Over the summer Farm Bureau released a startling report, showing Kansas was second in the nation in Chapter 12 bankruptcies, with 39 over a one-year period dating back to June 2018.
To put that in perspective, California and Texas had 25 and 23, respectively, during the same time period. Wisconsin leads the country with 45.
Kansas saw a 50% increase in filings in the last year, rising by 13 from the previous year.
The Family Farmer Relief Act of 2019 allows more family farmers to seek relief under the program by raising the Chapter 12 bankruptcy operating debt cap to $10 million, up from $4.1 million, making it fit the needs of most family run operations.
The Midwest has been hit the hardest by low commodity prices and the trade war with China. Overall, there have been 240 filings in North Dakota, South Dakota, Nebraska, Iowa, Michigan, Illinois and Kansas, which is a 12% increase.
While this hasnt been the case in Allen County as of yet, it doesnt surprise Tom Strickler, vice president at Community National Bank in Iola.
I havent read that report, but it honestly does not surprise me due to the circumstances, Tom said. Fortunately, for our customers here in Allen County this has not been an issue. We have been very fortunate over the last two years in this area, to not really be affected as much as some by the declining price of commodities. I dont know a lot about Chapter 12 bankruptcies, but that is a good problem to have because it means we are not feeling the effects as much as other areas in the state.
His brother Steve Strickler, who runs Strickler Holstein Farms, said he has been struggling to keep his business afloat.
Steve said the biggest problem affecting all of agriculture has been political interference.
The year 2018 was by far the toughest I have ever had here. Last year alone, 800 dairy farmers in Wisconsin had to get out of the business. Over half of them filed bankruptcy. Think about that for a minute, think about what that does to your rural communities, he said.
When Steve returned to the family farm back in 1978, Allen County had 32 dairy farms. Today, his is the last one standing. Still, he feels his days are numbered.
Steve said in order to have a successful dairy, one needs to be able to export 20% of their product. The U.S. trade war with China,however, has wiped out that market.
These are relationships that have literally taken us decades to build and they were taken away suddenly. It was basically overnight. Everything is going good, you have the top breeds as far as genetics go, youve built your business up. And then you take away the Chinese market. Overnight you can have a relationship disappear with one a single tweet, he said.
Steve said while big business has taken over in the U.S., that is not the case in Canada, where small dairies are thriving.
I have been to Canada three times in the last six or seven months and the first thing they always ask is, What in the heck is your President doing?
