Despite billions of dollars in federal financial help, farm bankruptcies rose nearly 20 percent in 2019 as 595 family farms filed Chapter 12 petitions, according to data from the American Farm Bureau.
The 2019 total was the highest level since 2011’s 637 Chapter 12 filings, in the aftermath of the Great Recession.
In Iowa, there were 27 farm bankruptcies last year, up from 13 Chapter 12 filings in 2018.
On a year-over-year basis, Chapter 12 filings nationally have increased for five consecutive quarters.
Farm bankruptcies were at or above decade-high levels in Iowa as well as in Illinois, Kansas, Minnesota, Nebraska, New Hampshire, Ohio, South Carolina, South Dakota and Wisconsin.
The continued rise in farm bankruptcy filings was anticipated due to a multi-year downturn in the farm economy, record farm debt of $415 billion, headwinds on the international trade front and changes in bankruptcy rules.
The 2019 Family Farmer Relief Act raised the debt ceiling to $10 million from $4.2 million, enabling more farmers to file for Chapter 12 relief.
Farmers have struggled amid U.S. trade talks with Mexico and China, with soybean exports especially hit hard by retaliatory tariffs by China that initially were imposed in 2018.
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The Trump administration’s Phase One accord with Beijing stipulates China will purchase up to $200 billion in U.S. goods, including an estimated $30 billion to $40 billion in agricultural products such as soybeans and pork.
President Trump on Wednesday signed the U.S.-Mexico-Canada Agreement, which binds the three trading partners for at least 16 years.
Canada and Mexico are the two top export markets for U.S. food and agricultural products, totaling almost $40 billion last year.