More Minnesota farmers filed for bankruptcy in 2025, as high input costs and low prices for most agricultural commodities squeezed profit margins, the American Farm Bureau Federation reported earlier this month.
Last year, 13 Minnesota farmers filed for Chapter 12, a section of the U.S. bankruptcy code that allows family farmers and fishermen to restructure certain debts. Four Minnesota farmers filed Chapter 12 in 2024.
Across the Midwest, bankruptcy filings rose 70% in 2025 following years of rising expenses and declining income, the Farm Bureau said.
“This is something that we’re watching with a fair bit of anxiety. … We’re hearing from our members that farms are looking at a second year in a row of negative margins,” said Anne Schwagerl, vice president of the Minnesota Farmers Union, in an interview.
The Farm Bureau’s figures may underplay the extent of the financial challenges facing farmers in Minnesota and beyond. Because Chapter 12 filers must earn a majority of their income from farming, the growing number of family farmers who rely on nonfarm income to make ends meet may not be eligible. They may have no choice but to cease operations altogether as debts mount, the Farm Bureau said.
The potential political consequences are clear: The farming sector remains solidly Republican, and the number of farmers in Minnesota's Democratic-Farmer-Labor Party has long been dwindling. But even a marginal reduction in rural Republican turnout could be trouble for the GOP in what’s expected to be a difficult midterm election.
The Farm Bureau said Midwest farmers are under pressure from persistently low prices for row crops, such as corn and soybeans; high input weakening markets for dairy and most animal protein; and growing reliance on high-interest loans. Elevated prices for fertilizer, a significant cost center for farmers, further crimp margins.
The “compounding crises … out there in farm country” could push the next generation out of the business entirely, said Schwagerl of the Farmers Union, which pushes for progressive, farmer-friendly policies at the state and federal levels.
“Younger producers are on the margins already [and] don’t have the kind of working capital to just chew up,” she said. “Everything you’re making is being invested back into the farm. … Those first few years are so capital intensive.”
President Trump’s unilateral import tariffs haven’t helped, Schwagerl added. China, a major exporter Trump has repeatedly assailed for “unfair” trade practices, halted soybean purchases for several weeks last fall in a direct rebuke to Trump and his rural voting base.
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China wound up buying soybeans from Argentina, which received a $20 billion loan in the form of a currency swap from the Trump administration. As part of the negotiations to end the trade war, however, China agreed to resume buying American soybeans.
Farmers’ fortunes may not change much in 2026. Farm income will be lower over the next 10 months than in 2025, which was a far weaker year for farm income than initially appeared, according to recent historical data and forecasts the USDA released earlier this month.
For months, Democrats across farm country have called out the Trump administration over what they say are its chaotic and counterproductive agriculture policies. Democratic National Committee chair Ken Martin, who had led the Minnesota DFL, renewed that criticism last week.
“Trump is single-handedly orchestrating a rural recession, with Minnesota farmers and consumers paying the price,” Martin said in a statement to the Reformer.
Schwagerl, too, characterized the current moment as “a policy-driven downturn.”
Trump’s ag team sees things differently.
“President Trump is the most pro-farmer President of our lifetime,” a USDA spokesperson told the Reformer.
After inheriting “one of the worst farm economies the country has experienced in decades,” Trump has engineered over two dozen international trade deals boosting U.S. agriculture exports, lowered taxes and shored up the federal farm safety net, the spokesperson said.
Though high input costs and low margins have squeezed Midwest farmers for years, Farm Bureau data belies the USDA’s claim that Trump inherited a generationally terrible farm economy. Nationwide, farm bankruptcies peaked at 599 in 2019 and dropped slightly in 2020 before falling sharply during former President Biden’s first two years in office. They hit a 10-year low of 139 in 2023. Farm income hit a record high in 2022, according to the Farm Bureau.
The Trump administration plans to dole out billions of dollars in aid to farmers and rural communities this year.
In December, the USDA said it would issue up to $12 billion in one-time “bridge payments” to farmers to offset “temporary trade market disruptions and increased production costs that are still impacting farmers following four years of disastrous Biden Administration policies.”
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The bridge payments follow more than $30 billion in ad hoc assistance the USDA doled out last year, including more than $9 billion to row crop farmers affected by falling commodity prices, and more than $6 billion to farmers hit by severe weather in 2023 and 2024. Those programs paid out nearly $1.3 billion to Minnesota farmers.
All this aid is meant to tide farmers over until key ag provisions of the One Big Beautiful Bill Act take effect later this year, the USDA said in December. Passed without a single Democratic vote last July, the spending bill boosts U.S. farm safety net funding by more than $52 billion, according to an analysis published by Kansas State University shortly after Trump signed the law.
Schwagerl said her group is waiting for follow-through on those commitments.
“We’ve heard a lot of talk from the administration, but the action [so far] does not necessarily match up,” she said. Some Minnesota farmers are deeply skeptical that promised aid will materialize, while others are more inclined to take the administration at its word — and still on board with its ag policy in general, she added.
Schwagerl said Friday’s U.S. Supreme Court ruling curbing Trump’s authority to impose broad “emergency” tariffs without congressional approval was “favorable” for Minnesota’s ag economy, given its reliance on exports. But the court did not weigh in on whether consumers or others who paid the tariffs are due refunds, an omission that could tee up years of legal wrangling.
In any case, it’s unclear how quickly farmers will see relief, Schwagerl said.
“[Now we] have to go back to our trading partners and try to restore relations,” she said.
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