COVID-19 Will Likely Push Farm Bankruptcies Higher
- Given the challenges to the farm economy in recent years, i.e., low commodity prices, retaliatory tariffs and natural disasters, it’s no surprise that farm bankruptcies continue to rise. While well below the historical highs of the 1980s, Chapter 12 family farm bankruptcies for the 12-month period ending March 2020 totaled 627 filings, a 23% increase from the previous 12 months, according to recently released data from the U.S. Courts. Chapter 12 bankruptcy filings have increased for five consecutive years, and the 627 filings over the previous 12 months is the third-highest total over the last 20 years – behind 743 filings in 2011 and 632 filings in 2003. The continued increase in Chapter 12 filings coincides with recent changes to the bankruptcy rules in 2019's Family Farmer Relief Act, which raised the debt ceiling to $10 million (The Verdict Is In: Farm Bankruptcies Up in 2019).