to reach $624.7 billion in 2026. Operating loans in Q4 2025 increased nearly 40% from 2024, with average loans 30% higher and maturities longer. Machinery and equipment loans also saw record maturities. High interest rates are expected to push interest costs to $33 billion in 2026.
These trends show the intense pressure on American farmers. Chapter 12 offers a last-resort option, but many farms remain ineligible. Rising bankruptcies signal continued financial strain and suggest that farm closures may rise, affecting the national food, fiber, and fuel supply chains.
Photo Credit: gettyimages-ben-goode
Categories: National