WASHINGTON – Trouble in farm country is spelling trouble for the Trump administration and Republicans in Congress as a loyal GOP constituency faces increased financial turmoil.
Farm bankruptcies in the nation, and especially in Midwestern states like Minnesota, are on the rise and expected to continue to climb.
Economic analyses, like the U.S. Department of Agriculture’s Farm Sector Income Forecast, show why farm failures are on the rise. The USDA predicts farm income will drop by $1.2 billion this year, even with the increased revenue from the only healthy sector of the farm economy – the beef cattle industry.
The American Farm Bureau Federation determined there were 315 farm bankruptcy filings last year, 13 in Minnesota. That represents a 300% increase in farm bankruptcy filings in the state over 2024.
Farm bankruptcies continued to grow this year, with another eight filed in the state in the first quarter of this year. No other state had more.
The filings, all under Chapter 12 of the bankruptcy code, are efforts by Minnesota family farms to restructure their debt and stay in business.
Chapter 12 bankruptcy protections were established after the farm crisis of the 1980s and are available to farmers who qualify and are no more than $12 million in debt.
But the filings don’t show the entire picture of what’s happening on family farms.
“Some people don’t do anything and just let everything go,” said David McLaughlin, an attorney in Ortonville who specializes in farm bankruptcies.
McLaughlin said the costs of farming – including the price of inputs and land rents – has rapidly increased and farmers in the state are struggling to keep their heads above water.
While McLaughlin said that the farm economy is cyclical, with historic ups and downs, he predicted the trough will get deeper before there is any relief. “I think it’s going to get far worse,” he said. “There is a bad period coming.”
Cameron Castillo, associate economist for the American Farm Bureau Federation, said increased Chapter 12 filings are an indicator of “a depressed farm economy.”
“But it’s definitely not the whole story,” he added.
Some farmers suffered the seizure of land, crops and machinery from banks and other creditors. Other American farmers have stopped tilling the soil and raising livestock to sell their land to suburban and exurban developers and for the construction of data centers, Castillo said.
“Many have compared this to the dire straits the farmers were in in the 1980s,” he said.
That crisis was the result of many factors, including high interest rates, a grain embargo on the former Soviet Union, drought and other weather conditions and plummeting commodity prices.
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Although the number of farm bankruptcies was higher in 2020 and 2021, there are fewer farms today as the nation has lost about 200,000 in recent years, the American Farm Bureau Federation says.
Before Minnesota farmers file for Chapter 12 protection, they must, under state law, try to find an agreement with their lenders.
The Minnesota Department of Agriculture said the total number of new mediation notices for the current fiscal year (October 2025-June 2026) has reached 1,429 cases. That is the highest fiscal year-to-date subtotal since 2020.
A political issue
Lucas Sjostrom, a dairy farmer in Brooten with a herd of 180 cows, said he and other dairy farmers in the state are trying to survive the latest hard times by sending more of their herd to the slaughterhouse as beef prices have skyrocketed.
“Normally, we sell 10% or 15% as beef, but now that has tripled or quadrupled,” Sjostrom said.
Hardship on the farm has become a political issue in this election year.
Democrats, including those in Minnesota, are reminding farmers of the steps President Donald Trump has taken that have roiled U.S. agriculture.
Those would include the imposition of tariffs on countries that once purchased plenty of U.S. farm products but don’t anymore to retaliate against the U.S. levies. Tariffs also increased the cost of other farm inputs.
The war in Iran, which resulted in blocking oil and fertilizer shipments from passing through the Strait of Hormuz, was also an unexpected blow.
“It’s kind of a perfect storm,” Castillo said of the challenges facing American agriculture.
He said a survey of 5,000 farmers the American Farm Bureau Federation conducted in March showed that 70% of the respondents said they could not afford to purchase all of the fertilizer they needed.
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Jake Johnson, the Democratic candidate running to unseat Rep. Brad Finstad, R-1st District, said farmers brought up tariffs and high fuel and fertilizer prices during a recent roundtable event in Fillmore County.
“One thing was clear from the conversation: farmers are working harder than ever, but Washington keeps making their jobs more difficult,” he said in a release.
At a Senate hearing last month, Sen. Amy Klobuchar grilled Secretary of Agriculture Brooke Rollins about the increase in farm bankruptcies in Minnesota and the nation.
“I just think those numbers don’t lie,” said Klobuchar, who is running for governor and is the top Democrat on the Senate Agriculture Committee.
Rollins told Klobuchar the number of Chapter 12 bankruptcies in the nation in the past year, 315, represented “just .03% of the total farms in America.” But she conceded that “there’s no doubt the farm economy is facing headwinds.”
Rep. Angie Craig, D-2nd District, who is running for the U.S. Senate, has also focused on farm bankruptcies.
“Farmers are hopeful that things will work out, because they always are, but they’re also being squeezed from all sides right now,” said Craig, the top Democrat on the House Agriculture Committee, at a press conference last week.
The event coincided with the release of a report by a political action committee known as Defend America Action on farm industry woes. The report is called “Donald Trump‘s Policies are Killing American Farmers.”
Trump has responded to the crisis in farm country by temporarily removing tariffs on fertilizer from Morocco, a nation that dominates the phosphate fertilizer market.
The president has also indicated he’d support the expansion of the H-2A visa program, which allows American farmers to bring foreign nationals to the United States for temporary or seasonal agricultural work.
Meanwhile, congressional Republicans are scrambling to find ways to help the nation’s farmers, a loyal GOP voting bloc, in an election year.
Rep. Glenn Thompson, R-Pa., has recently introduced a bill that would expand the H-2A visa program to help dairy farmers, who have historically been shut out of the program since they need year-round, not temporary, workers.
There are also bipartisan efforts to make E-15 – a gasoline that is fortified with ethanol — available in all states year round. And Senate Agriculture Committee Chairman John Boozman and the White House are pushing for an additional $11 billion in emergency aid for U.S. farmers to cover losses from depressed commodity prices and severe weather.
There’s also a push by congressional Republicans to finally pass a new farm bill, which is three years overdue.
Despite concerning indicators, not everybody sees gloomy skies on the horizon. While noting that prices of corn and soybeans have decreased by roughly 40% and 30%, respectively, since 2022, economists at the Federal Reserve Bank of Kansas City contend that the U.S. agricultural sector has remained relatively stable through “unprecedented changes in global trade and geopolitical turmoil.”
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