The recent tough farm economy is using up farm reserves
According to the USDA, Farm income will rise to the highest it’s been in the past five years. All farm income totaled 88 Billion dollars but it is not enough. Depressed prices and ongoing trade disruptions continue to take on growers and livestock producers across the U.S., many of whom are filing Chapter 12 bankruptcies.
From September 2018 through September 2019, Chapter 12 bankruptcies totaled 580 filings and were up 24% from the previous 12 months, according to John Newton, chief economist for the American Farm Bureau Federation (AFBF).
Bankruptcy filings have been highest in Wisconsin at 48 filings, followed by 37 filings in Georgia, Nebraska and Kansas. Federal support is expected to help however not all farmers will benefit from trade assistance. One positive note is that Chapter 12 bankruptcies in the third quarter of 2019 were down slightly, 2%, from prior-year levels at 160 filings.
I spoke with the Farm Service Agency in Thief River Falls and they reported no bankruptcies file with their office in the last few years.