Chapter 12 family farm and family fishery bankruptcies totaled 552 filings during 2020, down 43 filings or 7% from 2019, according to data from the U.S. Courts. The number of bankruptcies was the third highest over the last decade.
Here's a closer look at the data:
- District Court data indicates that Chapter 12 bankruptcies were the highest in western Wisconsin at 39 filings, followed by Kansas at 35, Nebraska at 32 and eastern Wisconsin at 30.
- The 10 District Courts with the highest number of filing represented 48% of all Chapter 12 bankruptcies during 2020.
- In 17 court districts, the number of Chapter 12 farm bankruptcies tied with or reached decade-high levels during 2020. These areas include: Eastern Wisconsin, Iowa, South Dakota, Montana and Vermont.
- In 33 of the 94 districts, Chapter 12 bankruptcies increased from prior years. The increase in Chapter 12 filings was the highest in eastern Wisconsin at 15 filings, followed by Vermont at 13.
- In 44 districts, the number of Chapter 12 filings decreased relative to previous years. The decrease was the largest in middle Georgia, which had 10 fewer filings, and western Pennsylvania, which had nine fewer filings.
- Over the last decade, there have been nearly 5,000 farm bankruptcies, less than a quarter percent of all farm operations based in the U.S. Based on a survey conducted by the Association of Chapter 12 Trustees, more than half of these filings were likely to complete a Chapter 12 reorganization or negotiate a mutually acceptable outcome, which may result in a dismissal of the case or conversion to Chapter 7.
- Total filings over the last decade were the highest in western Wisconsin at 255 filings, followed by Puerto Rico at 214, Kansas at 209, eastern California at 203 and middle Georgia at 192. The 10 districts with the highest number of filings had 1,850 filings over the last decade, approximately 38% of the national total.
USDA’s first Farm Income Forecast for 2021 will be released on Feb. 5. While many expect cash receipts from the sales of crops and livestock to increase, some expenses are likely to increase and ad hoc federal support will certainly be lower. The net effect will likely be lower, but above average, net farm income in 2021.