Chapter 12 farm bankruptcies in the U.S. were down in 2018 compared to prior-year levels. While total bankruptcies were lower, as a proportion of farms in the U.S., bankruptcies were higher. Then, in some portions of the U.S., farm bankruptcies were at decade-high levels – likely reflecting poor commodity prices and cash receipts associated with dairy and row crop production.
This situation is likely to worsen. Farm debt is record-high, the debt-to-asset ratio has climbed for six consecutive years, and farm debt as a proportion of annual farm income is at 97 percent—a 32-year high. In addition, lending standards are tighter and the cost of credit is rising. There are options before bankruptcy relief, and certainly many farmers have liquidated assets to discharge debt. How much longer can many others endure remains a question.