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Farm bankruptcies across the country are climbing.
In 2025, farmers filed 315 bankruptcy cases, which is higher than the previous four years, according to an American Farm Bureau Federation report. These are Chapter 12 bankruptcies, which are designed for “family farmers” according to the U.S. court definition.
Economists say the increase in filings is due to a combination of rising operational costs on the farm, such as fertilizer and machinery, and low crop prices that are putting pressure on farmers. Farm bankruptcy filings are typically a lagging indicator that farmers are facing financial distress.
The number of filings remains lower than in the 2010s, when farm bankruptcy filings exceeded 500 in some years.
But Joe Mahon, an economist at the Federal Reserve Bank of Minneapolis, said farm bankruptcies could creep back up to those high levels.
“The commonality between what we're seeing right now and what we saw in the latter half of the last decade is sort of a prolonged period of strain on incomes starting to eat into savings,” Mahon said. “That ends up resulting in a financial picture that causes more producers to look into filing for bankruptcy.”
He said some farmers were able to build up a bit of a cash cushion between 2022 and 2023, when disruptions to crop supply associated with Russia’s invasion of Ukraine and extreme weather in South America led to higher crop prices for American farmers. At the same time, though, input costs began to balloon at the tail end of those years.
“We saw a really kind of a short-lived surge in grain prices, particularly for wheat, and then in other crop prices as well during that period,” Mahon said. “But other than those two years, it's been a long period of relatively weak farm incomes.”
A financial U-turn
In recent years, markets in South America have ramped up production of key crops such as soybeans. That has added more competition for American growers, especially amid the ongoing trade war with China and other countries.
“Agriculture continues to get more and more productive, and that’s for the world as a whole a good thing, because it means we can feed more people,” Mahon said. “But if you're a producer, it kind of cuts both ways, because that leads to this sort of high supply of commodities, and that puts downward pressure on prices.”
Row crops are only one part of the farm economy, though. The livestock industry has been a bright spot, as a historically low U.S. cattle herd has led to strong prices for some livestock producers.
“So for those operations that have cattle available to sell, profit margins have been quite exceptional,” said Nate Kauffman, executive director of the Center for Agriculture and the Economy at the Federal Reserve Bank of Kansas City.
That economic strength among livestock producers has helped offset some of the losses crops incurred, Kauffman said.
Even still, the U.S. Department of Agriculture estimates that farm-sector debt could increase by more than 5% to reach $624.7 billion this year.
A tale of two states
Arkansas led the nation in farm bankruptcy filings last year, with 33, according to the Farm Bureau report. That’s about double the amount in the state the year before.
Tyler Oxner, director of commodity activities and economics at the Arkansas Farm Bureau, said he’s still trying to figure out why bankruptcies are particularly high in his state.
“It may just be our aging demographic here in the state,” Oxner said. “And the sheer number of farms that are losing money over the past three years.”
Oxner said the war in Iran is further hurting fuel and fertilizer prices.
“With it being three years of bad financials, that cost is very hard to swallow now,” he said.
One-time government assistance payments, such as the Trump administration’s $11 billion package for row-crop farmers, are helpful, Oxner said, but he is hoping for more long-term sustainability, such as more open trade.
In Iowa, the economic situation is a bit more nuanced. The state had the third-highest farm bankruptcy filings last year, but it’s also seeing an increase in new farms opening.
“Iowa, I think, is in a little bit of a unique position,” said Christopher Pudenz, economics and research manager at the Iowa Farm Bureau. “We have a strong livestock sector, we have our biofuel sector, and we're able to export.”
Iowa experienced 18 farm bankruptcies in 2025, which Pudenz said was low, but still an increase from last year. Pudenz acknowledges that the agricultural economy is in a downturn and that there are no silver bullets to fix it.
“But just because things are challenging doesn't mean they're hopeless,” Pudenz said. “The ag economy has gone through downturns before and has come out on the backside and has had successful, thriving times after those downturns.”
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.
