Ashley Arrington, from Ag Resource Management (ARM), anecdotally confirms the data around farm economic stress.
When asking ARM farmer customers who didn’t renew business with the ag lender the reason why, it wasn’t because they switched lenders.
“When we were asking that question, ‘why haven’t these people applied with us again?’ one of the biggest reasons why is they were no longer farming, and that’s the largest amount I’ve really ever seen in my career,” Arrington says.
She says this amplified level of farmer exits is indicative of the economic stress building, which has gotten worse since the start of the year.
Data shows a rise in Chapter 12 farm bankruptcies. In the first three months of 2025 there were 88 chapter 12 filings. In 2024 for the full year, there were 216 farm bankruptcies.
In the past decade, the highest farm bankruptcy count was in 2019 — after President Trump’s trade war with China — which saw 599 filings. But since then, farm bankruptcies were trending downward.
As of April, the top state with farm bankruptcy filings was Iowa, according to Quinn Kendrick, general counsel Peoples Company. And Ryan Loy, assistant professor and Extension agricultural economist at University of Arkansas, says his state has more than a quarter of the filings so far this year for its district.
Will The Trend Get Worse?
With higher input costs and lower commodity prices, row crop farmers have used cash reserves and working capital.
“It tough because it’s [working capital] already been burnt through, and that’s your first offense against commodity price volatility,” Arrington says. “I saw last year when cash was really starting to get depleted, and some people who should have addressed their problems last year, kicked the can down the road. And then this year, we can’t get anything done for them because it’s just too far upside down.”
Krista Prinz, president at Citizens State Bank in eastern Nebraska, shares their cattle business customers are in different situations than the operations heavy in row crop. She says uncertainty is the driver for almost all conversations between their ag lenders and borrowers right now.
“We are discussing their current situation and how to make adjustments for this upcoming year,” Prinz recently shared at a KC Federal Reserve Bank event. “We’ve seen a massive outflow of liquidity out of the agricultural industry over the past few years. Now, the discussion is about adjusting balance sheets — not expansion.”
Arrington reports from her conversations, we’ve seen the biggest swell of exits.
“Less cash and more debt is really hard, and if you’re in a very negative cash position and you don’t have the equity, that led to the exits that we saw in the market,” she says. “I think a lot of those have already occurred, though. Those who are moving forward have found solutions, are working on a solution currently, and are going to have the ship righted before next year.”
Arrington adds we could still continue to see exits into next year, but she shares optimism that the farmers staying in business today have addressed any issues and are making plans.
What Can Farmers Do to “Right the Ship?”
With declining cash positions, increased credit loads, what is a formula for success?
“Despite cattle feeders having improved profits, looking at the farmer balance sheets and the conversations about off-farm income has continued to be more of a discussion. We’re back where we were six or seven years ago in that regard looking at diversification, and other areas to bring in income,” Prinz says. “It’s a major conversation for our lenders, and the whole agricultural industry.”
Arrington says the team at ARM has been successful with consolidation, refinancing and stretching amortizations to give some financial relief.
“Hope is what we’re all holding on to right now,” she says.
