WASHINGTON, DC – Farm financial stress continued to deepen in 2025 as Chapter 12 farm bankruptcies climbed for a second consecutive year, signaling mounting strain across much of U.S. agriculture. Court records show 315 Chapter 12 filings during the year, a 46 percent increase from 2024 and the highest level since the pandemic-era surge.
Losses across major crop and livestock sectors drove the increase, according to a new report from the American Farm Bureau Federation. The Midwest and Southeast accounted for more than two-thirds of filings, reflecting prolonged declines in farm receipts combined with persistently high input costs. Arkansas led the nation with 33 filings, followed by sharp increases in Georgia, Iowa, Wisconsin, and Minnesota, where margins in row crops, dairy, and livestock narrowed simultaneously.
Rising reliance on credit has compounded the problem. Larger operating loans, longer repayment terms, and interest expenses projected to reach record levels in 2026 have left many operations with little room to absorb another poor year. USDA projects total farm debt climbing to a new high, underscoring the growing dependence on borrowed capital just to stay operational.
Chapter 12 relief remains unavailable to many family farms, however, particularly those relying on off-farm income, leaving closures as the only option for some producers.
Farm-Level Takeaway: Bankruptcy filings reflect prolonged margin pressure, rising debt, and limited financial flexibility across farm country.