Farm bankruptcies are up 24% this year as farmers grapple with the effects of Donald Trump’s trade war and the devastating weather challenges that delayed planting and hindered harvests, according to the American Farm Bureau Federation.
Meanwhile, nearly 40% of U.S. farm income this year will be provided by government insurance and taxpayer subsidies.
The states hit hardest by farm bankruptcies include Wisconsin, Georgia, Kansas and Nebraska, according to the federation, which is an independent, nongovernmental organization representing farmers and ranchers. More than 40% of the 580 Chapter 12 bankruptcies were filed in the Midwest.
The bankruptcy trend “is a concern,” the federation’s report said, as several farms on the bring of collapse will likely file for bankruptcy protection soon.
“I’m getting calls from farmers across the country that may not be at [the] Chapter 12 bankruptcy point, but they’re very close to it,” the federation’s chief economist, John Newton, told Oregon Public Radio on Monday.
“We’ve seen low crop prices, low livestock prices for a number of years now,” he said. “On the back of that we have the trade war where agriculture’s been unfairly retaliated against.”
Some $33 billion of an expected total $88 billion in farm income this year will be provided by trade assistance, disaster assistance, the farm bill and insurance indemnities, according to the federation. But much of that money is yet to be paid out.
Farm debt this year is also projected to be a record-high $416 billion, with $257 billion in real estate debt and $159 billion in other loans.
Trump has promised a deal soon with China. In a sign of goodwill, China purchased 50 million bushels of soy beans from the U.S. in the last two weeks. But that’s still 76% below purchasing levels before the trade war began, Newton pointed out.