Farm Bankruptcies Hit Six-Year High in April

Law360’s Hilary Russ and Emily Lever reported that “monthly farm-related Chapter 12 filings soared in April to a more than six-year high, with more likely on the horizon, amid an overall increase in all bankruptcies as fuel prices and other costs continue to rise, according to data from Epiq AACER.”

“During the month of April, 62 bankruptcies were launched under Chapter 12, a 130% jump from April 2025 and the highest monthly total since February 2020. That figure is also 82% higher than the 34 Chapter 12 filings in March 2026, the data showed,” Russ and Lever reported. “‘This down period for crop farmers has been going on for several years now,’ said Robert E. Moore, an attorney and research specialist at The Ohio State University Extension’s Agricultural and Resource Law Program. ‘Each year that we don’t start on the upswing is just more and more stress on farmers, and I think the higher diesel prices, the higher fertilizer prices, it’s just made 2026 the breaking point.'”

“For monthly farm bankruptcies, the last time new Chapter 12 filings were this elevated was in February 2020, when overall bankruptcy rates were also higher before dropping during the pandemic,” Russ and Lever reported. “‘I don’t think there’s a lot of hope for the farm economy to show improvement any time soon,’ Moore said. ‘The anticipation is this farm stress is going to continue for the foreseeable future. So I think farm bankruptcies are more likely to increase than decrease over the next few years.'”

“So far this year, there have been at least 158 Chapter 12 filings across the country, with the most in Arkansas, Missouri and California, according to Epiq data,” Russ and Lever reported. “There are few Chapter 12 filings generally, so even a small numerical increase can look large.”

Minnesota Had Most Farm Bankruptcies in Q1 2026

The Minnesota Reformer’s Betsy Froiland reported that “Minnesota led the country in farm bankruptcies during the first quarter of 2026, continuing last year’s steady nationwide climb that was particularly steep for Midwest farmers. Eight Minnesota farmers have already filed for bankruptcy this year, double the amount for the entire year of 2024.”

“‘It’s really this margin squeeze on an industry that already operates on extremely thin margins,’ Samantha Ayoub, the agricultural economist who authored an American Farm Bureau Federation report on rising farm bankruptcies, said in an interview,” Froiland reported. “Chapter 12 of the U.S. bankruptcy code was established after the 1980s farm crisis to help struggling family farmers reorganize their debts. Many filing for Chapter 12 continue to farm after filing for bankruptcy, though farm closures are also on the rise, according to the Farm Bureau report.”

“(Bob Worth, who farms corn and soybeans in southwestern Minnesota) said that he knows plenty of farmers engaged in mediation steps that precede bankruptcy, and many who are just plain old quitting,” Froiland reported. “‘They just don’t want to lose any more money,’ Worth said.”

Financial Strain Continues in Ag Economy

Progressive Farmer’s Todd Neeley reported that “while agriculture land values grew by 3% in several Midwest states year over year, a new report from the Federal Reserve Bank of Chicago shows strain in agriculture with falling cash rents, rising loan rollovers, tightening credit and near-breakeven cash flows on farms.”

“The May 2026 Ag Letter from the bank, based on a survey of 104 agricultural lenders in Iowa, Illinois, Indiana, Wisconsin and Michigan, also found land values dipped by 1% since the fourth quarter of 2025,” Neeley reported. “The demand for farmland has fallen as well, as just 11% of lenders reported higher buyer demand while 22% reported lower demand for land.”

“The survey shows the number of farms sold, acreage sold and farmland listed for sale were all down compared to one year ago. Cash rents dropped by 3% overall in 2026 in the region, which was the second consecutive annual decrease after years of increases from 2021 to 2024, according to the survey,” Neeley reported. “Most notably, Iowa reported the biggest drop in rents by 4% year over year and Indiana was the lone bright spot with a 2% increase in rents. Cash rents typically are a leading indicator of farm profitability expectations. So, when rents fall, it suggests farmers and landowners expect tighter margins ahead.”