Farm Bankruptcies Rise Again as Financial Pressure Builds Across U.S. Agriculture
Bankruptcy filings among FSA borrowers are climbing again, exposing financial pressure in dairy, cattle and major crop-producing regions.
U.S. farm bankruptcy filings among borrowers participating in Farm Service Agency loan programs increased again in 2024 and 2025, reversing much of the improvement that followed the 2019 peak, according to an analysis published by Farmdoc in August 2026 using USDA FSA administrative data. The shift matters because bankruptcy is a lagging indicator of farm financial stress, suggesting that lower commodity prices, elevated interest rates, high input costs and tighter operating margins accumulated over previous production cycles are now appearing in court filings and farm credit portfolios.
The study identified roughly 2,900 FSA direct-loan borrowers and 157 guaranteed-loan borrowers who filed for bankruptcy from 2015 through 2025. The large difference partly reflects the composition of the programs. Direct loans generally serve producers unable to obtain reasonable commercial credit, while guaranteed loans are originated by private lenders with FSA covering as much as 95% of potential losses. Guaranteed-loan bankruptcies may also be underreported because FSA depends on private lenders to notify the agency when a borrower files.
Among guaranteed-loan borrowers entering bankruptcy, 87% used Chapter 12, the bankruptcy provision designed primarily for family farmers and fishermen. Chapter 13 accounted for 8.3%, Chapter 11 for 3%, and Chapter 7 for about 1%. Unlike studies that rely solely on Chapter 12 as a proxy for agricultural distress, the Farmdoc analysis examined bankruptcies under all chapters when the producer was an active FSA direct or guaranteed loan customer.
FSA Direct-Loan Borrowers Reporting Bankruptcy by Year
| Year | Borrowers | Trend |
|---|---|---|
| 2016 | ?200 | Starting level |
| 2017 | ?360 | Sharp increase |
| 2018 | ?350 | Elevated |
| 2019 | 632 | Peak |
| 2020 | ?105 | Sharp decline |
| 2021 | ?65 | Decline |
| 2022 | ?15 | Low |
| 2023 | ?40 | Recovery begins |
| 2024 | ?60 | Increase |
| 2025 | ?95 | Further increase |
Source: FSA direct farm loan program administrative data, 2015-2025; Farmdoc. Approximate figures are visually derived from the chart where exact values were not stated.
FSA Guaranteed-Loan Borrowers Reporting Bankruptcy by Year
| Year | Borrowers | Trend |
| 2016 | 14 | - |
| 2017 | 18 | Increase |
| 2018 | 22 | Peak |
| 2019 | 19 | Decline |
| 2020 | 17 | Decline |
| 2021 | 18 | Increase |
| 2022 | 10 | Sharp decline |
| 2023 | 9 | Decline |
| 2024 | 7 | Low |
| 2025 | 7 | Stable |
Source: FSA guaranteed farm loan program administrative data, 2015-2025; Farmdoc.
Farm Income Cycles Reveal Where Financial Stress Is Building
Bankruptcy trends closely followed earlier movements in farm income. Corn, soybean and wheat prices declined substantially from 2011 through 2016, while retaliatory tariffs disrupted U.S. agricultural export markets in 2018 and 2019. By 2019, U.S. farm-sector debt had reached a record and national farm bankruptcy filings were at their highest level since 2011. Because producers typically attempt refinancing, asset sales and other restructuring before filing, bankruptcy statistics tend to reveal financial problems only after stress has persisted for an extended period.
Conditions improved as commodity prices recovered in 2021 and 2022 and federal government payments helped push U.S. net farm income to a record in 2022. FSA debt relief and set-aside assistance from 2022 through 2024 also reduced outstanding debt for some direct-loan borrowers. But crop prices softened again from 2023 through 2025 while production expenses remained elevated. That combination squeezed farm margins and coincided with the renewed increase in direct-loan bankruptcies during 2024 and 2025.
Geography shows that the financial pressure is far from evenly distributed. Wisconsin accounted for nearly 10% of direct-loan borrowers filing bankruptcy, followed by Kentucky at 6.6% and Arkansas and Texas at 5.7% each. Oklahoma, New York, Georgia and Pennsylvania also represented sizable shares. Wisconsin's position is closely connected with dairy, where producers have faced periods of weak milk prices alongside higher interest, equipment, labor, fuel and land costs.
States With the Largest Shares of FSA Direct-Loan Bankruptcies
| State | Share | Rank |
| Wisconsin | ?9.8% | 1 |
| Kentucky | 6.6% | 2 |
| Arkansas | 5.7% | 3 |
| Texas | 5.7% | 4 |
| Oklahoma | 4.9% | 5 |
| New York | 4.8% | 6 |
| Georgia | 4.7% | 7 |
| Pennsylvania | 4.3% | 8 |
| North Carolina | 3.7% | 9 |
| Louisiana | 3.7% | 10 |
| Michigan | ?3.4% | 11 |
| Tennessee | ?3.2% | 12 |
| Minnesota | ?3.0% | 13 |
| Virginia | ?2.5% | 14 |
| Mississippi | ?2.4% | 15 |
| Puerto Rico | ?2.3% | 16 |
| Alabama | ?2.1% | 17 |
| South Carolina | ?2.0% | 18 |
| California | ?2.0% | 19 |
| Kansas | ?1.9% | 20 |
| Florida | ?1.8% | 21 |
| Missouri | ?1.7% | 22 |
| Washington | ?1.7% | 23 |
| Nebraska | ?1.5% | 24 |
| Maine | ?1.1% | 25 |
Source: FSA direct farm loan program administrative data, 2015-2025; Farmdoc. The chart includes states accounting for more than 1% of filings. Approximate values are visually derived where exact percentages were not stated.
The geographic concentration was even stronger among guaranteed loans. Wisconsin represented 24.5% of guaranteed-loan bankruptcy filers, or nearly one in four, followed by Minnesota at 10.8%. Georgia and Kansas each accounted for 9.5%. Financial stress was also visible across the South. Arkansas led the nation in Chapter 12 filings in 2025, while its rice producers faced severe economic losses amid declining crop receipts and persistently high production expenses.
States With FSA Guaranteed-Loan Borrowers Reporting Bankruptcy
| State | Share | Relative Level |
| Wisconsin | 24.5% | Very high |
| Minnesota | 10.8% | High |
| Georgia | 9.5% | High |
| Kansas | 9.5% | High |
| Texas | 5.8% | Moderate |
| Pennsylvania | 4.5% | Moderate |
| Arizona | 4.2% | Moderate |
| Colorado | ?3.3% | Moderate |
| Nebraska | ?2.9% | Low |
| Illinois | ?2.5% | Low |
| Kentucky | ?2.5% | Low |
| Michigan | ?2.2% | Low |
| Montana | ?2.2% | Low |
| Oregon | ?2.1% | Low |
| Florida | ?1.7% | Low |
| Idaho | ?1.7% | Low |
| Louisiana | ?1.7% | Low |
| West Virginia | ?1.7% | Low |
| Iowa | ?1.3% | Low |
| New York | ?1.2% | Low |
| Virginia | ?1.1% | Low |
Source: FSA guaranteed farm loan program administrative data, 2015-2025; Farmdoc. Approximate percentages are visually derived from the original chart when not explicitly reported.
Commodity specialization provides another important warning signal. Among direct-loan bankruptcy filers, beef cattle and dairy/milk operations each represented about 20.1% of borrowers, substantially more than any other category. Other grain farming accounted for 8.8%, miscellaneous crops for 7.3%, cotton for 5.9%, corn for 5.4%, and vegetable and melon production for 4.3%. Beef cattle's prominence also reflects the composition of FSA direct lending, which serves many small farms, beginning farmers and producers with limited access to conventional agricultural credit.
FSA Direct-Loan Bankruptcies by Production Specialty
| Production | Share | Relative Exposure |
| Beef cattle | 20.1% | Very high |
| Dairy cattle/milk | 20.1% | Very high |
| Other grains | 8.8% | High |
| Miscellaneous crops | 7.3% | High |
| Cotton | 5.9% | Moderate |
| Corn | 5.4% | Moderate |
| Vegetables/melons | 4.3% | Moderate |
| Soybeans/oilseeds | ?4.0% | Moderate |
| Wheat | ?2.0% | Low |
| Nursery/tree production | ?1.7% | Low |
| Poultry | ?2.3% | Low |
| Hay | ?1.4% | Low |
| Apples/orchards | ?1.3% | Low |
| Potatoes | ?1.3% | Low |
| Tobacco | ?1.2% | Low |
| Hog production | ?1.0% | Low |
| Cattle feedlots | ?1.0% | Low |
| Grapes/vineyards | <1% | Low |
| Sheep/goats | <1% | Low |
Source: FSA direct farm loan program administrative data, 2015-2025; Farmdoc. Approximate values are visually derived where percentages were not stated in the accompanying analysis.
Dairy also stands out among guaranteed borrowers, although row crops represent a substantial portion of the exposure. Dairy-related categories together accounted for roughly one-quarter of bankruptcy filers, while corn represented 10.5%, soybeans 8.4%, cotton 7.1%, beef cattle 6.3%, poultry 4.2%, and other grain farming 3.8%. Cotton is particularly noteworthy: as of January 2026, estimated average state-level losses for the 2025 cotton crop exceeded $300 per acre, following losses in both 2023 and 2024.
FSA Guaranteed-Loan Bankruptcies by Commodity
| Production | Share | Relative Exposure |
| Dairy/milk | 14.6% | Very high |
| Dairy cattle | 12.1% | Very high |
| Corn | 10.5% | High |
| Soybeans/oilseeds | 8.4% | High |
| Cotton | 7.1% | High |
| Beef cattle | 6.3% | Moderate |
| Poultry | 4.2% | Moderate |
| Other grains | 3.8% | Low |
| Hay | ?2.1% | Low |
| Peanuts | ?2.1% | Low |
| Vegetables/melons | ?2.1% | Low |
| Goats | ?1.7% | Low |
| Hogs | ?1.3% | Low |
Source: FSA guaranteed farm loan program administrative data, 2015-2025; Farmdoc. Approximate values are visually derived from the chart where exact percentages were not stated.
For farmers, agricultural lenders, co-ops, agronomists and policymakers, the findings underscore that farm financial risk is neither random nor evenly distributed across U.S. agriculture. Commodity prices, interest rates, land and rental costs, input costs and farm-level debt interact differently across regions and commodities. Crop insurance, farm bill programs, FSA restructuring options and other risk-management tools can cushion shocks, but bankruptcy data show that financial problems accumulated over several crop years can eventually overwhelm an operation.
The findings also carry implications for USDA farm credit policy. Farmdoc points to more frequent borrower financial reviews, financial-management training, periodic assessments of total farm and household debt, and stronger partnerships with Extension and producer-outreach programs as possible tools. Beginning farmers and limited-resource borrowers warrant particular attention because they may have fewer financial reserves when farm income deteriorates. The recent increase remains well below the 2019 peak, but it provides an important warning as U.S. agriculture navigates tighter margins and expensive credit.
