Chapter 12 Bankruptcies on the Rise

In addition to the melancholy agricultural outlook contained in recent Federal Reserve District agricultural surveys, an update last week from the Federal Reserve Bank of Minneapolis pointed to troubling data regarding Chapter 12 Bankruptcies in the District.  In addition, recent news articles have also discussed some variables that could impact the state of the U.S. agricultural economy as the 2018 harvest draws to an end. A recent update from the Federal Reserve Bank of Minneapolis (“Chapter 12 Bankruptcies on the Rise in the Ninth District“), by Ronald A. Wirtz, stated that, “It’s no longer a news story that crop and livestock prices are depressed, given their current multiyear persistence. Feedback from farmers, agricultural lenders, suppliers, and other interests in the ag sector, gathered informally by the Minneapolis Fed over the past year or so in meetings and other venues, has suggested that farm balance sheets are increasingly stressed.“And that nagging economic strain of low commodity prices on farmers and ranchers—compounded for some by recent tariffs—is starting to show up not just in bottom-line profitability, but in simple viability.