O.k. kids, good news/bad news time….the good news is the number of Georgia farm bankruptcies is lower this year than in recent years….the bad news is its still among the highest in the nation. This, as growers grapple with poor prices, burdensome tariffs and lingering effects from brutal weather.
The Farm Bureau report shows Wisconsin with 48 bankruptcies; Nebraska, Kansas and Georgia with 37; and Minnesota with 31 and there’s the expectation of more farmers to seek bankruptcy court protection in the next few months.
But the problem is not the result of a one year downturn. Bankruptcies happen and loan deficiencies happen when there are more prolonged issues.
“Chapter 12 farm bankruptcies continue to increase as farmers and ranchers struggle with a prolonged downturn in the farm economy that’s been made worse by unfair retaliatory tariffs on U.S. agriculture as well as two consecutive years of adverse planting, growing and harvesting conditions,” the Farm Bureau report says. “Nationwide over the prior 12 months, Chapter 12 bankruptcies totaled 580 filings and were up 24% from the previous 12 months.”
For our part, Georgia logged 37 new Chapter 12 filings in the latest 12-month period ending Sept. 30, according to a report last week from the U.S. Courts. That’s up from 25 for the same period a year earlier. But it’s down from 43 and 41 in the periods for 2017 and 2016, respectively. Chapter 12 is set aside largely for family farmers. Both Georgia’s latest 12-month total number of cases and its growth compared to the same period a year ago are among the highest in the nation. Prices remain low for peanuts and cotton, two crucial Georgia crops. Some farmers still owe debts that were supposed to be paid for 2017 and 2018.
The state’s biggest increase — 14 additional filings — came in the latest reporting period of July, August and September, as some farmers waited for the U.S. Department of Agriculture to distribute a portion of new disaster aid. The assistance had been passed by Congress and signed by the president by early June.
Experts expect even more farming bankruptcy claims for Georgia in 2020.
According to the Farm Bureau, the federal government projects that nearly 40% of U.S. farm income for 2019 will be tied to trade and disaster assistance, the farm bill and insurance payments.
To read the Farm Bureau report, visit https://www.fb.org/market-intel/farm-bankruptcies-rise-again.