Farm bankruptcies 2026 crisis warnings are growing louder, but the economists tracking the numbers are urging nuance. Chapter 12 filings — the bankruptcy tool designed specifically for family farmers — rose 46 percent to 315 in 2025, the third consecutive annual increase. That followed a 55 percent rise in 2024. Arkansas led all states in filings last year, the most this century for the country’s top rice-producing state. The Midwest and Southeast each saw bankruptcy filings jump roughly 70 percent from 2024. Montana saw a 200 percent increase. Pennsylvania was up 160 percent.
Yet a new Farmer Mac report reviewed by Agri-Pulse calls the situation a “difficult cycle, not yet a crisis.” The report notes that the current rise in filings may be a reversion from an exceptionally favorable period — Chapter 12 filings hit their lowest level in nearly two decades in 2022, during the commodity price boom — rather than the beginning of something unprecedented. Net farm income across the crop sector is declining, but remains well above the historical average when adjusted for inflation. “The current stress is real and concentrated, not a broad-based agricultural collapse,” the report states.
Farm bankruptcies 2026 crisis debate reflects a tale of two agricultural economies
The starkest feature of the current farm economy is the split between livestock and crops. Jackson Takach, Farmer Mac’s chief economist and vice president of strategy, research and analytics, described strong beef demand, tight cattle supply, and relatively low input costs in the livestock sector as combining for a “pretty favorable economic outlook.” At the same time, corn and soybean growers are entering their fourth consecutive year of expected negative returns. A volatile global trade landscape, rising fertilizer costs driven by the Iran war, and intensifying competition from South American exporters are all squeezing crop margins. USDA projects corn costs $5 per bushel to grow but will sell for $4.20. Soybeans cost $12.27 to produce but are expected to sell for $10.30.
Ryan Loy, extension economist at the University of Arkansas Division of Agriculture, notes that some Delta farmers still have unsold rice from 2024 sitting in their bins, even as the 2026 growing season begins. On the fertilizer price shock, Loy drew a parallel to the surge that followed Russia’s invasion of Ukraine in 2022. He called it the “rocket-and-feathers effect” — prices spike like a rocket when a disruption hits, but fall back like a feather. The lesson is that even after the Strait of Hormuz reopened partially on April 17, urea prices are likely to stay elevated for longer than markets expect. For a farmer-level view of what the fertilizer crisis means on the ground, Agroinformacion covered the AFBF survey finding 70% of farmers cannot afford all the fertilizer they need this season.
Total farm debt heading to a record $624.7 billion in 2026 as working capital shrinks
The debt picture behind the bankruptcy numbers is sobering. USDA estimates total farm sector debt will rise 5.2 percent to a record $624.7 billion in 2026. Interest expenses across the farm economy are projected to reach a record $33 billion. Nearly 40 percent more new farm operating loans were opened in the fourth quarter of 2025 than in 2024. The average operating loan in 2025 was 30 percent larger, with repayment timelines three months longer than the year before. Working capital — cash available to cover operating expenses after near-term debt — is projected to fall from $154.9 billion in 2025 to $140.6 billion in 2026.
The Farmer Mac report argues that today’s situation differs from the 1980s crisis in key ways. Farmland values have not collapsed. Debt-to-asset ratios, while rising, remain well below the dangerous levels of the mid-1980s. Crop insurance, FSA loan programs, and countercyclical payments provide safety nets that did not exist in the same form during the last major farm crisis. But the report also warns that the longer the cycle persists, the more farmers who started operations in the last two years — those who entered at high-cost levels — will find themselves unable to absorb continued losses. The original reporting was published by Agri-Pulse on April 22, 2026.