Farm Bankruptcies on the Rise
Last year saw a significant increase in farm bankruptcies, with 37 farms going bankrupt in the state of Nebraska, the second-highest number of farm bankruptcies in the country. This increase is following a trend of rising annual farm bankruptcies in Nebraska and throughout the USA. This is a serious economic concern in our state, as agriculture is the backbone of Nebraska and employs more people than any other industry. While there are nationwide programs and trade deals that should help ease this situation in the future, many farmers are having difficulty breaking even and keeping a farm afloat. If your farm is at risk of going under, you may want to contact a Nebraska agricultural law attorney to discuss options and get assistance.
Why are Farms Going Bankrupt?
There are several factors responsible for the increase in farm bankruptcy, including:
- Trade relations with China. The tariffs imposed on trade with China have severely impacted the export of agricultural products to China (the country with the largest population on Earth and one of the largest consumers of farm products). It is estimated that Nebraska farmers could lose up to $1 billion due to tariffs, in some cases pushing individual farms too far below the line to survive.
- Bad weather. A recent spate of bad weather added insult to injury to Nebraska farmers, destroying crops and killing livestock. While this is an expected risk in the agricultural business, coping with bad weather on top of economic and trade trouble creates an exceedingly dangerous financial environment.
- Federal ethanol waivers: Under the US Renewable Fuel Standard, oil refineries are required to mix biofuels (like corn-based ethanol) into their fuels – reducing dependency on foreign oil. Biofuel is a big part of the agricultural economic machine, and keeps the money in the US, supporting local farmers. However, the government has recently issued many full waivers to oil refineries – cutting the demand for agricultural ethanol dramatically and further distressing troubled farm finances.
- Delay in implementing the US-Mexico-Canada Agreement (USMCA): The USMCA is expected to bring in an additional $2 billion in annual agricultural revenue, which would be a significant boost to the industry. Unfortunately, USMCA is not yet ratified by the US or Canada, and we aren’t likely to see it implemented until sometime in 2020.
The fact is that times are hard for farmers all over the country and especially in our great state of Nebraska.
While nobody can predict the future, there is a good chance that we will see improved trade relations with China, the USMCA ratified, and other economic boosts for farmers in the not-too-distant future. However, these may be too late for many of our Nebraska farmers, and it may take time for the increasing trend of bankruptcies to revert.
How an Attorney Can Help with Bankruptcy Issues
If you are a Nebraska farmer that is struggling financially and considering filing for Chapter 11 or Chapter 12 bankruptcy, hiring an attorney is critical. The legal processes involved can be complicated, and errors in filings can be very costly. Attempting to wade through the process alone while still working to keep your farm afloat may not be a good idea.
Our team at Bottlinger Law L.L.C. has the experience, knowledge, and legal proficiency to help you make it through this challenging time. As a Nebraska native, our founder, Jason P. Bottlinger, has an in-depth understanding of agriculture and the unique challenges that farmers face. Give us a call today at (402) 505-8234 for a free consultation. Even if you are only considering bankruptcy as a possibility, we can help answer your questions and give you legal insight into your situation and how to proceed.
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