Farm bankruptcies down in 2021
An American Farm Bureau economist is encouraged by the smaller number of farm bankruptcies filed in 2021.
Veronica Nigh says, “Indeed, one data point does not make a trend, but I’m hoping it’s a trend.”
Nigh says Chapter 12 filings were down 50%, which was the lowest in a decade and the first time in more than ten years with fewer than 300 filings, but she says certain farm sectors still had more financial troubles than others. “Over the last several years, the states that have had the highest bankruptcy filing rate certainly does seem to be folks with strong dairy presence, and given the struggles of that industry over the last several years, it probably doesn’t come as a huge surprise to folks.”
Nigh tells Brownfield net farm income has come up in the last year, but one year doesn’t make up for several bad years in a row. She says it’s important not to lose sight of the 276 bankruptcies that were filed in 2021.
Nigh says the Midwest still had the highest number of bankruptcies with 144 filings, 52% of all farm bankruptcies. Wisconsin had the most with 27 followed by Minnesota with 26. Kansas had 19 bankruptcies last year, and Nebraska and Iowa each had 17.
Nigh says many farmers had to dig into and deplete their savings to get by, and now farmers are dealing with higher input costs, which might become a factor in the number of 2022 farm bankruptcies.