THE American Farm Bureau says there has been a 13 per cent increase in US farm bankruptcies between July of last year and June this year.
Bureau lead economist John Newton told the Brownfield website there were 535 filings in the 12 months, with increases across just about every region of the country except the southeast.
The highest number of new bankruptcies were in the Midwest with 240 filings, mainly in Kansas, Minnesota, and Wisconsin.
The bureau says the deteriorating financial conditions are a result of several years of low farm income, a low return on farm assets, mounting debt, natural disasters, and continued retaliatory tariffs on US agricultural products.
Newton says dairy farmers were affected the most.
Wisconsin Agriculture Department figures show the state lost 741 dairy farms in the 12 months, but the data does not list the number of farms that went through Chapter 12 bankruptcy.
Meantime, the House of Representatives Judiciary Committee has passed a bill that will help more family farmers avoid liquidation or foreclosure, allowing them to stay in operation.
The legislation would raise the Chapter 12 operating debt cap from US$4.1 million (£3.4 million) to US$10 million (£8.3 million).
Although Chapter 12 has been a help to many family farmers, its US$4.1 million debt limit kept many more from using it.
China’s decision to stop buying US agricultural products in retaliation for the decision by President Donald Trump – who famously said trade wars are easy to win – to slap tariffs on all Chinese imports hasn’t helped.
Bureau executive vice-president Dale Moore says the announcement was a blow to farmers.
“I don’t know any other way to describe it,” he says. “It is a punch in the gut that is just taking away one of the most important and largest markets that we’ve spent decades developing. It’s back down in to where we were almost 20 years ago.”
Bureau president Zippy Duvall, in a letter to Congress, said farmers have experienced several consecutive years of weak commodity prices and the low profitability and poor farm income that follow.
“As a result, farmers and ranchers are watching their equity erode as their debt-to-asset ratios climb and debt financing reaches a 30-year high,” Duvall wrote.
Ohio State University said now more than ever, farmers might need help with how to keep their businesses afloat, how to find jobs off the farm, how to find clinicians to help deal with mounting frustration or despair that might come with running a business farming the land.