Upper Midwest Farm Bankruptcies on the Rise

The Minneapolis Federal Reserve Bank reports farm stress and bankruptcies have increased in the upper Midwest, which includes dairy country. The Federal Reserve Ninth District reported 103 chapter 12 bankruptcies in 2018, compared to 79 in 2017. Farmers in the region continue to face low prices for commodities, including dairy products, and high production costs. Total costs for inputs like seed, fertilizer, pesticide, fuel, and electricity have risen by 50 percent since 2006 for Minnesota farmers. The district of the Federal reserve includes parts or all of Minnesota, Montana, North and South Dakota, Wisconsin and Michigan. Dairy farmers in particular have seen hard times, with overproduction and low prices. Many farms have gone out of business or shifted to other agricultural production sectors, while surviving dairies are growing. Bankers apparently don’t have the optimism of farmers either as the Minneapolis Fed reports the most recent quarterly ag credit survey conducted in January found that bankers widely predicted lower capital spending and net farm income for the coming three months, as well as more weakness in loan repayments.