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New data from U.S. court filings show farm bankruptcies rising again, a troubling sign for family farms from coast to coast… and with particular impacts in the Midwest.
“Chapter 12 bankruptcies increased for the second year in a row in 2025, reaching 315 filings. That’s up 46 percent from 2024. That second increase in a row shows that the farm economy, as we’ve been talking about, is really struggling, and excessive debt loads are starting to hit family farms.” According to Samantha Ayoub, an economist with the American Farm Bureau Federation.
The Midwest and Southeast led the increase, reflecting continued financial stress from rising input costs and weakening commodity receipts.
Ayoub continues, “When you have some good years, that capital might be able to get you through a few downturns. We know we’ve seen declining receipts for four years now, and we’re just starting to see that second year in a row of increases in bankruptcies. And then secondly, a majority of farms actually don’t qualify for Chapter 12 farm bankruptcies. In order to qualify, you have to make the majority of your family income from farming.”
For communities that depend on agriculture, the rise in bankruptcies can ripple outward… affecting local feed stores, equipment dealers, processing plants, and Main Street businesses.
Ayoub adds, “All of that compounds to a very difficult situation when we’re also seeing increasing production costs.”
Farmers and farm groups warn that without stronger support and more stable prices, continued stress in the farm economy could lead to more closures in the coming year.