Minding Ag's Business

OMAHA (DTN) -- More farmers are filing for Chapter 12 bankruptcy in 2026, according to a new report from the National Agricultural Law Center at the University of Arkansas.

Federal court data showed 292 Chapter 12 cases had been filed in the first nine months of 2026, up nearly 19% from the same period a year ago. In the third quarter alone, 91 farmers filed for Chapter 12 relief nationally.

"The number of Chapter 12 bankruptcies filed this quarter underscores the significant financial pressures facing U.S. agriculture," said Harrison Pittman, director of the National Agricultural Law Center (NALC). "However, these filings tell only part of the story. As the NALC DEBT Project demonstrates, the full scope of financial distress becomes clearer when agricultural bankruptcies filed under other chapters of the bankruptcy code are also considered."

The DEBT Project examines federal bankruptcy data for agricultural operations that have filed under either Chapter 12 or Chapter 11 bankruptcy, which gives a more complete picture. Nationally, Chapter 11 bankruptcy filings increased 11.5% for the first three quarters of 2026 compared to a year earlier.

According to the most recent federal court data, 7,623 Chapter 11 cases were filed in the first three quarters of 2026, up from 6,838 during the same period in 2025. Elizabeth Rumley, NALC senior staff attorney, noted that while Chapter 11 filings are not exclusive to agricultural businesses, the DEBT Project demonstrates that they can include agricultural operations and provide a more complete picture of financial distress in the agricultural sector.

Pittman told Brownfield News that bankruptcies also don't tell the whole story.

"I would love to know how many farm operators simply ceased farming, but didn't declare bankruptcy," he said. "They had enough equity and didn't need to restructure debt. They just got out of farming."

STATE BREAKDOWN

Arkansas also led the country in Chapter 12 filings with 12 cases in the third quarter of 2026 and 32 such filings for the year, "highlighting the financial challenges facing the state's agricultural sector," Pittman said.

Looking at Chapter 11 and Chapter 12 cases, California leads the country with 25 cases, of which 13 are Chapter 11 filings. Then comes Arkansas, Indiana, Texas and Missouri as the states with most agricultural bankruptcy filings.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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