A new American Farm Bureau Market Intel Report said Chapter 12 farm bankruptcies increased for the second year in a row, reaching 315 filings in 2025, a 46 percent increase from 2024.
The Midwest and Southeast filed 121 and 105 Chapter 12 cases, respectively, far outpacing any other regions. Deep crop losses across commodities common in those two regions have compounded after years of declining receipts and rising expenses.
Filing for Chapter 12 bankruptcy is a last resort for farmers who have incurred large debts to continue operating with increased flexibility for payments.
Midwest states with double-digit filings include Iowa with 18, Nebraska 17, Missouri and Wisconsin each had 16 filings, Minnesota with 13, and Kansas had 11.
The Federal Reserve Bank of Kansas City said farmers are taking out larger operating loans and taking longer to repay them.
USDA estimates that total farm debt will rise 5.2 percent to a record $624.7 billion this year.
Source: NAFB News Service
