Farm bankruptcies rose sharply across the U.S. last year, and a Purdue University economist says the increase is tied to several years of tight margins in crop agriculture.
According to the American Farm Bureau Federation, Chapter 12 farm bankruptcies climbed 46 percent in 2025, with 315 filings nationwide. The Midwest saw the largest jump, with 121 filings last year, according to Hedgeye, an independent investing research firm.
Michael Langemeier, director of Purdue’s Center for Commercial Agriculture, said bankruptcies tend to lag financial stress on the farm.
“It takes several years in a row for us to see an increase in bankruptcies,” he said. “(2024) was a pretty tough year, ‘25 was also a tough year, now we've got ‘26 and it's possible that ‘27 could also be a low margin year. That's why you're seeing bankruptcies increase as we have these consecutive years of low margins.”
Langemeier said rising input costs have made the situation worse. Fertilizer and diesel prices surged after the pandemic, and he said the recent conflict in Iran has added more pressure by driving nitrogen and fuel prices higher.
“The input cost increased rather dramatically after covid,” Langemeier said. “We really haven’t seen much downturn in terms of those input costs.”
He said farm finances are also being squeezed by relatively low commodity prices. Corn prices have hovered around $4.20 per bushel, while break-even prices are closer to $5 for many producers.
That has put crop farmers under more strain than livestock producers, Langemeier said. He added that younger operators and farmers who do not own much land are especially vulnerable.
“If prices remain relatively low and costs relatively high this year, which is what we’re expecting, we would expect the number of bankruptcies to increase again in 2026,” he said.
Langemeier said government payments and possible farm bill aid could help stabilize land values and ease some of the pressure, but he added that the outlook still depends on whether prices improve and input costs come down.
