By Andi Anderson
In 2025, family farm bankruptcies have surged by 55% compared to the previous year. This troubling trend is driven by various financial challenges, including low commodity prices and rising input costs.
As farmers struggle to make ends meet, many are turning to Chapter 12 bankruptcy filings. This special provision, designed for farms, allows farmers to propose a repayment plan rather than liquidating their assets.
Experts like Scott Stiles from the University of Arkansas point to several pressures facing farmers, including commodity prices similar to those seen during the 2018-2019 period. Input costs, such as for seed, fertilizer, and diesel, continue to remain high, further exacerbating the financial strain.
Weather challenges and concerns about the trade environment have added to the difficulties. As Margy Eckelkamp from AgWeb reports, higher costs for inputs and lower commodity prices have led many row crop farmers to deplete their cash reserves, leaving them vulnerable to price volatility. Some farmers have postponed addressing financial issues, only to find themselves unable to recover when the situation worsened.
The Federal Reserve Bank of Chicago’s recent report also highlights troubling trends. Repayment rates for non-real-estate farm loans were much lower in the first quarter of 2025, marking the sixth consecutive quarter of decline. More farmers are seeking loan extensions, but fewer have the funds to repay loans on time.
These developments signal a growing crisis in the agricultural sector. Farmers are facing a difficult road ahead as they navigate the pressures of rising costs, unpredictable market conditions, and lower-than-expected loan repayments.
Some Points to Remember:
- 55% increase in family farm bankruptcies in 2025.
- Chapter 12 bankruptcy filings offer a chance for repayment plans.
- High input costs and low commodity prices are major contributors.
- Loan repayment rates have dropped significantly in 2025.
Photo Credit: gettyimages-alexeyrumyantsev
Categories: Illinois, General