(NewsNation) — Hit with high interest rates and labor shortages, more American farmers are filing for bankruptcy, according to new data from the University of Arkansas.
Researchers found that more than 250 farms filed for Chapter 12 bankruptcy between April 2024 and March of this year, marking a sharp increase in financial distress across the agricultural sector.
“We’ve already beat last year in terms of Q1 national filings,” said Ryan Loy, an economist at the university. “Once you see this on a national level, it’s a clear sign that financial pressures that we saw before in the 2018 and ‘19 are kind of reemerging.”
US food banks struggle as demand surges, federal support shrinks
In the first quarter of 2025, 88 farms filed for bankruptcy, nearly double the number in the same period last year. The spike reflects growing concern among economists and farm advocates that family farms are being pushed to the brink.
Analysts: Farms in a financial pressure cooker
Economists say farmers are caught in a “financial pressure cooker.” With prices for items such as seeds and fertilizers relatively high, other analysts suggest high interest rates are also contributing to farmers’ difficulties.
“A lot of these operating loans that might have been financed in the 3, 4 or 5% are now getting financed in the 7 to 9% interest rates,” said Quinn Kendrick, general counsel for Peoples Company, which handles farmland transactions.
“Then you have an increase in overall input costs, and combine that with lower commodity prices, it just results in farmers having no other option but to seek a Chapter 12 bankruptcy filing to continue their operation,” Kendrick said.
In 2019, there were 599 Chapter 12 filings across the United States, the highest in at least the past decade. However, by 2021, that number declined to 276, which economists attribute to “pandemic-related assistance and stronger commodity prices.”
Unpasteurized vs. pasteurized: What to know about food safety
Next generation is facing more stress: Farmer
Despite the increase, Missouri farmer Blake Hurts tells “NewsNation Live” that overall bankruptcy numbers remain relatively low.
He said farmers operate under a variety of financial structures, but he expressed concern for younger farmers who are just starting out.
“Those who borrowed heavily to get started in farming are now feeling a lot of stress,” he said, adding that the biggest concern right now is for the next generation of farmers.
Farmers: ICE raids make it hard to find workers
Labor shortages have also contributed to the crisis. Farmers have said that recent increases in immigration enforcement efforts, including workplace raids by Immigration and Customs Enforcement officers, make it more difficult to find and retain workers.
President Donald Trump has acknowledged that farmers are being hurt and temporarily paused ICE enforcement actions at farms, hotels and restaurants last month.
However, that directive was quietly reversed about a week later, creating more uncertainty for farm owners trying to manage their workforce.
In response to farmers’ concerns, Agriculture Secretary Brooke Rollins has acknowledged the strain on producers. Speaking to NewsNation, she said she’s heard directly from farmers who are barely breaking even.
“When they’re operating in the red or just above profitability, that’s not sustainable for these third, fourth, and fifth generation farms,” she said. “We know that at the end of this process, that America’s farmers and ranchers will be the best and biggest beneficiaries of this president’s realignment.”
