A new Minneapolis Federal Reserve Bank analysis shows the numbers of farms filing for bankruptcy in the 12 months ending in June more than doubled from the same period in 2013 and 2014. There were 84 Farm Bankruptcy’s in South Dakota and 4 other upper Midwest states during that time period. SDSU Extension Agribusiness Specialist Matt Elliott says there’s been 3 to 4 years of low commodity prices due to larger production and unfavorable weather and that coupled with the trade war has led to that restructuring.
His advice to farmers is to try and manage their cash flow the best they can and reduce their debt payments as well as take advantage of any marketing opportunities.
Elliott isn’t surprised the Minneapolis Fed noted that the bankruptcy trend has not yet peaked.
The increase in Chapter 12 filings reflects low prices for corn, soybeans, milk and beef and that’s gotten worse due to the retaliatory tariffs from the trade war that has closed the Chinese market for soybeans and held back exports of milk and beef.
