Economic hardships persist in rural America, and farm bankruptcies continue to increase year-over-year.
Newly released data from U.S. Courts indicates year-to-year farm bankruptcies increased 23-percent. John Newton, chief economist at the American Farm Bureau Federation, say the new figures rival “what we have seen in the past.”
?When we look at the last 12 months, we had nearly 630 Chapter 12 bankruptcy filings. That?s up 23-percent from the same 12-month period, ending in March 2019. This is prior to all of the damage related to the coronavirus,” Newton said.
An American Farm Bureau Federation Market Intel report shows more than 50-percent of the Chapter 12 filings were in the 13-state Midwest region, with Wisconsin, Nebraska, and Iowa being hit the hardest.
?It?s no secret that milk prices have been depressed, and you saw the number of dairy farms decline at the fastest pace in 2019. I think that?s leading to the financial challenges we?re seeing in Wisconsin,” Newton said. “(As) you move into Iowa and other parts of the Corn Belt, the trade situation we faced with lower commodity prices is impacting those producers. Some of hog operations have seen lower return as well.”
Newton says, “More pain is likely to follow,” as unemployment filings reaching the highest level since the Great Depression.
“I think it?s likely to continue this year. The support to agriculture is currently 16-billion dollars. That?s likely not going to be enough. The extent of which these monies can make it out will help keep this trend from accelerating, but until we see the farm economy turn around in a consistent way, producers will continue to face challenges,” Newton said.
