Michigan Farmers Face Rising Bankruptcies Amid Financial Pressures

Chapter 12 farm bankruptcies climbed 46% in 2025 as input costs rise and crop prices stagnate

Published on Feb. 23, 2026

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Rising input costs and flat crop prices have tightened margins for Michigan farmers, leading nine farms to file for Chapter 12 bankruptcy protection in 2025. Chapter 12 farm bankruptcies climbed 46% nationally in 2025, with the Midwest and Southeast regions hit hardest. Experts say financial planning and support programs are crucial as farmers navigate these challenges.

Why it matters

The financial pressures facing Michigan farmers reflect broader national trends, with the Midwest and Southeast regions particularly impacted. As input costs rise and crop prices stagnate, the profitability of farming operations is being squeezed, leading to an increase in bankruptcies. This highlights the need for farmers to have strong financial planning and access to support programs to weather these difficult conditions.

The details

Rising costs for fuel, fertilizer, and equipment are cutting into farmers' profits, especially for those growing major export crops like corn and soybeans. Labor shortages are also impacting fruit and vegetable growers. While beef producers remain profitable, row crop farmers appear to be in the most difficult situation. State officials are working with federal partners and expanding programs like the Farm to Family Program to help farmers diversify and improve profitability.

  • In 2025, there were 315 Chapter 12 farm bankruptcy filings nationwide, a 46% increase from 2024.
  • In 2025, Michigan saw 9 Chapter 12 farm bankruptcy filings, down from 12 in 2024 but still higher than the 0 filings in 2023.

The players

Bill Knudson

A professor of agricultural, food and resource economics at Michigan State University.

Tim Boring

The director of the Michigan Department of Agriculture and Rural Development.

Alan Ker

A Michigan State professor and Elton R. Smith Chair in Food and Agricultural Policy.

Michigan State University

A public research university located in East Lansing, Michigan.

Department of Agriculture and Rural Development

The state agency responsible for supporting Michigan's agricultural industry.

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What they’re saying

“Bankruptcy occurs when a farm can't meet its debt payments and owes more than its assets are worth.”

— Bill Knudson, Professor of agricultural, food and resource economics (ourmidland.com)

“These are nationwide problems, although the situation appears slightly worse in the Midwest due to its dependence on major export crops and purchased inputs such as fertilizer.”

— Bill Knudson, Professor of agricultural, food and resource economics (ourmidland.com)

“Bankruptcies aren't a great indicator of financial stress on farms.”

— Alan Ker, Michigan State professor and Elton R. Smith Chair in Food and Agricultural Policy (ourmidland.com)

“We're engaged with federal partners at several levels on what can be done.”

— Tim Boring, Director of the Department of Agriculture and Rural Development (ourmidland.com)

“These aren't silver bullets, but they offer paths forward to address broader profitability challenges, and it will take time for those changes to take effect.”

— Tim Boring, Director of the Department of Agriculture and Rural Development (ourmidland.com)

What’s next

State officials say they are working with federal partners to find solutions to the financial challenges facing Michigan farmers, including exploring ways to improve farm profitability and help growers add value to their products.

The takeaway

The rise in farm bankruptcies in Michigan and across the country highlights the need for farmers to have strong financial planning and access to support programs to navigate the pressures of rising input costs and stagnant crop prices. While the situation is not as dire as past crises, experts warn it may take time for conditions to improve, underscoring the importance of proactive measures to ensure the long-term viability of the agricultural sector.