292 US Farms Have Filed for Bankruptcy This Year. Here's What the Survivors Did Differently Before the Bank Called.

6 days ago

11 min read

Split scene of a worried farmer beside an idle tractor and empty grain bin, and the same farm full of families picking strawberries and paying cash, showing how a second income helps farms avoid bankruptcy

Jeff Rutledge farms rice in Jackson County, Arkansas. Last year he bought diesel for $2.50 a gallon. This year he paid more than $5, "pushing $6," and his fertilizer bill more than doubled. In a Brownfield Ag News report cited by Talk Business & Politics, he said it made thin margins go "very negative, very quickly."

He is not alone. From January to September 2026, US farmers filed 292 Chapter 12 bankruptcy cases, nearly 19% more than the same months of 2025. So what did the farms that held on do differently? Most of them stopped relying on one income that rises and falls with fuel and grain prices. They added visitor income that is often paid in cash, often paid up front, and mostly doesn't depend on diesel or export markets.

The short answer: Chapter 12 farm bankruptcies are on pace to rise for a third straight year, and Arkansas led the nation in the third quarter of 2026. Most of the pressure comes from one place: a single income stream squeezed by diesel, fertilizer and low crop prices at the same time. The farms in this article survived bad years by adding a second income that customers pay before or on the day of their visit, such as pick-your-own, farm events and farm stays. It is not a rescue plan for a farm already in trouble. It is a way to stop all your money moving in the same direction.

The Numbers Behind the Headline

The figures come from federal court data, compiled by the National Agricultural Law Center and released by the University of Arkansas Division of Agriculture on October 22, 2026.

292 Chapter 12 filings in the first three quarters of 2026, up from 246 in the same period of 2025.
91 filings in the third quarter alone.
Arkansas: 12 filings in the third quarter, the most of any state and twice the 6 filed in Iowa, the next highest.
Arkansas: 32 filings so far in 2026, after 33 in 2025, which was more than double the year before.

One honest note: these are bankruptcy cases, not a count of separate farms. But the trend has been building for three years.

Bar chart of US Chapter 12 farm bankruptcy filings: about 139 in 2023, 216 in 2024, 315 in 2025 and 292 from January to September 2026 — US Chapter 12 filings by year. The 2026 bar covers only January to September. Sources: American Farm Bureau Federation; University of Arkansas Division of Agriculture.

Year	Chapter 12 filings (US)	Change
2023	about 139	A recent low
2024	216	Up 55%
2025	315	Up 46%
2026 (January to September only)	292	19% above the same months of 2025

The year isn't over, so nobody can say yet what 2026's final number will be. What we can say is that 2026 is on pace for a third straight yearly rise.

And the court count understates the stress. To use Chapter 12, a farm family must have total debts under about $12.56 million and earn more than half its gross income from farming. Many families with off-farm jobs can't use it at all, so their distress never shows up in these figures.

Reality Check: Filing Chapter 12 does not automatically mean losing the farm. Congress created it in 1986, during the farm crisis, so family farmers could restructure debt and keep farming. Filing stops most collection actions automatically, a trustee is appointed, and the farmer repays creditors under a plan that usually lasts three years and can run up to five. It is still a hard road, and far better to fix cash flow before you get there.

Why Arkansas Got Hit First

Arkansas is a warning for every farm that sells one crop into one market.

Diesel jumped about 74%. The US Energy Information Administration put average diesel at about $3.58 to $3.62 a gallon before March 2026. By October it averaged around $6.27. On October 16, Illinois farm diesel hit $5.76 a gallon, the highest in a series that goes back to 2008, according to farmdoc daily at the University of Illinois.

Bar chart showing average US diesel price rising from about $3.60 a gallon before March 2026 to $6.27 in October 2026, raising farm costs — Average US diesel price per gallon, before March and in October 2026. Source: US Energy Information Administration via Talk Business & Politics.

Fertilizer and fuel added hundreds of millions. A University of Arkansas Division of Agriculture analysis estimates higher diesel and fertilizer prices add more than $343 million in costs for Arkansas farmers in 2026, about $120 an acre for rice. Reports link the jump to disrupted Middle East shipping after the conflict with Iran began, and to tariffs that raised equipment and parts prices.

Rice acres collapsed. Arkansas farmers planted 901,000 acres of rice in 2026, down from more than 1.25 million in 2025. It's the first time the state has dropped below one million rice acres since the early 1980s.

Debt kept growing. USDA forecasts US farm debt will reach a record $605 billion in 2026. I explained why borrowing to grow more of the same deepens the hole in US Farm Debt Just Hit a Record $605 Billion.

All of these hit the same income stream at once. When one goes wrong, the others usually follow.

Horizontal bar chart showing Arkansas with 12 Chapter 12 farm bankruptcy filings in the third quarter of 2026, twice Iowa's 6 — Arkansas filed twice as many Chapter 12 cases as any other state in July to September 2026. Source: University of Arkansas Division of Agriculture / National Agricultural Law Center.

The Real Problem: One Income That Moves in One Direction

Most farms that end up in trouble aren't badly run. They are built on one income that moves with things the farmer can't control: diesel, export demand and credit. Visitor income works differently.

	Commodity crop income	Visitor income (pick-your-own, events, farm stays)
Who sets the price?	The market, often a board in Chicago	You do
When are you paid?	After harvest, sometimes months later	On the day, often booked and paid in advance
Does diesel drive it?	Yes, fuel is a major cost	Mostly no, though fuel still touches your costs and your visitors' travel
Does it depend on exports?	Often	No, your customers live within driving distance
Can you raise the price this season?	No	Yes, within reason

Be honest about the middle row. Fuel still matters to an agritourism farm. Tractors still pull hay wagons, and families still pay for gas to reach you. I covered that squeeze in Diesel Shortage 2026: Why One Corn Maze Raised Tickets $3. But fuel is one cost among many there, not the cost that decides whether you make money.

And the timing matters as much as the price. A crop farm pays for seed, fuel and fertilizer months before it sees a cent. A visitor farm can sell tickets weeks before the gate opens. I explained this gap in Farm Cash Flow Problems: Why You Pay for Months Before You Get Paid.

What the Survivors Did Differently

Each farm below faced a bad year, low prices or rising costs, and built a second way to get paid before things got desperate. Every story comes from a published report.

1. They Turned Their Worst Year Into a Test

In 1974, a freeze wiped out almost the entire crop for the Chiles family in Virginia, a wholesale fruit business that had grown peaches since 1912. There wasn't enough fruit to hire pickers or run the packing house.

So they set up a card table, a cigar box, a set of scales and a roadside stand, and put an ad in the local paper inviting people to pick what was left. People came, and the family sold all its fruit that year. The next year, they set aside a few acres for pick-your-own. That's how the family's pick-your-own business began. Today it includes Carter Mountain Orchard, where visitors aged 12 and over need an admission ticket on peak fall weekends, and October weekend tickets often sell out.

Read more in my Carter Mountain Orchard case study.

Field-Tested Play: Next time a crop, a buyer or a price lets you down, ask: "What is the cheapest way to let the public in on this?" Write down one test you could run in one weekend for under $100, such as a pick-your-own morning or a paid farm tour.

2. They Let Visitor Income Grow Until It Could Carry the Farm

In Thorntown, Indiana, Lucas and Dana Dull planted their first pumpkins in 2014, alongside the family's Christmas tree business. About five years later, their 20-day fall season was earning more than their four-week tree season. In 2019 they left row-crop farming and leased that land to a relative, DTN/Progressive Farmer reported.

They now host about 80,000 visitors a year across 45 activities, and they've built an email list of about 18,000 people.

3. They Did the Math and Stopped Betting on Commodities

Donnell Century Farm in Jackson, Tennessee, has been in the family since 1826. It grew corn, soybeans and cotton until 2019. Now the crop ground is leased to another farmer, and the family runs 30 attractions and a farm market with a butcher shop.

Andrew Donnell told DTN why: "None of the commodities are working well when I put a pencil to it." The farm also planted about 100,000 tulips, and food sales now make up about a third of gross revenue.

4. They Raised Their Own Price When Costs Rose

This is the move a grain farmer can't make. In September 2026, Eddie Lee Conner of Conner's A-Maize-ing Acres in Hilliard, Florida, told Action News Jax that diesel had passed $5 a gallon, and power and insurance were up too. So he raised admission by $3 to $22.95, his first increase in six years, and still expected about 20,000 visitors that fall.

A bushel of rice can't raise its own price. A ticket can.

Field-Tested Play: Write two numbers side by side: what a buyer pays you for your main crop, and what a family would pay to pick, taste or learn about it on your farm. If the second number isn't at least three times the first, your experience isn't packaged yet. For more examples, see Crop Prices Falling? How Farms Are Using Agritourism to Fill the Gap.

The Bigger Picture: Visitor Money Is Real, but Not Shared Evenly

According to the 2022 Census of Agriculture, US farms earned $1.26 billion from agritourism and recreational services. But only about 1.5% of farms reported any agritourism income, and the money is uneven. The 23% of agritourism farms earning $25,000 or more took about 91% of it, while nearly half earned under $5,000 for the year.

So it rewards farms that run it as a real business. I broke the numbers down in Agritourism Statistics 2026 and Is Agritourism Profitable?.

Reality Check: Agritourism will not save a farm that is already weeks from default. It takes time to build an audience, and it needs liability insurance, the right permits and, in many states, specific warning signs. Start it while you still have some cash and energy, not as a last move. Check your state's rules in Agritourism Laws by State and your coverage in Agritourism Insurance: What Coverage Do You Need?

What I Learned on My Own Farm

I'm the founder of Bloopy Durians in Bentong, Malaysia. Our durian seasons are short, roughly December to February and June to August, and outside those months there is no fruit to sell.

Two things keep money coming in. First, visitors. We welcome guests from all over the world, and many companies send their staff and management to the farm. Second, a WhatsApp list of loyal customers who buy durians whenever they're available. They pay us directly, and the customer relationship belongs to us.

Questions to Take to Your Lender and a Farm Bankruptcy Attorney

Winter is when many farmers sit down with their lender to plan next season's operating loan. Go into that meeting with questions. This is general information, not legal or financial advice.

For your lender:

What would you need to see from me to renew my operating loan next year?
Would a second income stream, such as pre-sold visitor tickets, count in my cash-flow projection?
Can we restructure payments to match when my farm actually receives cash?
Am I eligible for any federal fuel or disaster help? (See The $8 Billion Fuel Bailout Won't Save Your Farm for what USDA's Harvest Fuel Relief program does and doesn't cover.)

For a farm bankruptcy attorney, if things are serious:

Am I eligible for Chapter 12, or would Chapter 11 fit better?
Would income from agritourism count as farming income for Chapter 12, or could it affect my eligibility?
What can I do now, before filing, to protect the farm?

Field-Tested Play: Before your lender meeting, write a one-page plan for one small visitor test next season: what you'll offer, the price, how many tickets you'll pre-sell and what it costs to set up. A lender who sees cash arriving before the season is looking at a different farm. My How Much Does It Cost to Start an Agritourism Business? guide will help you price it.

Frequently Asked Questions

What is Chapter 12 farm bankruptcy?

Chapter 12 is a part of the US Bankruptcy Code created in 1986 for family farmers with regular annual income (family fishermen were added later). It lets them repay debt under a plan that usually lasts three years and can run up to five, while they keep farming.

How many farms filed for bankruptcy in 2026?

From January to September 2026, US farmers filed 292 Chapter 12 cases, nearly 19% more than the 246 filed in the same months of 2025, according to federal court data compiled by the National Agricultural Law Center. That counts cases, not separate farms, and the full-year total isn't known yet.

Why are farm bankruptcies rising in Arkansas?

Higher diesel and fertilizer prices add more than $343 million in costs for Arkansas farmers this year, according to the University of Arkansas Division of Agriculture, and rice acres fell to 901,000 from more than 1.25 million in 2025.

Can agritourism income help a farm avoid bankruptcy?

It can help by adding a second income that is often paid up front and doesn't depend on crop or export prices. But it takes time, insurance and permits, and it is not a quick fix for a farm already in default.

Does agritourism income count as farming income for Chapter 12?

That depends on your situation and how the income is earned, so ask a farm bankruptcy attorney. Chapter 12 requires that more than half of your gross income comes from farming, so a big visitor business could affect eligibility.

Your Next Step

The farms that came through hard years didn't wait for the bank to call. Find out which kind of visitor income fits your land, your crops and your time.

Take the Farm Readiness Quiz

Then download my free ebook, 150 Ways to Unlock Hidden Wealth From Your Farm, for ideas you can price and test this season.

Get the Free Ebook: 150 Ways to Unlock Hidden Wealth From Your Farm

P.S. Remember Jeff Rutledge, watching diesel go from $2.50 to almost $6 in a year? No farmer can control that number. But you can control whether all your income depends on it. Take the quiz today and find your second income before next season's loan meeting.

Stephen Loke of AgritourismSuccess.com, whose farm is featured in Bloomberg News and Asahi Shimbun. This article is general information, not legal or financial advice; talk to a qualified farm attorney or lender about your situation.