Rising Farm Debt Fuels Surge in Bankruptcies in 2024

Farmers Face Credit Challenges Amid Declining Revenues

The agricultural sector faced increased financial distress in 2024, with Chapter 12 farm bankruptcies rising by 55% from the previous year. The U.S. Courts reported 216 filings, signaling the end of a four-year decline and raising concerns about long-term farm viability.

Most regions experienced a surge in bankruptcy filings, with the Midwest seeing the highest increase at 71 cases. The Southeast followed closely with 62 cases, while Michigan saw the largest state-level spike, going from zero filings in 2023 to 12 in 2024. California led in total bankruptcies with 17 cases.

Falling crop revenues and rising debt have contributed to worsening credit conditions. Corn and soybean receipts are expected to decline further in 2025, while cotton was the only major crop to see revenue growth.

Meanwhile, farm operating loans increased by 25% in 2024, with total farm debt expected to reach $562 billion in 2025.

“As the farm economy continues to be squeezed by decreased receipts and increased expenses, farm financials will be strained,” an industry report warned. Despite federal aid, many farmers struggle to secure loans, and some may be forced to close before bankruptcy becomes an option.

The farm bill remains a key topic of discussion, as policymakers evaluate ways to support struggling farmers. Many await the release of economic relief from the American Relief Act of 2025, hoping for short-term financial stability while long-term solutions are debated.