Farmers Filing Chapter 12 on Rise

More farmers likely will be filing Chapter 12 bankruptcy in 2018, as they continue to struggle with costs of production exceeding commodity prices, ag lender CoBank said in a new report. The CoBank report, "Forces that will shape the U.S. rural economy in 2018," said commodity price depression from surpluses around the world will make for another belt-tightening year for farmers who will continue to see working capital diminish.As a result, CoBank said, more producers are likely to turn to Chapter 12."Farmer solvency is an increasing concern in some regions," the report said."Wheat and dairy producers are among the hardest hit in this down cycle, as evidenced by an increase in Chapter 12 bankruptcy filings in Kansas and Wisconsin. Chapter 12 bankruptcies, which last year reached the highest level since 2012, are expected to accelerate in 2018 in the absence of a major upward correction in farm gate prices."The number of Chapter 12 filings has been on the rise since 2014, according to CoBank. There were about 380 filings in 2014. That number spiked to just more than 500 in 2017, according to the report.