Farm Bankruptcies Surge: What’s Fueling the Financial Strain?
The numbers are staggering, farm bankruptcies have risen by 55 percent in 2024, with 216 Chapter 12 filings. These aren’t just statistics. Behind every one of those numbers is a family facing heart-wrenching decisions, trying to hold on to their farm, and dealing with the crushing weight of mounting challenges.
We're seeing a storm of factors: rising costs, unpredictable weather, and volatile markets, all converging to push farmers to their breaking point. Unfortunately, it seems like this is just the beginning.
Why It’s Happening
There’s no single cause behind the rise in bankruptcies, but the reasons are pretty clear. Net farm income has dropped nearly 24 percent in the past two years. This decline is pushing family farms into a corner, especially when the cost of everything, feed, fertilizer, and equipment, is climbing, and staying profitable is getting harder by the day. To make matters worse, interest rates have reached a 10-year high, making borrowing more expensive than ever.
On top of that, we’ve seen a lot of global market instability and trade unpredictability. That means farmers can’t be certain about the prices they’ll get for their crops or livestock. With so much up in the air, the pressure is mounting, and those who are already struggling are feeling it the most.
Farmers in places like the Midwest and Southeast are bearing the brunt of this. In some areas, bankruptcies have increased by up to 69 percent. And it’s especially tough on family-owned operations, where the financial stress doesn’t just impact the business, it can tear families apart.
What This Means
Farm bankruptcies don’t just affect the farmers, they ripple out and affect entire communities. When a farm fails, it’s not just a family that’s hurt; the local economy feels it too. Jobs are lost, local businesses suffer, and neighbors see the hardworking farmers they’ve known for years lose everything. There’s also the emotional toll, the feeling of watching years, maybe even generations, of hard work and legacy come to an end. Each bankruptcy is a painful reminder of how fragile the farming life can be.
What Can Be Done
So, what can we do about this? While there’s no easy fix, there are steps farmers can take to help weather the storm. The first step is to keep a close eye on your finances. It might not be fun, but knowing exactly where you stand is crucial. Regularly reviewing your profit and loss statements is the best way to spot any problems before they get out of control.
A trusted financial advisor can also be a huge asset right now. They can help you find ways to cut costs, improve cash flow, and figure out what programs or assistance might be available to help keep your operation going.
It might also be time to get creative. Diversifying your operations can give you some additional revenue streams and a cushion to fall back on when times get tough. Whether it’s experimenting with new crops or looking for off-farm income, being flexible can help make sure you don’t put all your eggs in one basket.
Finally, lean into your community. Don’t be afraid to ask for help, whether it’s financial, emotional, or just a shoulder to lean on. Farming is tough, but we’re tougher when we come together.
The Bottom Line
The rise in farm bankruptcies is a wake-up call. But it doesn’t have to be the end of the road. If you’re in a tough spot, now is the time to take action. Reach out for help, get advice, and start making a plan to safeguard your farm and your family’s future. Things might seem bleak right now, but with the right support, guidance, and resilience, we can make it through these challenging times together.
You’re not alone in this.
