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Farm Bankruptcies Surge 46% as Chapter 12 Filings Climb for Second Year
Midwest and Southeast regions see highest number of filings as crop losses and rising expenses take toll on farmers
Published on Feb. 11, 2026
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A new report from the American Farm Bureau found that Chapter 12 farm bankruptcies increased by 46% in 2025, reaching 315 filings. The Midwest and Southeast regions were hit the hardest, with 121 and 105 filings respectively. Factors like deep crop losses across commodities and years of declining receipts and rising expenses have contributed to the surge in bankruptcies, as farmers turn to Chapter 12 as a last resort to continue operating with more flexibility on payments.
Why it matters
The rise in farm bankruptcies is a concerning sign of the financial strain facing the agricultural industry, particularly in the Midwest and Southeast where key crops have been devastated. This trend could have ripple effects on food production, rural economies, and the overall stability of the US farm sector.
The details
The Federal Reserve Bank of Kansas City reported that farmers are taking out larger operating loans and taking longer to repay them. USDA estimates total farm debt will rise 5.2% to a record $624.7 billion this year. Specific states in the Midwest that saw double-digit Chapter 12 filings include Iowa (18), Nebraska (17), Missouri and Wisconsin (16 each), Minnesota (13), and Kansas (11).
- The American Farm Bureau report found 315 Chapter 12 farm bankruptcy filings in 2025.
- This represents a 46% increase from 2024.
The players
American Farm Bureau
A leading agricultural advocacy organization that publishes market intelligence reports.
Federal Reserve Bank of Kansas City
A regional Federal Reserve bank that tracks agricultural finance trends.
USDA
The United States Department of Agriculture, which estimates total farm debt.
The takeaway
The surge in farm bankruptcies, particularly in the Midwest and Southeast, underscores the severe financial pressures facing the agricultural sector. Policymakers and industry leaders will need to closely monitor this trend and consider measures to support struggling farmers and stabilize the farm economy.
