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Farm bankruptcies decline in first half of 2018

Chapter 12 bankruptcies for farmers and fishermen during the first half of 2018 have dropped nine percent compared to last year but the American Farm Bureau Federation says that doesn’t mean the farm economy is improving.

“There’s a whole lot of uncertainty around all of these trade situations.  The crop is still in the ground and growing so we don’t know yet what Mother Nature’s going to deliver to us.”

Chief economist John Newton tells Brownfield says number of farm bankruptcies are higher than last year in the Corn Belt, and in Wisconsin and New York.  “That likely reflects the poor environment we’ve seen on crop prices as well as dairy prices this year.”

Newton tells Brownfield while the USDA hasn’t released numbers since January on how many dairy farmers have closed this year, that could be a factor.  “Anecdotally we are hearing stories about a lot of dairies closing their doors.”  He says as dairies face a supply/demand imbalance, if a farm closes it doesn’t mean they went bankrupt.  “Maybe it’s just some farms taking the opportunity to get out of the business, and selling the farm and their cows and avoiding bankruptcy.”

Newton says he’ll be watching USDA’s net farm income expectations which will be released at the end of the month and how that correlates to the bankruptcy situation.

Filings were highest in Wisconsin, at 26, followed by Georgia, Kansas and Nebraska which had 16 each.  Georgia saw the largest decline in bankruptcies from 2017, down nine, followed by Michigan, down seven.

AUDIO: Interview with John Newton