The American Farm Bureau's chief economist isn't shocked
that the number of farmers filing for Chapter 12 bankruptcy has risen again.
Between September 2018 and 2019, 580 farmers filed for Chapter 12 bankruptcy,
data from U.S. Courts says. That number is the highest since 2011, when 676
farmers filed for bankruptcy.
Given America's ag economics, seeing these bankruptcy
figures rise makes sense, said John Newton.
"We've had a tough time in the farm economy the last
few years," he told Farms.com. "It's not an alarming trend, but it's
one that is moving in the wrong direction."
Low commodity prices play a key factor in a farm's financial
stability. Almost 50 farms in Wisconsin, for example, filed for Chapter 12
between September 2018 and 2019.
"I think that's primarily due to the low milk prices
we've seen since 2014 and 2015," Newton said. "The trade war lowered
commodity prices and increased (market) variability."
In November 2014, U.S. dairy producers could earn around
US$23 per hundredweight. As of September 2019, that price had dropped to around
US$19.30 per hundredweight.
Multiple factors could help the bankruptcy figures decline.
The financial assistance packages the Trump administration
announced for the past two years helps some, "but not all farmers were
eligible for trade aid," Newton said.
Creating more opportunities for U.S. farm products is a
surefire way to ensure farm finances are stable.