Expect more Farm Bankruptcies in 2018
A recent report by CoBank expects the farm economy to tighten again in 2018, and experts say that will lead to more farmers filing Chapter 12 bankruptcy.
DTN-The Progressive Farmer reports that wheat and dairy producers are among the hardest hit, with an increase in Chapter 12 bankruptcy filings in Kansas and Wisconsin, reaching the highest level since 2012 last year.
The number of Chapter 12 filings has been on the rise since 2014 when there were about 380 filings. That number spiked to just more than 500 in 2017. Chapter 12 is designed specifically for farmers with regular annual income and allows them to stop debt collection and establish repayment plans of three to five years with creditors. The law also allows farmers to restructure debt without forming creditors' committees. Meanwhile, the report points out that trade is “mission critical” for agriculture in 2018.
CoBank says: “U.S. agriculture has a lot at stake as these negotiations unfold, and the rhetoric is likely to get worse before it gets better.”
Source: NAFB News