Agricultural bankruptcies are rising in the midst of the low prices of crops, while Trump considers a rescue of up to $ 14 billion

In the second quarter, there were 93 deposits, according to the Federal Reserve Bank of Minneapolis, against 88 in the first quarter and almost double from 47 at the end of 2024.

It is still well below the recent summit of 169 at the beginning of 2020, and the deposits took place during the two years that followed. But since 2022, agricultural bankruptcies have tended to reach.

This coincides with higher production costs and diving of crop prices. For example, corn prices have dropped by around 50% since 2022, while soy prices are down around 40%.

More recently, President Donald Trump’s trade war this year prevented China, traditionally an American soybean buyer, from placing orders with American farmers, who are faced with an uncertain harvest season.

But the prices of cultures have been low in most of the last decade, with the exception of a Pike brief during the pandemic, according to the Fed of Minneapolis.

And although the agricultural department has planned that agricultural income will increase this year, around three quarters of this growth will come from an expected increase in government payments, he added.

The recent study of the Federal Reserve on Agricultural Financial Conditions has revealed that lower income has reduced liquidity for farmers, which increases the request for financing.

At the same time, credit conditions deteriorated with around 30% of respondents in the districts of Chicago Fed and Kansas City Fed declaring reimbursement rates a year ago, while the share of the Minneapolis Fed region was around 40% and that St. Louis Fed was 50%.

Admittedly, the recent point of bankruptcies does not mean that farmers go bankrupt, underlined the Minneapolis Fed. A deposit of Chapter 12 can help them avoid total liquidation and allow them to continue to work, perhaps on a smaller scale after a certain restructuring.

However, agricultural trade groups have called for Trump administration to get help to stimulate the demand for American cultures, because they sound the alarm on a crisis in the agricultural economy.

This includes the word of a commercial agreement with China to start buying American soybeans again and requires fuel with higher mixtures of ethanol, which can be made from corn.

“Soy producers are under extreme financial stress,” said American Soybean Association in a letter to Trump in August. “Prices continue to drop and at the same time our farmers pay much more for inputs and equipment. American soybean farmers cannot survive an extended commercial dispute with our biggest customer. ”

The Big Beautiful Bill Act signed in July included around $ 66 billion in agriculture -oriented expenses. The vast majority, around 59 billion dollars, is assigned to improvements in the safety of agricultural safety nets.

But Trump also suggested that pricing income could be used to help farmers, and sources have declared to Wall Street Journal On Thursday, the administration is considering a bailout of $ 10 billion at $ 14 billion with distributions potentially from the coming months. During Trump’s first term, farmers obtained $ 23 billion in the midst of a previous trade war with China.

But the CEO of American Soybean Association, Stephen Censky, said Farm Journal Agweb Last month, this government aid was “capitalized” in the longer term, which means that payments offer global relief limited to farmers who later see rents and other costs also increase.

“It is difficult, and I can hear it in the stress of the voice of our members. Our members and our board of directors are really concerned at the moment,” said Censky, who was deputy secretary in agriculture at the Trump’s first term. “Some say that if things do not turn around, if we do not recover the markets or if we get economic aid – which is not our first choice – it could be their last year in agriculture. It is quite frightening.”

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