Farm bankruptcies in the United States increased during the last year, with Chapter 12 filings rising 46% to 315, up from 216 in 2024. Regional Hotspots: The Midwest and Southeast accounted for over two-thirds of all filings, with states like Arkansas, Montana, and Pennsylvania seeing especially large jumps (e.g., Montana up 200%, Pennsylvania up 160%).
American farmers are taking on larger operating loans with longer repayment terms, and total farm debt is projected to reach a record $624.7 billion in 2026. Interest expenses are also at decade-high levels, further straining operations. Farm-specific foreclosures are part of a broader trend of financial distress in rural America.
The main factors include depressed commodity prices, high input costs, rising interest rates, and reduced government support. The outdated Farm Bill and stalled ad hoc assistance have exacerbated the situation. Analysts expect farm foreclosures and bankruptcies to remain elevated, especially if commodity prices stay low and borrowing costs remain high. Some farmers are already selling land or equipment to shore up working capital.
Broader U.S. foreclosure activity (all property types) increased 14% overall in 2025, reflecting rising financial stress across the economy. Farm foreclosures are a subset of this trend — and notably, the surge in operating loans, record debt loads, and declining repayment capacity signal that formal farm foreclosures are likely to accelerate through 2026.
Net farm income is $48 billion (24%) below 2022 record highs. Total farm debt projected at $624.7 billion in 2026 — an all-time record high. 160,000+ farms have closed since 2017; bankruptcy stats undercount the full scope of losses
During the Great Depression, the number of farms reached its historic peak of 6.8 million in 1935 after many unemployed city dwellers moved back to rural areas to engage in subsistence farming to survive the economic crisis. After World War II, technological advances and mechanization allowed farmers to manager large plots of land. As farm ownerships were consolidated into ever-larger operations, the number of individual farms plummeted from over 6 million in 1940 to approximately 2.3 million by 1974 and 2 million in the 2020s.
In the current economy, in 2026, per-acre losses are severe across major crop categories:
- Rice: Losses exceeding $200/acre even after federal assistance
- Corn, soybeans, wheat: Accumulated losses of ~$44 billion projected over 2025–26
- Milk: Receipts forecast to fall $6.2 billion (–12.8%)
- Eggs: Receipts down $17.3 billion (–66%)
Agricultural economists note that farm bankruptcies are a lagging indicator, meaning that more filings are likely in 2026 even if commodity prices stabilize. USDA forecasts further net farm income decline in 2026 (–2.6% in real terms), with farm production expenses rising to $477.7 billion.
Total farm debt surpassing $624.7 billion will push more producers past the point of viability. The tariff environment is adding additional uncertainty, disrupting export markets and elevating input costs simultaneously. The American Farm Bureau warns of a “generational downturn” not seen in severity since the 1980s farm crisis.
March 12, 2026
