UNITED STATES - The United States Department of Agriculture’s (USDA) Economic Research Services recently highlighted data showing that farm sector Chapter 12 bankruptcies in 2022 were at their lowest since 2004.
“In 2022, the Chapter 12 bankruptcy rate reached the lowest level in nearly two decades, 0.78 bankruptcies per 10,000 farms,” the organization stated in a recent release. “Under Chapter 12 bankruptcy, a financially distressed family farmer can propose and carry out a plan to repay their debts fully or partially, and the total number of these bankruptcies is an indicator of financial stress in the farm sector.”
According to USDA, the annual bankruptcy rate reached a high of 3.3 per 10,000 farms in 2003, and then declined to a low of 0.5 per 10,000 farms in 2004. After 2010, the bankruptcy rate declined until 2014 but started to increase again in 2015 with another peak in 2019, showing 2.9 bankruptcies per 10,000 farms. Since then, bankruptcies have continued to decline to the lowest level in two decades after 2004.
U.S. courts data shows the number of bankruptcies not only declined nationally but also in the major agricultural States. In 2022, 0.78 farms per 10,000 filed for Chapter 12 bankruptcy, almost two-thirds lower (61 percent) than the 10-year annual average of 2 bankruptcies per 10,000 farms.
Examining the 10-year average bankruptcy rate for 2013–2022 by region, USDA noted that Wisconsin had the highest rate at 5.66 per 10,000 farms, followed by Nebraska and Kansas, and Texas had the lowest average bankruptcy rate among the top 10 agricultural States at 0.77 per 10,000 farms.
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