NASHVILLE, TN- Farm bankruptcies are rising in 2025, signaling a return to the financial pressures that plagued producers before the pandemic, according to economists with the University of Arkansas System Division of Agriculture. Between April 1, 2024, and March 31, 2025, 259 Chapter 12 farm bankruptcies were filed in the United States. First-quarter filings this year already outpaced the same period last year.
Chapter 12 of the federal bankruptcy code allows family farmers to restructure debt and avoid liquidation, unlike Chapter 7. The increase in filings reflects a mix of challenges facing producers, including lower commodity prices, persistently high input costs, and tighter credit availability.
Extension economist Ryan Loy said the data reflects conditions last seen in 2018 and 2019. Fellow economist Scott Stiles noted that while commodity prices have returned to earlier levels, input costs like fertilizer, diesel, and seed remain elevated, with little relief in sight. He also cited global trade uncertainty and adverse weather as additional pressure points.
Ag Resource Management’s Ashley Arrington told AgWeb that many row crop producers have depleted working capital reserves and failed to make financial adjustments last year, worsening the strain. A growing number of producers have exited farming entirely, she said.
The Federal Reserve Bank of Chicago confirmed worsening credit conditions. In the first quarter of 2025, repayment rates for non-real-estate farm loans dropped sharply compared to the same period in 2024. Nearly 40% of ag lenders reported lower repayment rates, and none saw improvement. Meanwhile, loan renewals and extensions increased, and the availability of ag lending funds continued to decline.