Northwest Reports 70% Uptick In Farm Bankruptcies

According to the American Farm Bureau Federation, between June 2019 and June of this year, 580 farm bankruptcy filings were reported nationwide, an 8% year over year increase AFBF Chief Economist John Newton said the year to year numbers don’t tell the entire story.

“It’s a little bit of a mixed bag, and what we see is during the second quarter of 2020, Chapter 12 family farm bankruptcies actually slowed to about 115 filings. That’s 50 filings below what we saw in the second quarter of 2019. But on an annual basis, Chapter 12 farm bankruptcies remain eight percent higher than prior-year levels.”

The Northwest was one of the hardest hit regions, with bankruptcies during that 12 month period increasing 70%. Washington reported nine of those bankruptcies, with Idaho accounted for eight and Oregon reported 19. Other regions that saw big jumps in the number of filings included the Midwest and Southeast.

Newton added without further assistance for the struggling Ag sector, another rise in Chapter 12 bankruptcy filings is possible.

“One of the things we saw with COVID-19 was many things had to go virtual, so I think that likely played a role in the slowing number of bankruptcy filings we saw this past quarter. I think the CARES Act stimulus certainly helped. That stimulus is set to expire, and I think we could see Chapter 12 bankruptcies accelerate if we don’t see the House and Senate come up with another stimulus package, not only for the broader U.S. economy, but for agriculture.”

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