Farm bankruptcies grew by 99 cases in 2025

The “46% surge” refers specifically to U.S. Chapter 12 farm bankruptcy filings, which rose from about 216 cases in 2024 to 315 in 2025, according to U.S. Courts data summarized by the American Farm Bureau Federation and others.

What the 46% figure actually is

• It is a year‑over‑year change in Chapter 12 (family farmer/fisherman) bankruptcy petitions, not all farm exits or all bankruptcies involving farm-related entities.

• U.S. Courts recorded 315 Chapter 12 farm bankruptcies in calendar year 2025, up 46% from 2024 and the second consecutive annual increase.

• Even after this jump, filings remain below earlier peaks seen in the last decade, so the level is historically elevated but not unprecedented.

Regional and commodity context

• The Midwest and Southeast accounted for most cases, with about 121 and 105 Chapter 12 filings respectively in 2025; those represent roughly 70% and 69% increases over 2024 in those regions.

• Arkansas led all states with 33 filings, more than double the prior year and the highest for that state in the 21st century.

• Georgia had 27 filings, up about 145% year over year, with Texas, Louisiana (12 each) and Florida (16, up roughly 200%) also showing notable jumps, reflecting pressure on row crops and high‑cost specialty crops.

Drivers behind the increase

• Analysts tie the spike to several overlapping pressures: multi‑year declines in farm cash receipts for key commodities, persistently high input costs, and higher interest rates that have pushed debt service burdens up.

• Federal Reserve and USDA data show larger and more numerous operating loans: nearly 40% more new farm operating loans were opened in late 2025 versus a year earlier, with the average loan size about 30% larger and maturities modestly extended.

• Total farm sector debt is projected to rise further, with USDA forecasting record‑high farm debt and a higher sector‑wide debt‑to‑asset ratio in 2026, suggesting additional solvency pressure.

Limits of the bankruptcy metric

• Chapter 12 is only available to eligible family farmers and fishermen; farms that derive most income off‑farm, or that do not meet size/structure tests, may not qualify and may exit through liquidation or quiet closure instead.

• Because of those eligibility limits, increases in Chapter 12 filings likely understate the total number of financially distressed or closing farm operations.

Forward‑looking implications

• USDA and farm‑sector analysts expect a fourth consecutive year of declining real farm income, which, alongside still‑elevated costs and rising debt, points to continued stress in 2026.

• Commentators therefore anticipate that both bankruptcy filings and non‑bankruptcy farm closures may continue to rise, with knock‑on effects for rural economies and the broader food and fiber supply chain.