The number of farms filing for bankruptcy is increasing across the Upper Midwest, following low prices for corn, soybeans, milk and beef, according to a new analysis from the Federal Reserve Bank of Minneapolis.
The analysis found that 84 farms filed for bankruptcy in Wisconsin, Minnesota, North Dakota, South Dakota and Montana in the 12 months that ended in June. That’s more than double the number over the same period in 2013 and 2014.
“Current price levels and the trajectory of the current trends suggest that this trend has not yet seen a peak,” said Ron Wirtz, an analyst at the Minneapolis Fed.
The increase in Chapter 12 filings reflect low prices for corn, soybeans, milk and beef, The Star Tribune reported. The situation has gotten worse for farmers since June because of the retaliatory tariffs that have closed the Chinese market for soybeans and held back exports of milk and beef. Chapter 12 bankruptcy allows for repayment of debt over three years.
“Dairy farmers are having the most problems right now,” said Mark Miedtke, the president of Citizens State Bank in Hayfield. “Grain farmers have had low prices for the past three years but high yields have helped them through. We’re just waiting for a turnaround. We’re waiting for the tariff problem to go away.”
Miedtke said the underlying problem began before the trade issues, with farmers being too efficient for their financial good and demand not keeping pace with the production.
“The picture could start changing this spring,” Miedtke said. “We do what we can to try to work with farmers.”