Aug 6, 2020 - Economy

More farmers are declaring bankruptcy as coronavirus upends industry

Orion Rummler

A man wearing a mask carries a plastic container of corn — Aldo Perez of Jacob's Farms restocks corn at a farmers market in Benicia, Calif.. Photo: Jessica Christian/The San Francisco Chronicle via Getty Images

More farmers are declaring bankruptcy, despite a $7 billion injection from the Department of Agriculture to mitigate losses caused by the coronavirus pandemic, the Wall Street Journal reports.

Why it matters: Farmers found themselves at the center of industries hardest-hit by the crisis as the pandemic slashed commodity values, cut off supply chains and closed markets around the globe.

By the numbers: 8% more farmers filed for bankruptcy in the 12-month period ending June 30 than last year. Chapter 12 bankruptcies have been gradually increasing since 2016.

580 farmers declared bankruptcy in the last 12 months, while 535 did the same in the period ending in 2019.
Hog farmers have lost almost $5 billion in potential and actual profits for 2020, per data from the National Pork Producers Council.
Agricultural firms in California could lose as much as $8.6 billion, per a study commissioned by the state's Farm Bureau Federation.

What's next: The Trump administration is expected pay farmers a record $33 billion this year, per the University of Missouri’s Food and Agricultural Policy Research Institute.

If more aid isn't extended to farmers after coronavirus relief expires at the end of the year, farm income is forecast to fall by 12% in 2021, per the Food and Agricultural Policy Research Institute.

Go deeper: Farmers Business Network raises $250 million at $1.75 billion valuation

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More farmers are declaring bankruptcy as coronavirus upends industry

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