Farm bankruptcies across the nation are up, but Ohio’s rate remains among the lowest in the Midwest, according to a new analysis by researchers at The Ohio State University College of Food, Agricultural, and Environmental Sciences (CFAES).
Ohio had nine new farm bankruptcy filings from July 1, 2018, to June 30, 2019. That’s compared to 45 in Wisconsin, 39 in Kansas, and 32 in Minnesota—the three states in the nation with the highest number of new filings during that period.
Chapter 12 bankruptcy filings have been fairly stable over the past few quarters and have stabilized to around the same levels as when chapter 12 became a permanent fixture of the bankruptcy code in 2005. The US experienced elevated levels of chapter 12 filings towards the end of 2009 through mid-2012, but aside from the second quarter of 2017 there has not been a quarter with more than 150 chapter 12 bankruptcies filed and that is a good sign for the agricultural sector. In general, the second quarter, which consists of the period between April 1st and June 30th, is the quarter that typically has the highest number of bankruptcies in a year.
Declining farm income and farmland values likely will lead to an increase in the number of farmers who are delinquent on their loans and eventually a rise in farm bankruptcies, predicted a pair of Ohio State University agricultural economists.