Farm bankruptcies are climbing across Arkansas, with commodity prices sinking to levels not seen in years, prompting agricultural leaders to warn of a looming crisis that could force one in three farms out of business by spring. Joe Mencer, president of the Agricultural Council of Arkansas, emphasized that without federal intervention this fall, many operations may not survive the season. Projections show the state’s farming sector is on track to lose $1.4 billion, up from an earlier estimate of $1.14 billion, driven largely by rice prices hitting an eight-year low.\n\nAndrew Grobmyer, executive director of the council, described the situation as a potential disaster for food producers nationwide. He stressed that while Congress passed a budget reconciliation package earlier in the year—commonly referred to as the One Big Beautiful Bill (OBBB)—its benefits won’t materialize until 2026, far too late to aid farmers currently struggling with hundreds of dollars in losses per acre. Brandy Carroll, director of commodity activities at the Arkansas Farm Bureau, compared the delay to stopping a bridge construction mid-river: essential support is missing just when it’s needed most.\n\nThe OBBB includes updates to farm safety net programs, but these changes hinge on full marketing cycle data, meaning payments won’t be issued until late 2026. Meanwhile, input costs for fuel and fertilizer remain high, and ongoing trade tensions have worsened market instability. Grobmyer noted that China has increasingly turned to Brazil for soybeans, especially after U.S.-China trade disputes during the first Trump administration, allowing Brazil to expand its global share and intensify competition for American growers.\n\nRyan Loy, an economist with the University of Arkansas System Division of Agriculture, reported 259 farm bankruptcy filings nationally between April 2024 and March 2025, with Chapter 12 cases—tailored for family farms—jumping from 45 in Q1 2024 to 88 in Q1 2025. In addition, over 60 farm auctions have taken place in Arkansas since December, signaling a rise in Chapter 7 liquidations. Scott Stiles, another extension economist, observed that farmers are postponing equipment purchases, contributing to a 13% drop in tractor sales and a 48% decline in combine sales year-over-year. This slowdown affects suppliers, dealers, and rural communities dependent on agricultural activity.\n\nCarroll highlighted a generational risk: younger farmers, often lacking equity and credit history, are disproportionately vulnerable. Some may abandon farming before reaching formal bankruptcy, opting instead for off-farm jobs in banking or equipment sales. This quiet exit won’t appear in official statistics but could erode the future of family farming. There’s also concern that landowners, facing uncertainty, might lease fields for solar development—removing productive farmland from use for decades.\n— news from Talk Business & Politics\n\n— News Original —\nArkansas’ agricultural leaders warn of economic disaster for farmers\nFarm bankruptcies are on the rise, commodity prices are so far underwater it’s inviting comparisons to the Titanic, and a generation of farmers may be at risk of extinction. \n\nThe consensus opinion in the agricultural community is that Congress needs to do more now to help save the producers who are the foundation for the nation’s food supply. \n\n“There is a true disaster looming on the horizon,” warns Andrew Grobmyer, executive director of the Agricultural Council of Arkansas, a group representing a vast diversity of farmers and those who support the industry. \n\nOne in three or more farms in Arkansas could be shuttered by next spring if the federal government doesn’t provide some type of supplemental assistance to farmers this fall, said Joe Mencer, president of the Agricultural Council of Arkansas. \n\nCommodity prices continue to plunge, and as of mid-August, the state’s ag sector was projected to lose $1.14 billion this season. And that number has ballooned by another $300 million by the end of the month to $1.4 billion as rice prices spiraled downward to an eight-year low. \n\nAnd, the overall losses will almost certainly continue to rise, Mencer said. \n\n“First of all, we’re in dire straits,” Mencer said. “Ag is in turmoil right now.” \n\nGOVERNMENT ACTION NEEDED \n\nCongress passed relief for farmers earlier this year when it approved the budget reconciliation bill known as the One Big Beautiful Bill, or OBBB. While it provided relief in some areas, it won’t be enough to cover losses that farmers are projected to face this year, said Brandy Carroll, director of commodity activities and market Information for the Arkansas Farm Bureau. \n\n“We do need to see Congress act and finalize the remainder of those farm bill programs,” she said. “At some point this year, they’re calling it farm bill 2.0, or a ‘skinny farm bill.’ We definitely need to see them do that. They have to because every farm bill is an amendment to the original acts from the 1930s and 1940s. If they just let the provisions expire, we revert back to those programs, which are parity prices for things like dairy and rice and cotton, but then no programs at all for soybeans. So they do have to act in some way.” \n\nCarroll, who grew up on a rice farm in Weiner (Poinsett County), has decades of experience studying the impact of agricultural policies on Arkansas farmers. She said some of the provisions of OBBB for farmers won’t kick in until the second half of 2026, which will be too late. \n\n“My metaphor for that is it sort of feels like we stopped building the bridge about halfway across the river, and we’re not there,” she said. “All of the changes that Congress passed in budget reconciliation, they don’t really do anything for another year. It takes the complete marketing year of every crop before they determine the actual market price of the crop and the reference price. Those payments aren’t made for the full year until the end of the marketing year — that means October or November of ‘26.” \n\nToday, row crop farmers are facing losses to the tune of hundreds of dollars per acre. Fertilizer and fuel costs have hammered the industry, low commodity prices are strangling profitability, and the tariff and trade wars pursued by the White House have compounded problems. \n\nGrobmyer said the federal government has reported a record $100 billion in tariff collections, and many in the ag sector would like some of that money used to supplement farmers. Even if trade negotiations are finalized soon, it won’t be in time to help farmers with this year’s crop. \n\nAbout 70% of commodities exported from Brazil go to China. This allows the Chinese to coerce farmers there to buy equipment and products from Chinese vendors, Grobmyer added. More than 20 years ago, Brazil was not using modern equipment, seeds or farming techniques. That has all changed, he said. \n\nA big expansion of Brazil’s market share occurred in the first Trump administration when soybean tariffs were leveled on China. Instead of coming to the negotiating table with America, the Chinese successfully redirected their efforts to Brazil and other developing countries. \n\n“Brazil is a key source of pain for American farmers,” Grobmyer said. \n\nBANKRUPTCIES RISE, INVESTMENTS SLOW \n\nFarm bankruptcy filings are rising in 2025, said Ryan Loy, extension economist for the University of Arkansas System Division of Agriculture. \n\n“We’ve had 259 filings in the United States between April 1 of 2024 and March 31 of this year,” said Loy, adding that the number of filings in the first quarter of 2025 outpaced those of the same period in 2024. \n\n“We’ve already beat last year in terms of Q1 national filings,” he said. “Once you see this on a national level, it’s a clear sign that financial pressures that we saw before in the 2018 and ‘19 are kind of reemerging.” \n\nFiling under Chapter 12 of the federal bankruptcy code gives farmers — and family fishermen — an opportunity to propose and carry out a plan to repay all or part of their debts. Chapter 12 bankruptcies were introduced in 1986 at the height of the farm crisis and were designed to offer an alternative to a Chapter 7 filing, which a farm’s assets are liquidated to pay creditors. \n\nIn the first quarter of 2024, there were 45 Chapter 12 bankruptcy filings, and in 2025, there were 88. With more than 60 farm auctions in Arkansas since December, there are also plenty of Chapter 7 filings. \n\n“There are concerns about the trade environment that we’re in,” said Scott Stiles, extension economist with the UA Division of Agriculture. “There have certainly been a lot of weather challenges.” \n\nStiles said the farmers’ No. 1 response is “holding off on capital purchases right now.” \n\nThe last monthly report from the Association of Equipment Manufacturers showed that tractor sales were down 13% year over year, and combine sales were down 48% for the same period. \n\n“There’s a downstream impact on other segments in ag industry,” Stiles said. “Your input suppliers, your equipment dealers, anybody who provides a service to farmers is impacted by this, too.” \n\n“If the farmers are hurting, those communities are going to hurt too,” Loy said. \n\nGENERATIONAL IMPACT \n\nThe Farm Bureau’s Carroll said older farmers might be able to weather the storm as they’ve had decades to build farm equity or eliminate debt from their early years when times have been better. She’s concerned about younger farmers. \n\n“There aren’t as many of those young farmers, and then they’re disproportionately being hit with this because they don’t have the equity and they don’t have the experience,” she said. “Maybe they don’t get as good of an interest rate, not as much experience. People are maybe less likely to rent their land to them anyway. So there may be a generational impact once this shakes out. And at that point, landowners maybe start putting solar panels on the ground instead of renting it. And then that ground is gone for 30 years. It’s out of production, at least if it ever comes back.” \n\nShe also cautions that the true impact on young farmers may not show up statistically. They won’t necessarily be reflected in bankruptcy numbers because they aren’t far enough along in their careers. \n\n“Some of these young people will just say, ‘I can’t do this anymore,’” she said. “‘I’m not going to risk my land. I’m not going to put up my house. I’m just going to try to get a job at the bank or sell tractors or steel or whatever. Just something else besides farming before it gets to bankruptcy.’ So those farmers are going out, but they won’t be reflected in bankruptcy numbers.” \n\nEditor’s note: Talk Business & Politics reporter George Jared contributed to this report.
