Farm Bankruptcies Up Sharply in 2024

After decreasing year after year dating back to 2020, the number of farm bankruptcies increased last year.  With 216 farm bankruptcies last year, that marks a 55% increase from 2023; the first such increase since 2018-2019.

According to the American Farm Bureau Federation, Chapter 12 bankruptcies filed in the Northwest doubled from 2023 to 2024.  But, with 12 filings, the Northwest tied the Southwest for the region with the second fewest filings.  In addition, the Southwest was the only region with a decrease in filings, down 14% year-over-year, from 2023.  That comes after the Southwest was the only region to increase in Chapter 12 filings in 2023.  After experiencing significant droughts and weather-related losses in the Southwest in 2023, all states except Utah had lower weather losses in 2024.

All other regions – Southeast, West, Northeast, Mid-Atlantic and Midwest – had double-digit increases in filings from 2023 to 2024. 

Bankruptcy filings in territories and states outside the contiguous 48 states – designated “Other” by the U.S. Courts – more than tripled in 2024, hitting a five-year high of 14 bankruptcies.  However, this is still lower than any year between 2007 and 2019. 

The Farm Bureau states, as we look ahead to another year of declining farm receipts, particularly in crop markets, we can look back to 2024 and see the impacts of that drop in income in the increase in the number of farms filing for bankruptcy.

Net farm income in 2024 reached a four-year low, decreasing nearly 24% in just two years. Lowered revenues and above-average production costs continue to squeeze farmers and ranchers on both sides of the balance sheet, threatening farm liquidity – their ability to pay off their financial obligations. As such, farm operating loans continue to surge to cover expenses.

According to the AFBF, Increasing Chapter 12 bankruptcy filings provide a glimpse into the long-term conditions in farm country.  Farmers and ranchers filing for bankruptcy have exhausted all other resources for covering their debt and expenses, and as the farm economy continues to be squeezed by decreased receipts and increased expenses, farm financials will be strained.

As American farmers enter the start of another planting season, many producers are surely making tough decisions on how to finance their operations.  With all these factors in mind, they are also still waiting on the ad hoc economic and disaster aid from the American Relief Act of 2025 to be dispersed to sustain their short-term operations.  Long-term, AFBF warns, these worsening credit conditions highlight the calls for updated support for farmers as we enter the third year of Farm Bill negotiations.

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