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AFBF reports farm bankruptcies up

An American Farm Bureau Federation economist says farm bankruptcy numbers continue to grow.

Economist Samantha Ayoub says many of the Chapter 12 farm bankruptcies were filed in the Midwest. “In the Midwest, that had by far the most bankruptcies in general at 71 filings in 2024, which was a 69% increase from 2023.”

Ayoub says some of the row crop states have been hit harder than others since farm income peaked in 2022. “In the Midwest and in the Southeast where they’re heavy in row crops, we’re seeing people cut to that kind-of last resort after years and years of declines in their farm revenues.”

Ayoub says states with specialty crops like Michigan and California had very high numbers of farm bankruptcies, 12 and 17 respectively, and she says the cost of labor is likely a factor. “Fruit and vegetable growers, tree nut farmers, they’re all spending around 40% of their production expenses just on labor, and year-over-year for the last ten years, we’ve seen increases in farm wages above the national standard for wages.”

Ayoub says the livestock farmers are doing a little better than crop farmers right now, but Farm Bureau is still forecasting a decline in farm receipts for the next couple of years and she says it will likely take some sort of shock to the market to bring revenues back up.

Ayoub says a new farm bill with an updated safety net is critically important as farmers look down an unending tunnel for signs of the farm economy turning around.