Even when overall economic factors are relatively stable, family farmers risk falling into serious debt if bad weather or other natural conditions reduce the yield from their crops in a given year. Economic headwinds and trade disputes can make the situation even more difficult within the agriculture industry. Whatever the specific causes might be, records show in 2024 that filings increased sharply within the bankruptcy program designed for family farmers and fishers.  

During the year, there were 216 Chapter 12 bankruptcy filings, which constitutes a 55 percent hike over the 2023 figure. The change was even more dramatic in the Midwest region, which includes South Dakota. In these states, the year-over-year increase was 69 percent. Numerous factors have been citied to explain this financial instability, such as:

• Lower receipts — For many crops, commodity prices have remained stubbornly low as costs for fuel and labor have risen. Fluctuating demand patterns and reduced market access have put a great deal of pressure on farmers across the country.

• Volatile weather — As some parts of the United States faced severe droughts in 2024, other regions were ravaged by floods. These disruptions have threatened farmers already working on tight margins.

• Reduced subsidies — Policy changes related to agricultural subsidies have also contributed to financial stress, compelling farmers to navigate an increasingly complex regulatory environment with fewer safety nets. High interest rates pose another challenge as many farmers rely on short-term loans to bridge expenditure gaps.

• Generational shifts — On many farms, owners are aging, and a simple transition cannot be made to the next generation. This can lead to management struggles and the need to bring in more expensive outside help.  

Though these and other challenges can make it hard to keep a farm financially sound, it’s important to remember that a debt relief solution is expressly tailored to the needs of family farms and fisheries. Under Chapter 12 bankruptcy, you can halt collection actions and develop a fair repayment plan that acknowledges the unsteady nature of income within the agricultural sector. 

If your family farm cannot meet its debt obligations, there is no time to wait. Anker Law Group represents South Dakota farmers in Chapter 12 bankruptcy proceedings. To discuss how we can help you, please call 605-519-5967 or contact us online. Our office is in Rapid City.