Farms are failing. In Ninth District states, 84 of them have filed for chapter 12 bankruptcy protections, which is more than doubled since June 2014.
Fedgazette reports that low commodity prices and recent tariffs have started to affect not only profitability but also viability for farmers and ranchers in those districts, which is made up of Minnesota, Montana, North and South Dakota, and parts of Wisconsin and Michigan. This might not come as a surprise to some as 2010 saw 70 similar filings, however, the current report shows this trend has yet to peak.
Dairy farmers in Wisconsin have been hit the hardest with 60% of the filings in the Ninth District coming from the cheese state. Although Wisconsin produces the second highest amount of milk for the US, the amount of micro farms (farms with less than 200 head of cattle) in business makes it difficult for these smaller operations to handle commodity price fluctuations. The number of licensed dairies in Wisconsin has dropped 13% since 2016.
Chapter 12 bankruptcy is a combination of the chapter 11 and chapter 13 filings. The debtor typically has 3-5 years to pay off the debt.
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