U.S. farm bankruptcies have already exceeded 2024 totals in just the first quarter of 2025, signaling a return to the financial pressures that plagued the agricultural sector before the pandemic, according to University of Arkansas experts.
With 259 Chapter 12 bankruptcy filings nationwide through March, farmers are facing challenges reminiscent of the difficult period in 2018-2019, said Ryan Loy, extension economist for the University of Arkansas System Division of Agriculture.
"We've already beat last year in terms of national filings," Loy said. "It's a clear sign that financial pressures that we saw before in the 2018 and '19 are kind of re-emerging."
Arkansas has been particularly hard hit, accounting for 26.8% of all filings in the 8th U.S. District Court this year. More than 60 farm auctions have been held in the state since December.
Chapter 12 bankruptcy, designed specifically for farmers and family fishermen during the 1986 farm crisis, allows agricultural operations to reorganize and repay all or part of their debts rather than liquidating assets under Chapter 7.
Scott Stiles, extension economics program associate, attributes the increase to multiple factors.
"Commodity prices are back at levels where they were in the 2018-2019 era," Stiles said, noting that input costs for seed, fertilizer, pest management and diesel remain stubbornly high.
Weather challenges and trade environment concerns have compounded the problem, leading farmers to defer major investments. Tractor sales have fallen 13% year over year, while combine sales have plummeted 48%.
The impacts extend beyond farms to entire rural communities.
"Your input suppliers, your equipment dealers, anybody who provides a service to farmers is impacted by this, too," Stiles said.
"If the farmers are hurting, those communities are going to hurt too," added Loy.
The current pace suggests 2025 could approach or exceed the decade-high 599 Chapter 12 filings recorded in 2019.
