Record Costs and Trade Tariffs Drive Surge in Farm Bankruptcies
Washington D.C., Thursday, 15 January 2026.
Insolvency filings climbed nearly 36% last year as rising input costs and trade tariffs squeeze margins, signaling a deepening economic crisis across the US agricultural sector.
Escalating Insolvencies and Market Saturation
The financial deterioration within the farm belt has accelerated rapidly over the last twelve months. In the first three quarters of 2025 alone, 293 farming operations filed for Chapter 12 bankruptcy, a figure that represents a nearly 36% increase over the total filings recorded for the entire year of 2024 [2]. Lending institutions are already fortifying their balance sheets against anticipated defaults; CoBank, a key lender in the sector, recorded $129 million in provisions for credit losses through September 2025, a massive increase calculated at 2050 percent from the $6 million set aside during the same period the previous year [2]. This insolvency wave is exacerbated by record inventories, with corn stockpiles hitting a December record in 2025 following massive harvests, which has kept commodity prices well below the break-even point for many producers [2].
Operational Costs vs. Market Reality
While crop prices stagnate due to oversaturation, operational expenses continue to climb. Input costs for essentials such as seed, fertilizer, and equipment have risen by more than 30% over the past five years [1]. Looking ahead to the 2026 planting season, the USDA forecasts that production costs will rise an additional 3% for corn and 3.1% for soybeans [2]. To achieve profitability under these conditions, farmers would need market prices to reach $5.03 per bushel for corn and $12.80 for soybeans [2]. However, Iowa State University agricultural economist Chad Hart describes the current reality starkly, noting that without a profit opportunity in sight, “Everything is underwater right now” [2].
Equipment Sales Collapse and Manufacturing Layoffs
The liquidity crisis has forced farmers to defer capital expenditures, resulting in a sharp contraction in the agricultural machinery market. In 2025, tractor sales fell nearly 10% compared to 2024, while sales of combine harvesters plunged by more than 35% [2]. This drop in demand is causing significant downstream economic damage. Major manufacturer John Deere has laid off more than 2,000 employees across eight U.S. factories since 2023, while CNH Industrial announced hundreds of layoffs across Minnesota, North Dakota, and Wisconsin in 2025, citing weak demand and higher material costs linked to tariff policies [2]. University of Illinois economist Jonathan Coppess warns that these manufacturing cuts are just the beginning, describing a “much bigger hammer coming down on rural America” that threatens jobs at local schools, hospitals, and government agencies supported by the rural tax base [2].
Trade Policy Fallout and Political Disillusionment
Political support in rural areas is showing signs of strain as the economic reality of trade wars sets in. Despite President Trump’s promise to distribute $13 billion in aid derived from tariff revenues [1], many farmers feel abandoned by the administration’s trade strategies. Tennessee farmers Jeffrey Daniels and Franklin Carmack expect to lose nearly $800,000 this year, explicitly blaming tariffs and inflation for their financial distress [1]. Frustration deepened last fall when the White House approved a $40 billion bailout for Argentina, a major global competitor in the soybean market, a move that has led some constituents to express regret over their electoral choices [1]. As one farmer noted, the sector is being “tariffed into insolvency” by the very policies they supported [1].
The Human Toll
Beyond the balance sheets, the crisis is exacting a severe psychological toll on rural communities. The Centers for Disease Control and Prevention (CDC) reports that suicide rates among farmers are now three times higher than the national average [1]. In Shelby County, Missouri, local advocates reported a suicide approximately every three months as far back as 2022, a trend that persists as financial pressures mount [1]. With banks cutting off growers and unable to renew operating notes for the new year, many multi-generational farm families face the immediate prospect of losing their land and livelihoods [2].