Deep losses caused hundreds of Chapter 12 farm bankruptcies in 2025

Source: American farm Bureau Federation

Key Takeaways

• Chapter 12 bankruptcies increased for the second year in a row, reaching 315 filings in 2025. This is a 46% increase from 2024.

• The Midwest and Southeast filed 121 and 105 Chapter 12 cases, respectively, far outpacing any other regions. Deep crop losses across commodities common in these two regions have compounded after years of declining receipts and rising expenses.

• Families must earn the majority of their income from farming to qualify for Chapter 12. As off-farm income becomes more important for family benefits and supporting farms during economic downturns, many family farms are not eligible for Chapter 12 bankruptcies and may have to close altogether when debt and operating expenses become too great.

Image credit - Mark Stebnicki

WASHINGTON, DC - As we look ahead to another year of challenges in the farm economy, indicators of farm financial health are under close inspection. Filing for Chapter 12 bankruptcy is a last resort for farmers who have undertaken large debt to continue operating with increased flexibility for payments. AFBF Market Intel reports have long followed annual filings of Chapter 12 family farm bankruptcies, and this year’s uptick is another reminder of the strain American farmers and ranchers face.

The U.S. Courts report that 315 farm bankruptcies were filed in calendar year 2025, up 46% from 2024. While still down from recent highs, this is the second year in a row of increased filings. Chapter 12 also does not reflect larger trends in farm closures that may be the only option for certain struggling operations.

Declining Farm Receipts Drive Local Increases

The most recent farm income forecast confirmed that the farm economy has faced extreme financial pressure, with little relief in sight. Significant losses are expected across crop sectors for another year, and many livestock sectors are also tightening margins. The Midwest and Southeast each filed 121 and 105 Chapter 12 cases, respectively, far outpacing any other regions. This is a 70% increase in filings for the Midwest, and a 69% increase in the Southeast.

Deep losses across commodities common in these two regions have compounded after years of declining receipts and rising expenses. For example, rice farmers are expected to lose over $200 per acre in loss, even after supplemental assistance. The nation’s leading rice- producing state, Arkansas, leads the U.S. in Chapter 12 filings in 2025 with 33 filings, more than double 2024 and the most in the state in the 21st century. Georgia follows with 27 filings, up 145% from 2024, reflecting both losses per acre in principal row crops and limited support for high-cost specialty crop production. Other Southeast states with double-digit bankruptcies include Texas and Louisiana with 12 each, and Florida with a 200% increase from 2024 to 16 filings.

Continue reading here>> https://www.fb.org/market-intel/farm-bankruptcies-continued-to-climb-in-2025