By Robert Dinterman and Ani L. Katchova, Farm Income Enhancement Program, Department of Agricultural, Environmental and Development Economics, The Ohio State University
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.
While nationally there has been a stabilization of farm bankruptcies, there is still substantial regional variation in farm bankruptcies and some areas are doing better than others across the U.S. For instance, Wisconsin led the nation in farm bankruptcies over the past year with 47 chapter 12 cases filed between October of 2017 and September of 2018. This has been a recent trend for Wisconsin as they had 41 filed the 12 month period before October 2017 and 36 the 12-month period before that. While Wisconsin has had an upward trend, they have not seen the largest increase in bankruptcies year-over-year as Nebraska, New York, and Minnesota have seen larger gains in the number of farm bankruptcies filed since October 1st of 2017.