New data from USDA’s Economic Research Service confirms a decline in the farm Chapter 12 bankruptcy rate. In 2022, the Chapter 12 bankruptcy rate reached the lowest level in nearly two decades, with 0.78 bankruptcies per 10,000 farms.
Under Chapter 12 bankruptcy, a financially distressed family farmer can propose and carry out a plan to repay their debts fully or partially. The total number of these bankruptcies is an indicator of financial stress in the farm sector. In 2003, the annual bankruptcy rate reached a high of 3.3 per 10,000 farms and then declined to a low of 0.5 per 10,000 farms in 2004. After 2010, the bankruptcy rate declined until 2014 but increased again in 2015, with another peak in 2019 at 2.9 bankruptcies per 10,000 farms.
Since then, bankruptcies have declined to the lowest level in two decades after 2004. Wisconsin had the highest rate at 5.66 per 10,000 farms, followed by Nebraska and Kansas.