AFBF expects an increase in Chapter 12 bankruptcies
August 6, 2020 By Nicole Heslip Filed Under: Ag economy, Economy, Farm Bureau, News
The head economist at American Farm Bureau says he suspects the rate of Chapter 12 farm bankruptcies during the first half of the year has slowed because of the logistical difficulties to file during the pandemic.
“When you look overall across all bankruptcy chapters, bankruptcies were down 40 percent this last quarter, so I think there’s obviously some logistical issues that contributed to the slow pace.”
John Newton tells Brownfield family farm bankruptcies are down 10 filings compared to the first six months of 2019 but are up eight percent over the past 12 months.
“I think we did see some cases where farmers put off filing for Chapter 12 so they could get access to some of the stimulus in the CARES program, but most likely we’ll see those folks come back.”
While information is not reported on commodities, he says Wisconsin reporting the most bankruptcies in the country is pretty telling for the dairy industry.
“When Wisconsin’s led the country for three straight years, in terms of the number of Chapter 12 bankruptcies, there’s some real challenges for the dairy industry, especially some of those small to medium-sized dairy operations.”
Newton says without additional support for producers, he expects an acceleration of farm bankruptcies in the immediate future as relief program payments come to an end.
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