Farm Bankruptcies Down Dramatically in 2021

For the first time in the last decade, every region in the United States had fewer Chapter 12 farm bankruptcies in the last year, compared to the year before.  The decrease in bankruptcy filings is a noteworthy shift given the increases in the number of bankruptcies over the previous three years.

The region with the largest percentage decrease in Chapter 12 filings was the Northeast – Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont - which had a decrease of 82% from 2020. The region with the largest decrease in Chapter 12 filings by absolute number was the Midwest – Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota and Wisconsin, which collectively had 144 bankruptcy filings in 2021. Other parts of the country also had significant declines in the number of filings in 2021.

This decline is certainly worthy of celebration, however, while the last year has brought higher commodity prices for some, it has most certainly brought higher input costs for all. How 2022 compares to 2021 will determine if this is a trend which has some staying power.

EDITOR’S TAKE:

Further proof that farmers and ranchers are doing well financially. In 2021, commodity prices and yields were favorable, land values increased across the country and government payments provided a solid base for overall net income. While 2022 is expected to see higher input costs, which will squeeze margins some, net farm income is still forecast to be well above the ten-year average. All of this adds up to a solid outlook for farmers/ranchers, which makes them great customers as things return to more “normal” conditions in the auto/truck retail world. That is precisely why we continue to encourage you to use all of your available tools – service, parts, AgPack – to encourage farmers/ranchers to make their next purchase or lease from you, a CAD member.