Southwest (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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Arizona Border Rancher Accused of Killing Migrant, Now Held With $1 Million Bond

Wed, 15 Feb 2023 20:02:26 GMT

An Arizona rancher has been arrested in connection with the death of a Mexican national who was shot and killed on the rancher’s property, literally yards north of the Mexican border.

(Farm Journal)

George Alan Kelly, 73, was charged with first-degree murder in the death of Gabriel Cuen-Butimea, 48, from Nogales, Mexico. Authorities say Cuen-Butimea was shot Jan. 30 in a remote desert area near Kino Springs, a tiny hamlet in Santa Cruz County. Kelly is being held on a $1 million bond.

Law enforcement have not divulged a motive for the shooting, and details remain sketchy. The incident, however, could develop into a powder keg and further escalate the tense political issue regarding the U.S.-Mexican border.

Here’s what we know. Kelly lives with his wife on their ranch – Vermilion Mountain Ranch – and routinely see migrant trespassers. The couple have reported they fear members of the drug cartels and their heavily armed soldiers trafficking people and drugs.

On the day of the shooting, a sheriff’s dispatch reported a call at around 2:40 p.m. from U.S. Border Patrol about a “possible active shooter” in the area of Sagebrush Road, which is Kelly’s address. CBP apparently received a report from a witness about a “group of people running” and said he was “unsure if he was getting shot at as well.”

At around 5:50 p.m. on the day of the shooting, sheriff’s deputies received another report of shots fired at the property. By 6:42 p.m. they recovered Cuen-Butimea’s body. Authorities have said there was no weapon on the victim at the time, and investigators had collected two assault-style rifles from Kelly’s property in the aftermath to determine whether either was used in the shooting.

Cuen-Butimea was identified by authorities from his Mexican voter card, and his body was found approximately 150 yards from Kelly’s home. News outlets have reported U.S. federal court records “show Cuen-Butimea has had a history of illegal border crossings and deportations in and around Nogales, with the most recent documented case in 2016.”

While an investigation into the shooting is ongoing, officials have said they don’t have a clear motive and that they don’t think Kelly and Cuen-Butimea knew each other.

Under Arizona law, deadly force is allowed on one’s own property if the homeowner believes it “immediately necessary” to prevent trespassing. Other statutes — known as the “stand your ground” laws — also defend the use of physical or deadly force when a homeowner fears a threat and believes force is necessary.

At a preliminary hearing Jan. 31, Kelly asked a judge to reduce his bond so he could help his wife.

“She’s there by herself … nobody to take care of her, the livestock, nor the ranch. And I’m not going anywhere. I can’t come up with a million dollars.”

A GoFundMe account was established to help with Kelly’s legal fees, but the account was quickly taken down, FOX News Digital reports.

“GoFundMe’s Terms of Service explicitly prohibit campaigns that raise money to cover the legal defense of anyone formally charged with an alleged violent crime. Consistent with this long-standing policy, any fundraising campaigns for the legal defense of someone charged with murder are removed from our platform,” a spokesperson for GoFundMe said in a statement to Fox News Digital. “Donors who contributed to the fundraising campaigns for George Alan Kelly’s legal expenses have been fully refunded.”

An active fundraiser for Kelly remains on the Christian crowdfunding platform GiveSendGo which had raised over $16,000 on Friday morning.

“Neighbors say that he had been having difficulty keeping invaders out and say that Mr. Kelly would have acted in good faith,” the fundraiser’s organizer, Shannon Pritchard, wrote. “It is a tragedy that a simple farmer, who should be protected by the government, has been abandoned and had to defend himself.”