Athens, GA |

Across Georgia and much of the country, signs of financial stress are becoming more apparent in agriculture, as farm bankruptcies continue to rise for the second straight year. While not every sector is struggling equally, the overall picture points to mounting pressure that has been building over time.

“It’s really a tale of two sectors,” said Will Secor, Extension Livestock Economist with the University of Georgia. “We have a situation in the livestock sector where margins have been pretty good. On the other side, we have the crop sector where things are struggling. Prices for row crops like cotton and peanuts are down, and input costs have been high… so those margins have been squeezed pretty considerably.”

A Slow-Building Financial Squeeze

 

For many producers, the financial strain didn’t happen overnight. Instead, it’s the result of multiple years of tightening margins, forcing farmers to make difficult decisions just to keep their operations running.

“It’s probably several years before you really think about it,” Secor explained. “You’ve worked through your cash on hand, trimmed costs everywhere you can, but you still have fixed costs tied to equipment, land, and debt. It’s that cumulative effect.”

That long-term pressure is why bankruptcy filings often don’t reflect a single bad year—but rather a series of challenging seasons stacked on top of each other.

Why Bankruptcies Lag Behind Reality

 

According to Secor, farm bankruptcies are considered a “lagging indicator,” meaning they show up only after financial stress has been building for years.

“Producers may have already restructured debt or taken on additional loans just to get by,” he said. “But after two or three years of tighter margins and higher input costs, they may reach a point where they no longer see a path to pay those obligations off.”

By the time a bankruptcy is filed, many farmers have already exhausted most of their financial options.

A Path Forward, Not the End

 

Despite the negative connotation, filing for Chapter 12 bankruptcy doesn’t necessarily mean the end of a farming operation. In many cases, it’s a tool designed to help producers reorganize and continue farming.

“In Chapter 12, farmers create a debt repayment plan that gets court approved,” Secor said. “That might include stretching payments out over a longer period or adjusting interest rates. It’s really designed to restructure that debt and provide a path forward.”

That flexibility can offer struggling producers a second chance—helping them stabilize their operations rather than shut them down entirely.

Challenges Likely to Continue

 

Looking ahead, the outlook remains uncertain, especially for crop producers who continue to face low commodity prices and high input costs. With those pressures expected to persist, financial strain across the sector may not ease anytime soon.

For Georgia farmers, the current rise in bankruptcies serves as a sobering reminder of just how challenging the farm economy has become—and how critical it is to find long-term solutions to support the industry.

By: John Holcomb