Midwest (U.S.)

Another Sign of Trouble in the Ag Economy: Farm Bankruptcies Are on the Rise

Wed, 23 Apr 2025 14:09:23 GMT

It’s no secret there’s trouble in the ag economy. As AgWeb reported in March , the Ag Economists’ Monthly Monitor found 62% of ag economists think the row crop side of agriculture is currently in a recession, and 85% think the situation will accelerate consolidation on farms and among agribusinesses. A new report from Bloomberg Law shows family farm bankruptcies are also on the rise.

Bloomberg Law’s Alex Wolf and Skye Witley recently reported that family farm bankruptcies had already increased by 55% last year compared to 2023. And there’s no sign of that slowing down, as Wolf and Witley report bankruptcies are trending even higher this year. That’s as farmers continue to grapple with depressed agricultural commodity prices and high input costs.

Farm bankruptcies are on the rise in the U.S.

(Bloomberg)

“And while much of the industrywide distress predates his second stint in the White House, (President Donald) Trump has quickly nudged more farmers closer to the brink of going under and created turbulence for producers trying to make ends meet,” Wolf and Witley reported in the Bloomberg Law story. “Unpredictable tariffs, immigration overhauls, federal program cuts and frozen Agriculture Department funding are now part of the discussions farmers are having as they seek financial help.”

The report shows the last time farm bankruptcy filings soared was in 2019, which was the height of the previous trade war with China. The previous Trump administration sent farmers more than $20 billion in Market Facilitation Program payments (MFP) to help cover export losses.

Following that financial aid to farmers, the report shows family farm bankruptcies, filed under Chapter 12 of the U.S. bankruptcy code, declined each year until 2024.

According to court records, the number of new cases in 2024 jumped to 216 from a near 20-year low of 139. The report also shows those filings have continued to speed up this year, with 82 cases filed over the first three months of 2025, which is nearly double the figure for the same period a year ago.

$10 Billion in ECAP Money to Farmers

More help is on the way, if not already on farm. That’s because the American Relief Act of 2025, which was passed by Congress late last year, authorized the $10 billion for ECAP payments to help offset losses growers incurred during the 2024 crop year. Those payments are being dispersed now, and farmers have until August to sign up.

According to Joe Glauber, former USDA chief economist and a current emeritus fellow with the International Food Policy Research Institute, direct payments have helped farmers. But the threat of farm bankruptcies, and the reality of financial pain if markets don’t improve, is still there

“Remember, we are getting a ton of money put into the sector this year from the bill that was passed by Congress in December,” Glauber told “AgriTalk’s” Chip Flory. “So that’s $31 billion coming in with $10 billion of that going out to farmers as direct income support to offset low margins. So, I don’t think we’ll see a lot of farms going out of business. But certainly, if these short, tight margins persist for a long time, then that’s going to affect people.”

Rural Bankers Show Concern

According to the Federal Reserve Bank of Chicago, the number of farm loans at risk of defaulting is the highest it’s been since 2020 as demand for non-real-estate farm loans has surged while repayment rates dropped. The Federal Reserve Bank of Chicago serves the Seventh Federal Reserve District , which includes Iowa, and most of Illinois, Indiana, Michigan and Wisconsin.

Ag lenders are also concerned. The most recent Rural Mainstreet Index (RMI) shows for the 19^th time in the past 20 months, the RMI sank below the 50.0 growth reading in April. This specific index surveys bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

While tariffs and Trump’s focus on trade are causing uncertainty, Ernie Goss, MacAllister chair in regional economics at Creighton University, says ag lenders are actually supportive of Trump’s tough stance on trade.

“The economic outlook for 2025 farm income remains weak, according to bank CEOs. Despite the negative fallout from tariffs, 75% of bankers support the tariffs on China, and 79.2% back the 90-day pause on other tariffs,” Goss told “AgriTalk’s” Chip Flory. “I’m an economist and we economists, we’re not very keen on tariffs and trade restrictions. Nonetheless, the bankers, three out of the four bankers are supportive of what the president’s doing there, and I would argue that the farmers are on the president’s side as well.”

The RMI also found rural bankers remain pessimistic about economic growth for their area over the next six months. The April confidence index increased to a weak 36.0 from March’s 30.4.

“Weak grain prices and negative farm cash flows, combined with downturns in farm equipment sales over the past several months, pushed banker confidence lower,” Goss said.

Cotton Hit Especially Hard

Cotton farmers are especially feeling the pain with younger farmers already having difficulty getting financed for this year. Cheap cotton prices and dwindling demand are just part of the problem. Input costs have climbed, and there’s no safety net to be found from a new farm bill. One Georgia farmer told Farm Journal that the current farm bill is irrelevant and worthless, and if a new one doesn’t get passed this year, the cotton industry is doomed.

“We’re going to plant cotton and don’t even have a clue if we’re going to get our money back,” says Franz Rowland, who grows cotton in Boston, Ga. “There’s no farm bill to support us, and the reference price is so low that it’s not anything that we can depend on. So, we’re going to put several million dollars in the ground and don’t even know if we’re going to get it back.”

As president and CEO of National Cotton Council (NCC), Gary Adams sees and hears the somber situation for U.S. cotton farmers from coast to coast. Adams says the outlook for 2025 is even worse than 2024.

“We’ve gone beyond just losing money now that we’re to the point of losing the farm,” he says. “Unfortunately, where the industry is, that’s what it looks like as we’re going into 2025.”

Darren Hudson is the Larry Combest endowed chair for agricultural competitiveness and director of the International Center for Agricultural Competitiveness at Texas Tech University. Hudson focuses on cotton, and on “AgriTalk” this week, he described why cotton farmers, and the entire cotton industry, is feeling the pinch.

“Cotton is fairly input intensive anyway, and so urea, nitrogen costs, all these chemical costs, they’re facing those just like every other farmer out there, but we’ve had three consecutive really bad moisture years,” Hudson told “AgriTalk.” “So, we have a long way to go to get back to what you think of as normal growing conditions.”

Hudson says three consecutive years of declining production due to drought isn’t just a problem for producers, it’s also the cotton infrastructure that relies on that crop.

“We’ve had three years, you know, that processing infrastructure all that stuff is strained and disappearing, and it’s getting harder and harder to farm as a cotton farmer out here,” says Hudson, who’s based in Lubock, Texas. “We’re not unusual compared to everybody else. We don’t want to sing a sad story, but I think all of ag is in a squeeze at this moment with [commodity] prices versus inputs.”

Is the Ag Industry Ripe for Consolidation?

Another reality for U.S. agriculture, while the majority of farms in the U.S. are small family farms, that sector doesn’t represent the majority of farm production today.

USDA ERS data shows while 88% of U.S. farms are considered “small family farms,” those farms only represent18.7% of the total U.S. value of farm production.

(Ben Brown, University of Missouri )

USDA ERS data shows while 88% of U.S. farms are considered “small family farms,” those farms only represent 18.7% of the total U.S. value of farm production.

On the other hand, while 3.4% of U.S. farms are “large-scale family farms,” that sector represents 51.8% of the total value of U.S. farm production.

Goodbye, La Niña? Eric Snodgrass Dissects What the Shift Means for Weather This Spring and Summer

Fri, 14 Mar 2025 21:12:50 GMT

La Niña is weakening, and the National Oceanic and Atmospheric Association (NOAA) expects neutral conditions to develop in the next month . But even with La Niña fading, meteorologists are still concerned about drought this spring and summer.

NOAA this week said forecasters expect ENSO-neutral conditions to develop in the next month and persist through the Northern Hemisphere’s summer. According to NOAA, La Niña’s signature is cooler-than-average surface water in the east-central tropical Pacific, stronger-than-average trade winds, and drier conditions over the central Pacific.

ENSO-neutral means conditions could be close to average, but Eric Snodgrass, Nutrien’s principal atmospheric scientist, says that doesn’t mean the weather will be normal this spring and summer.

“I do expect changes,” Snodgrass says. “Think about it like this: The previous winter was an El Niño winter, and it was very mild and very wet. So, we got into spring ’24 with tons of moisture. I mean, Iowa, Minnesota and South Dakota flooded out. Then we had this incredibly dry fall as the La Niña began, and it reached a peak twice. It actually hit a peak in December, and then a secondary peak about a month later at the end of January. It’s been fading ever since. The big question is, as we go into neutral conditions for this upcoming growing season, is it going to be one that paints a picture of precipitation extremes? Did it leave us with any sort of kind of problems from winter that are carrying over?”

Snodgrass says the severe weather outbreaks on Friday, that brought high winds, dust storms and wildfire warnings across the Plains, is a reminder how dry it is in the Southwest.

“We’ve got major pockets of the country that are still dealing with some pretty big drought conditions. It is fading, and that is a signal we have to pay attention to,” Snodgrass says.

USDA meteorologist Brad Rippey is also concerned about what impact the shifting pattern will have on farmers this spring. But it’s not just the dryness. It’s also the fact areas are getting inundated with rains that could pose problems.

“With this stormy weather pattern in place, that is going to create some difficulty for spring field work in some areas. It looks like the primary storm track may be through parts of the middle of the country extending into the lower Midwest and eventually the interior northeast. That is one area where we already have fairly wet conditions,” Rippey says.

How sea surface temperatures in the Niño-3.4 region of the tropical Pacific changed over the course of all La Niña events since 1950 (gray lines) and 2024-25 (black line). This shows the traditional calculation for Niño-3.4, the monthly temperature compared to the most recent 30-year average (1991–2020 for the 2024 line). By this measure, the La Niña threshold was crossed in December 2024, but La Niña remains weak.

(NOAA)

La Niñas and El Niños Are Strongest in the Winter
Snodgrass points out La Niñas and El Niños are always strongest in Northern Hemisphere’s winter, which means they fade in spring and summer.

While La Niña-like conditions were a trademark in late fall, we didn’t reach the official definition of La Niña until January.

“The atmosphere way back in November was already treating our winter timeframe like a La Niña,” Snodgrass says. So, we were getting the influences of it as it comes in and goes out. And now the question is, what’s it going to do?”

February 2025 sea surface temperature compared to the 1985-1993 average. The surface of the east-central tropical Pacific is slightly below average temperature, but much of the global ocean remains warmer than average.

(NOAA )

“This is a great map to look at,” Snodgrass says, referencing the map above. “If you focus right in the middle, you see the large area of the cooler colors. Our line is now shifting to the central and West Pacific and behind it over by South America. All of the warmer water is beginning to emerge. And that’s what’s killing it because there’s a trade wind across that area from the east to the west. We’re going to watch this fade carefully during the spring. But the question is: Do we get winter’s leftovers?”

What Fueled the Dryness This Winter?
During the winter, Snodgrass points out there was no subtropical jet. That’s what fueled drought in the Southwest and Northwest.

“I’m actually kind of worried about the beginning of April having another shot at cold air after what we’ve been experiencing in March, which has been so very, very mild. Then you say, well, we’ve had so much dry air in place. Are we still worried about more dry air coming back? To be honest, these big storm systems coming through the central U.S., if we could get four, maybe five more of those by early April, we’re going to hate it. It’s nasty weather. It’s not fun, and it’s dangerous, but it returns moisture. That could be part of the mix of things, including the fading of La Niña that could help bring us away from these major early season drought risk scenarios.”

55% of corn production, 46% of soybean production, 33% of the cotton growing area and 27% of the winter wheat production are currently experiencing drought.

(U.S. Drought Monitor )

Growing Drought Concerns
What if it doesn’t? What if we don’t see more of this severe weather hit the Southwest and Plains, and moisture remains absent as we get into the height of spring? Well, the area will enter into the height of the growing season dry and reduce their chances of seeing moisture this summer.

“That’s a box we check every spring,” Snodgrass says. “If the drought monitor saw a reduction in drought over winter, then that gives us a different look for spring. But what we see here is two-thirds of the country in some stage of drought, including the abnormally dry category. But it’s the epicenters of drought that are so concerning. Look at the Western Corn Belt. Look at the Southwest. We just wonder if that funnels into the Mississippi Valley as we go forward.”

At the same time some areas are seeing drought, Kentucky, southern Indiana, southern Illinois, Tennessee, Arkansas and the boot heel of Missouri are all experiencing heavy rains and flooding.

“By May 11, I want to know what the drought monitor map looks like. If it looks no different, then I’m going to be sounding alarms going into summer with concerns this will start to creep and move because as soon as we get into the summer weather, all we get is convective storms pop off. And what do they do? They just locally deliver rain - not big broad swaths of it,” Snodgrass says.

Tale of Two Weather Scenarios
He says the forecast leading up to May 11 is a tale of two weather patterns, with the Mississippi River being the dividing line for moisture.

“If you are along it and east of it, I think we’re going to have tight windows to plant. You could include a little bit more of Missouri, Iowa and Minnesota in that as well,” Snodgrass says. “I think we’re going to see repeated storm systems. The best moisture is east. It keeps avoiding that southern plains area.”

What to Watch: Where the Storm Chasers End Up
Snodgrass says if storm chasers are busying chasing severe weather across the Ohio Valley, the mid-south and the southeast, but not in Kansas and the Plains, that’s a key indicator there’s a problem with the moisture getting back into the plains.

“If it’s not there by the time we start June, it’s very difficult to rely on the atmosphere to return it once you get into the summer months if you live in the central plains, which is where they could build from,” he adds.

To watch the complete discussion with Snodgrass, visit Farm Journal TV and take advantage of the free trial.

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Farmland Values Are Holding Up, But There Are Hints of a Reset At a New Level

Thu, 01 Feb 2024 23:48:17 GMT

Eye-popping land sales continue to take the farmland market by storm. From the $34,800 per acre land sale in Missouri that smashed records last fall, to farmland in Sioux County, Iowa, selling for more than $22,000 per acre to start the year, it’s proof the strength in the farmland market hasn’t fizzled out yet.

“The key point, without a doubt, is resiliency,” says Paul Schadegg, senior vice president of Real Estate at Farmers National Company (FNC).

A new report from the company shows even with declining commodity prices and elevated interest rates, land values are higher than expected.

“We really haven’t seen any decreases to speak of, and there are still some really strong sales out there in the country,” Schadegg says.

“It is just remarkable how stable these market conditions have been,” says Jim Rothermich, vice president of agricultural appraisals for Iowa Appraisal. “Based on my auction data, farmland values are down 1% from 2022 to 2023, and I think it’s amazing we’re seeing it hold up that well.”

Farmers in the Driver’s Seat
The farmland market in Iowa remains the strongest, but both Rothermich and Schadegg say there are other states with impressive sales.

“Illinois and Indiana have picked up a little steam — a lot of the sales are in the $20,000-plus range,” Schadegg says.

While resilient farmland prices were the theme in 2023, Rothermich recently uncovered one change in the market.

“One thing I have noticed is the number of price reductions on the listings of these companies. I haven’t seen that before,” Rothermich says. “It’s a sign the market is being affected by high interest rates.”

He’s also seen an uptick in no sales in auction, yet farmers are still in the driver’s seat in most farmland sales.

“Over the past several years, when this land market really took off, the primary pool of buyers have been operating farmers, and they continue to be the most successful buyer of land,” Schadegg says.

(Farm Journal)

A Potential Reset
Now the question is: Just how much of a correction could the farmland market see in 2024?

“If we look at the past 25 years, we’ve seen some run-up in land values, and then it resets at a new normal,” Schadegg says. “I think over the next 12 to 24 months, we’re probably going to see land values reset at a new level.”

“The last time we had a run-up was in 2013/14 when values went down 20% to 25%. It just doesn’t seem like it’s going to do that this time,” Rothermich says, who instead thinks the farmland market could be setting up for a correction in the single digits.

Mike Walsten of Pro Farmer’s LandOwner newsletter says the best-case scenario for 2024 is for prices to hold steady for better-quality ground.

“The more likely case, in my opinion, is a 5% decrease,” Walsten says. “I look for continued weakness going into 2025 to 2027, if things do not change radically. Values could correct 10% to 15% eventually. If energy prices go crazy again, a 20% decline is likely, but I don’t see prices correcting any more than that because I don’t see a rush of panic farm sales hitting the market and overwhelming demand.”

Walsten says farmers, in general, have manageable leverage in their recent purchases, and lenders aren’t willing to let farmers get overleveraged on land buys, which will constrain the number of farms that are moving to the market and help keep supply and demand in balance.

What Would a Neutral Weather Pattern Mean for Harvest?

Thu, 14 Jul 2022 20:41:55 GMT

Wild weather hit the Midwest like a brick wall on Tuesday, with the National Weather Service categorizing the storm cell as a derecho due to the reported 90-plus mph winds.

The Midwest is no stranger to this weather phenomenon, as the past two years have produced a derecho at least once per year —a trend that could continue with back-to-back weather patterns, according to meteorologists.

Drought Monitor Summary

The U.S. is currently experiencing a La Niña weather pattern , according to Dennis Todey, USDA Midwest Climate Hub director. He says this pattern has occurred the past two years, with a third year on the horizon.

La Niña generally brings drought conditions, which the U.S. has experienced throughout 2022. As of Tuesday, the U.S. Drought Monitor update from the University of Nebraska-Lincoln (UNL) shows current conditions are shifting across the board.

(Farm Journal)

UNL says heavy rains across the nation may have eased the drought conditions in the short-term, but they won’t be enough for the long run.

Here’s a rundown of the U.S. Drought Monitor changes from June to July in the Midwest:
• East-central Illinois—degraded from moderate drought (D1) to severe drought (D2)
• South-central Missouri—transitioned to short-term D2
• Lower Michigan—now includes abnormal dryness (D0)
• Greater Ohio—moved to D0
• Northwest Wisconsin—greater area of D1

The High Plains maintains a D2 level of drought while most of the West saw some rainfall, which resulted in “drought elimination,” according to UNL. However, some western states like Montana and Wyoming continue to see drought conditions that have escalated into extreme drought (D3).

A Look Ahead

Kirk Hinz, BAMwx.com CEO, says July’s current weather snapshot is important, but August will be pivotal when it comes to crops.

“August seems to be that transitional month where it’s really going to come down to speed—how quickly temps will level out or warm up,” he says. “If we continue to warm up the oceans, like we are right now, there may be cold front risks into August.”

Hinz says to watch whether the heat will stick around the next two to three weeks as those temps will likely stay into August if they are maintained through July.

BAMwx.com predicts the current La Niña will be followed by a neutral weather pattern—neither La Niña nor El Niño.

If the tides shift to a cooler August, Hinz says harvest could be less fruitful than hoped. However, he believes harvest is too far out to make any definitive predictions.

More on weather:

Third Year of La Niña on the Horizon as Drought Continues in the Plains

July Farm Country Forecast: Hot Like a Firecracker

Texas Drought Approaching 2011’s Historic Levels

Appeals Court Clears Way for Hog Farm in SE Minnesota

Thu, 19 Nov 2020 03:30:55 GMT

MINNEAPOLIS (AP) — A plan to build a large hog feedlot in southeastern Minnesota can move forward, the state Court of Appeals ruled Monday.

The decision by a three-judge panel affirmed a vote by the Goodhue County Board in February to approve the proposed 4,700-hog operation near Zumbrota.

Opponents of the Circle K Family Farms project, including the Land Stewardship Project and Zumbrota Township residents, have been fighting it over concerns about odors and what they contend are high levels of toxic hydrogen sulfide at other hog farms in southern Minnesota owned by Jeff Kohlnhofer and his brothers Mike and Yon.

But the appeals court noted that the Minnesota Pollution Control Agency, after an extensive review, “concluded that the project did not pose a risk of potential significant environmental effects.”

The Court of Appeals concluded that the county approval of a permit for the project “was neither unreasonable nor an abuse of discretion.” The three judges noted that legal precedents obligated them to review the board’s decision “with particularly great deference” and to uphold it “so long as its basis has even the slightest validity.”

At a news conference in Lakeville, Kristi Rosenquist, of Zumbrota Township, and other opponents said they planned to keep up the pressure on the Kohlnhofer family to drop the plan. They said they tried to deliver 687 postcards to the Kohlnhofer Insurance Agency in Lakeville that were signed by people from around the state, but it was closed so they picketed outside instead.

They also said they planned to run an ad in a local newspaper accusing the family of trying to profit at the expense of people living near the proposed site.

Yon Kohlnhofer said the he’s happy with the court’s decision and that he thinks the project’s opponents have unfairly harassed his family at every step of the process. He said the insurance agency is owned by his sister and that his brother, Jeff, just works there part time.