Farm bankruptcies are up but ‘not yet a crisis,' economists say

From soaring farm bankruptcies to record-high cattle markets, the U.S. agricultural economy is a study in contrasts.

As congressional ag leaders seek to get more financial aid into the hands of struggling producers, with figures as high as $20 billion floated, discussion of American crop farming is largely grim. 

Senate Ag Committee Chairman John Boozman’s state of Arkansas led the country last year in Chapter 12 farm bankruptcy filings, the highest this century for the No. 1 U.S. rice grower. Economists predict a fourth straight year of negative returns for corn and soybeans. A volatile global trade landscape, rising input costs and intensifying global competition are all weighing on crop growers.

Pro-ag biofuel policies, conflict in the Middle East and drought-driven supply concerns have yet to lift crop prices enough to offset elevated production costs. Alarm bells are going off from the food hubs of California, through the Midwestern Grain Belt, down to the Delta and up to New England's vanishing farms.

“There’s all sorts of indicators showing that there is a lot of stress in farm country,” Iowa Farmers Union President Aaron Lehman, a fifth-generation family farmer, tells Agri-Pulse. The amount of money producers are borrowing for operating expenses is up, working capital is down and calls to hotlines from farmers under severe financial and mental stress are way up, he adds. “Farm equipment isn’t moving. People are cutting back everywhere they can. We're not in a healthy situation at all.” 

As Boozman put it at a Senate hearing last month: “If you’re putting something in the ground, you’re probably losing money.”

Cattle tailwinds 

Cattle markets tell a different story. 

Futures tied to live cattle broke the historic $250 mark last week amid the lowest U.S. supplies in 75 years, limited herds from Mexico and lower feed costs. Add to that an explosion in consumer demand for proteins, helped by the popularity of anti-obesity drugs that are putting a spotlight on the benefits of protein to preserve muscle mass. 

“Great demand and short supply of beef cattle, short supply of some other proteins as well in the hog, poultry and egg sectors, and low input costs have all combined for a pretty favorable economic outlook,” Jackson Takach, Farmer Mac’s chief economist and vice president of strategy, research and analytics, said in an interview with Agri-Pulse. It’s part of the larger “tale of two economies." 

Bankruptcies, crop prices 

In the world of grains and oilseeds, the U.S. Midwest and Southeast posted higher Chapter 12 farm bankruptcies last year, with both regions seeing a rise of about 70% from 2024, according to a new report from Farmer Mac, a federally chartered corporation that aims to boost access to affordable financing for farmers, ranchers and for rural infrastructure. 

Overall, Chapter 12 filings among family farmers, fishers and ranchers in 2025 were up 46% to 315 from the prior year. That’s still down from a 55% increase in 2024 and roughly half of the filings during the last major downturn in 2019. It’s also a fraction of thousands seen amid the devastating farm crisis of the 1980s, according to court figures. 

“The farm sector has faced harder times, and it has come back stronger each time,” Farmer Mac said. “The question for lenders today is not whether agriculture will endure, it will, but how to support it effectively through a period of genuine, if manageable, stress.”

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It's a "difficult cycle, not yet a crisis," according to the report. 

Key takeaways include: 

• Arkansas, Georgia, Iowa, Missouri and Wisconsin led U.S. farm bankruptcy filings last year.
• Chapter 12 filing rate hit its lowest level in almost two decades in 2022, due to the 2021–2022 commodity price boom.
• “The current rise in bankruptcy filings may be a reversion from an exceptionally favorable period, not the beginning of something unprecedented.”
• Net farm income across the crop sector is declining, but well above the historical average when adjusted for inflation.
• “The current stress is real and concentrated, not a broad-based agricultural collapse.”

On why crop prices have remained relatively low from the highs of a few years ago, it's key to consider the increasingly competitive global market for ag commodities.

For example, U.S. corn exports set a record in 2025, but prices didn't rise in response. "It's because you always had somebody competing in South America, releasing corn just at the time prices start to move, and that increases supply just at the wrong time for the markets to break out," Takach said. 

It's also unusual for grain and oilseed prices not to go higher as oil prices jump amid the U.S.-Iran conflict. "The markets today are very volatile, and there's a great deal of uncertainty, and that's probably baked into maybe some of the carrying costs being a little bit higher in the grain markets," Takach said. There's a "market uncertainty sort of starting to get priced in, and maybe the commodity complex starts to move if these oil prices stay persistently high. There’s a huge asterisk around that because we don’t know how long it will last. That volatility is one of the factors making markets difficult to predict.”

Fertilizer 

Ryan Loy, an extension economist for the University of Arkansas Division of Agriculture, notes that while it's been surprising that prices of commodities like rice and corn haven't risen much amid the global turmoil, at the same time some farmers in the Delta region still have unsold rice in their bins from 2024. "We have that high supply right now," he said. "And we're still unsure about how the growing season and the harvest season will end up this year." 

On the fertilizer price shock stemming from the Iran war, Loy says the surging crop nutrient prices in the wake of Russia's invasion of Ukraine in 2022 provides a lesson. The record-high prices from the beginning of that conflict took time to come back down. 

"It's called the rocket-and-feathers effect," he said. "When something occurs, those prices are going to go up like a rocket, but they're going to come down like a feather." 

Still, Loy, like Takach, has an overall optimistic outlook for the current era. 

"Bankruptcy is a term that looks very scary, but it's a tool designed to be there to help during times like these, and those farmers should continue to be farming," he said. "If we have 33 bankruptcies for the calendar year, 33 of those farms should continue farming,"