Farm bankruptcies have increased 8% over the last 12 months, but filings have slowed over the last 6 months as the COVID-19 pandemic disrupted the U.S. economy, a new American Farm Bureau Federation Market Intel report says.
The U.S. saw 580 new farm bankruptcy filings from June 2019 to June 2020. However, 284 Chapter 12 bankruptcy cases were filed from January to June 2020, which amounts to 10 fewer than at the same time in 2019. A Farm Bureau press release indicates the $6.8 billion in CFAP payments given to producers has played a role in the slowdown in bankruptcies.
“The bankruptcy numbers don’t tell the whole story,” AFBF Chief Economist John Newton said in the release. “The fact that the bankruptcy process is now virtual probably contributed to a decline in numbers. CARES Act assistance was also a bandage that slowed the bleeding on many farms, but those protections will soon expire. Without more help, we could expect to see filings begin to rise again.”
The Midwest saw the most bankruptcies with a total of 296 filings, while the Southeast and Northwest followed with 122 and 46, respectively.
At the state level, Wisconsin led with 69 filings and Nebraska followed with 38. Georgia and Minnesota each had 36 filings.
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