Family farm bankruptcies hit decade-high levels across the Midwest in 2019, study says
A large swath of the Midwest hit decade-level highs in the number of family farms filing for bankruptcy last year, new data shows.
Using U.S. Court records, the American Farm Bureau Federation — an independent organization representing farms nationwide — compiled a report that found farm bankruptcies spiked 20 percent in 2019. That’s the highest increase since 2010, the year after the Great Recession ended.
In the Midwest, it swelled 17 percent from 2018.
The jump “was not unanticipated given the multi-year downturn in the farm economy, record farm debt, headwinds on the trade front and recent changes to the bankruptcy rules,” the Farm Bureau said.
For much of the Midwest, it was a staggering difference from 10 years prior.
According to the Farm Bureau, eight of the 10 states whose farm bankruptcies reached decade-level highs were in the Midwest, including Iowa, Illinois, Kansas, Minnesota, Nebraska, Ohio, South Dakota and Wisconsin.
Of the 10 states with the highest number of filings in 2019, half were also in the Midwest: Wisconsin (No. 1), Nebraska (No. 3), Kansas (No. 4), Minnesota (No. 5) and Iowa (No. 6).
Nationally, the Farm Bureau painted a disjointed picture.
Of the595 Chapter 12 bankruptcies filed across the United States, 264were in the Midwest, the report found. That’s nearly 100 more filings than in 2018 and “the highest level since 2011’s 637 Chapter 12 filings,” according to the Farm Bureau.
Some regions, such as the Northeast and Southwest, saw a drop in filings from 2018. Others had only slight increases.
In the past 10 years, Wisconsin reportedly had the second highest number of filings — 375. Only California had more.
“Over the last decade, there have been more than 5,000 Chapter 12 farm bankruptcies across the U.S., representing approximately a quarter of 1% of all farm operations during this time period,” the Farm Bureau said.
Income from farming in 2019 didn’t take as much of a hit — thanks in part to the Trump administration, according to the Farm Bureau.
“Net farm income in 2019 is slightly above the 20-year average but was supported in large part by the Trump administration’s efforts to financially shield farmers from unfair retaliatory tariffs,” the Farm Bureau said.
Without that shield, the organization said economists found income would have dropped to the second lowest in a decade.
“The corollary to this is that farm bankruptcies could have been worse considering the record-high farm debt of $415 billion (in nominal terms) and the likely difficulties servicing this debt without the revenue from the Market Facilitation Program,” according to the Farm Bureau.
