The number of U.S. farm bankruptcies climbed sharply in April, reaching its highest monthly level in more than six years and underscoring growing financial distress across large segments of the agricultural economy.
Farmers filed 62 Chapter 12 bankruptcies in April, according to data compiled by Epiq AACER and reported by Law360. The total represented a 130 percent increase from April 2025 and an 82 percent jump from March, marking the highest monthly filing count since February 2020.
The surge comes as farmers continue to grapple with a prolonged period of declining commodity prices, elevated production costs and growing debt burdens that agricultural economists say have steadily eroded profitability for many operations.
“Well, it’s no secret that the farm economy’s been in pretty tough shape for quite a while,” said John Newton, vice president of public policy and economic analysis with American Farm Bureau Federation (AFBF).
Chapter 12 bankruptcy, a specialized form of protection designed for family farmers and fishermen, is often viewed as a last-resort financial tool that allows agricultural producers to reorganize debt while continuing to operate.
Newton said the increase in filings is the culmination of financial pressures that have been building for years.
“Input costs, as everyone knows, went up dramatically in 2021 and crop prices really started to fall in 2023. So the cost-price squeeze that many in agriculture are dealing with today. It’s no surprise that the trend in the farm bankruptcies is starting to go up. But this has been a long time in the making,” Newton said.
The rise follows a broader trend. According to AFBF, Chapter 12 filings increased 46 percent in 2025, reaching 315 cases nationwide and marking the second consecutive year of growth. The Midwest and Southeast experienced the largest increases, driven by losses across major crop and livestock sectors.
Agricultural lenders have also reported signs of mounting financial strain. The Federal Reserve Bank of Kansas City has found that farmers are increasingly relying on larger operating loans and taking longer to repay them. The U.S. Department of Agriculture projects total farm debt will rise 5.2 percent this year to a record $624.7 billion.
Much of that borrowing is being used not for expansion or capital improvements but simply to cover rising costs for fuel, fertilizer and other essential inputs. Farm Bureau economists estimate that nearly 40 percent more operating loans were opened during the final quarter of 2025 than during the same period a year earlier.
The financial pressures facing farmers have been compounded by uncertainty surrounding federal agricultural policy. Congress has yet to complete work on a long-term farm bill, leaving producers without clarity on future support programs as they plan for upcoming growing seasons.
Newton said farmers continue to face significant challenges despite some signs that policy changes could eventually provide relief.
“We still have challenges as it relates to fertilizer prices, concerns about fertilizer availability as we move into 2027 and think about next year’s crop. Diesel prices hit a record a few weeks ago. So there’s still some challenges in the farm economy, but there are some tailwinds if we can get them through the Senate and to the President’s desk that could be good for agriculture,” he said.
While bankruptcy filings remain relatively uncommon compared with other sectors of the economy, economists caution that Chapter 12 figures may understate the true extent of financial hardship in rural America.
To qualify for Chapter 12 protection, a family must earn the majority of its income from farming. As more farm households depend on off-farm employment to supplement declining agricultural income and obtain health insurance or other benefits, many struggling operations no longer meet the eligibility requirements.
As a result, some farmers facing overwhelming debt have limited options beyond selling land, reducing production or leaving agriculture altogether.
The Farm Bureau estimates that more than 160,000 farms disappeared nationwide between 2017 and 2024, a trend that industry groups fear could accelerate if economic conditions fail to improve.
Through the first four months of 2026, at least 158 Chapter 12 bankruptcies had been filed nationwide. Arkansas, Missouri and California reported the largest numbers of filings.
For Newton, the recent bankruptcy figures serve as another warning sign that policymakers must address the underlying economic challenges confronting agriculture.
“We need to have a strong farm economy. The communities that farmers call home need to be strong. And I think there are a number of things that we can do there, whether it’s the Farm Bill, whether it’s year-round E15, whether it’s finally addressing our challenges as it relates to labor in agriculture,” he said.
With economists forecasting another difficult year for farm income and production costs remaining elevated, industry observers say the recent increase in bankruptcy filings may signal broader financial challenges ahead for agricultural communities across the country.
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