Farm bankruptcies are up across the Upper Midwest because of low prices on corn, soybeans, milk, and beef, and bankers say the worst is yet to come.
The "nagging economic strain of low commodity prices on farmers and ranchers—compounded for some by recent tariffs—is starting to show up not just in bottom-line profitability, but in simple viability," financial analyst Ronald Wirtz writes for the Federal Reserve Bank of Minneapolis. "Current price levels and the trajectory of the current trends suggest that this trend has not yet seen a peak."
A Minneapolis Fed analysis found that 84 farms filed for Chapter 12 bankruptcy in Wisconsin, Minnesota, North Dakota, South Dakota and Montana between June 2017 and June 2018. "That’s more than double the number over the same period in 2013 and 2014, and the number of bankruptcies in Minnesota doubled over the past four years from eight to 20," Adam Belz reports for the Star Tribune in Minneapolis.
Wisconsin has been hit particularly hard, reporting about 60 percent of those 84 bankruptcies, mostly because of dairy industry woes. "Though the state is the country’s number two milk producer, it still has many small farms, which tend to be more exposed to large price fluctuations," Wirtz reports.
Mark Miedtke, president of the Citizens State Bank in Hayfield, Minn., said corn and soybean farmers are hurting too. "Grain farmers have had low prices for the past three years but high yields have helped them through. We’re just waiting for a turnaround. We’re waiting for the tariff problem to go away," Miedtke told Belz.
"The problem is showing up in other parts of the Midwest, too. A new report from the Federal Reserve Bank of Kansas City, which covers Colorado, Kansas, Nebraska, Oklahoma, Wyoming and portions of Missouri and New Mexico, showed that more than half of bankers in the district reported lower farm income than a year ago," Belz reports. "They also said they expect farm income to weaken in coming months."
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| Star-Tribune chart by Raymond Grumney; click on the image to enlarge it. |
A Minneapolis Fed analysis found that 84 farms filed for Chapter 12 bankruptcy in Wisconsin, Minnesota, North Dakota, South Dakota and Montana between June 2017 and June 2018. "That’s more than double the number over the same period in 2013 and 2014, and the number of bankruptcies in Minnesota doubled over the past four years from eight to 20," Adam Belz reports for the Star Tribune in Minneapolis.
Wisconsin has been hit particularly hard, reporting about 60 percent of those 84 bankruptcies, mostly because of dairy industry woes. "Though the state is the country’s number two milk producer, it still has many small farms, which tend to be more exposed to large price fluctuations," Wirtz reports.
Mark Miedtke, president of the Citizens State Bank in Hayfield, Minn., said corn and soybean farmers are hurting too. "Grain farmers have had low prices for the past three years but high yields have helped them through. We’re just waiting for a turnaround. We’re waiting for the tariff problem to go away," Miedtke told Belz.
"The problem is showing up in other parts of the Midwest, too. A new report from the Federal Reserve Bank of Kansas City, which covers Colorado, Kansas, Nebraska, Oklahoma, Wyoming and portions of Missouri and New Mexico, showed that more than half of bankers in the district reported lower farm income than a year ago," Belz reports. "They also said they expect farm income to weaken in coming months."
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