The number of bankruptcies among U.S. farms is rising at an alarming rate and expected to worsen in coming months as tariffs add to an already precarious financial situation for farmers.
According to the latest monthly survey, 62% of agriculture economists in the U.S. think America’s farm economy is currently in a recession, and 85% think the situation will accelerate bankruptcies and consolidation among farms and agribusinesses.
Bloomberg Law reports that family farm bankruptcies rose by 55% in 2024 from 2023, and there are signs that bankruptcies are trending even higher this year. Court records shows that farm bankruptcies in 2024 rose to 216, up 55% from 139 in 2023.
Court filings show bankruptcies are accelerating, with 82 recorded in this year’s first quarter, which was before Trump’s reciprocal tariffs were announced and nearly double the figure in Q1 2024. This is bad news for agriculture companies such as Archer-Daniels-Midland (ADM), Tyson Foods (TSN), and Nutrien (NTR), each of which is seeing their share price fall on a day when stocks are ripping higher.
Depressed Prices
Farmers across the U.S. are struggling with depressed prices and high input costs, plus the impacts of tariffs imposed by the world’s top buyers of American crops, notably China. Unpredictable tariffs, immigration overhauls, and federal program cuts have left farmers in a difficult financial situation, say agriculture economists.
Bloomberg Law notes that farm bankruptcies in America are now at their highest level since 2019, which was the height of the previous Trump administration’s trade war with China. According to the Federal Reserve Bank of Chicago, the number of farm loans at risk of defaulting is now at its highest level since 2020 at the outset of the Covid-19 pandemic.
Beyond tariffs, farmers in America are struggling with reduced prices for crops such as corn and soybeans, as well as a slowdown in the global economy that is hurting demand for agricultural products.
Is ADM Stock a Buy?
The stock of Archer-Daniels-Midland has a consensus Moderate Sell rating among six Wall Street analysts. That rating is based on six Hold and one Sell recommendations assigned in the last three months. The average ADM price target of $49.14 implies 1.80% upside from current levels.
