Hard times on the farm
According to an analysis from the Federal Reserve Bank of Minneapolis, the number of farms filing for bankruptcy has been growing this past year. According to statistics, 84 farms filed for Chapter 12 bankruptcy in Wisconsin, Minnesota, North Dakota, South Dakota and Montana in the 12 months ending in June 2018. In Minnesota alone, the number of bankruptcies more than doubled from eight in 2013-2014 to 20 this past year.
It’s not hard to understand why. Farming is tough business in the first place. It is highly dependent on weather, prices rise and fall depending on the harvests, so bumper crops have the unintended effect of driving down prices.
This year, of course, farmers have had to contend with the U.S. trade war with China. President Donald Trump’s tariffs on Chinese steel and other products resulted in retaliatory tariffs from China on U.S. crops, which has driven down prices even further. Dairy and beef farmers are feeling the economic pinch as well. Some of them are responding by getting out of the business altogether.
The pressure is on farmers and the bankers to get through this tough period, as they usually do. But it is also incumbent on the government to do what it can by passing a decent farm bill as soon as possible, and for President Trump to either settle his trade war or come up with a lot more money to support farmers he is victimizing.