WASHINGTON — Farm bankruptcies are on the rise in Iowa and Nebraska in the wake of this year’s catastrophic weather events and rocky trade environment.
A new report by the American Farm Bureau Federation shows a 24% increase in Chapter 12 bankruptcies nationwide over the previous year.
“While filings remain well below the historical highs experienced in the 1980s, the trend is a concern,” the report stated. “The support provided to farmers in 2018 and 2019 is expected to alleviate some of the financial stress, however, not all farmers will benefit from trade assistance, farm bill programs, crop insurance or disaster aid. As a result, it could take some time for the financial relief to manifest in the farm bankruptcy trends.”
The report covers the 12-month period ending Sept. 30 and compares it to the one before.
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Several Midwestern states have been particularly hard-hit. There were 24 farm bankruptcies in Iowa and 37 in Nebraska. Those represent a year-over-year increase of 10 in Iowa and 6 in Nebraska.
The report cites U.S. Department of Agriculture estimates that 2019 farm income of $88 billion — that’s 29% below the record high set in 2013. And a lot of that money is coming to farmers via Uncle Sam.
“Nearly 40% of that income — some $33 billion in total — is related to trade assistance, disaster assistance, the farm bill and insurance indemnities and has yet to be fully received by farmers and ranchers,” according to the report.
Farm debt is projected to reach a record high $416 billion and farmers are taking longer to service their debt.
The highest number of farm bankruptcies was in Wisconsin, which saw 48. Nebraska came in second, tied with Georgia and Kansas.
Rising bankruptcy filings reflect a number of challenges currently weighing on the agriculture sector.
President Donald Trump’s tariff wars with China have contributed to depress demand for soybeans and other crops, for example.
Iowa and Nebraska producers also say they’ve struggled with the administration’s generous granting of waivers to federal ethanol requirements that have helped push down grain prices.
And Mother Nature has a hand in the situation with Iowa and Nebraska experiencing massive flooding earlier this year that affected many producers.
Steve Nelson, Nebraska Farm Bureau president, said in a statement that it’s concerning any time a farm or ranch goes under, and it’s no secret that agriculture faces challenges.
“The flooding and blizzards that impacted so many in our state have not helped the situation,” Nelson said. “That’s why Nebraska Farm Bureau continues to push for trade deals, like USMCA, that can bring some certainty and opportunities to agriculture markets. Even when these deals go into effect, it could take some time to reap the full benefits, which is why we need to lock deals in place as soon as possible.”