“We’re hearing from our members that farms are looking at a second year in a row of negative margins,” Anne Schwagerl, vice president of the Minnesota Farmers Union, said in an interview. (Photo: Getty Images)
More Minnesota farmers will file for bankruptcy in 2025 as high production costs and low prices for most agricultural commodities squeeze profit margins, the American Farm Bureau Federation said in a report report published earlier this month.
Last year, thirteen Minnesota farmers filed for Chapter 12 assistance part of the US Bankruptcy Code which allows family farmers and fishermen to restructure some of their debts. Four Minnesota farmers filed Chapter 12 in 2024. In the Midwest, bankruptcy filings increased 70% in 2025 after years of rising expenses and falling incomes, the Farm Bureau reported.
“We’re watching this with some concern … we’re hearing from our members that farms are having a second year in a row of negative margins,” Anne Schwagerl, vice president of the Minnesota Farmers Union, said in an interview.
Farm Bureau data may not reflect the scale of the financial challenges facing farmers in Minnesota and beyond. Because Chapter 12 filers must derive the majority of their income from farming, a growing number of family farmers who make ends meet on non-farming income may not qualify. Farm Bureau says that as debt mounts, they may have no choice but to cease operations altogether.
The potential political consequences are clear: The agricultural sector remains solidly Republican and the number of farmers in the Democratic-Farmer-Labor Party has long been failing, but even a marginal decline in rural Republican turnout could pose a problem for the GOP in what is expected to be a complex midterm election.
Farm Bureau says Midwestern farmers are under pressure from persistently low prices for row crops such as corn and soybeans, high inputs, weakening markets for dairy and most animal proteins, and a growing reliance on high-interest loans. Increased fertilizer pricessignificant cost center for farmers, further crushing margins.
Schwagerl of the Farmers’ Union, which advocates for progressive, farmer-friendly policies at the state and federal levels, said “growing crises … in the countryside” could push the next generation out of business entirely.
“Younger producers are already on the margin (and) don’t have the working capital to just chew it up,” she said. “Everything you earn is invested back into the farm…those first few years are very capital intensive.”
Schwagerl added that President Trump’s unilateral import tariffs did not assist. China, a major exporter that Trump has repeatedly accused of “unfair” trade practices, halted soybean purchases for several weeks last fall. a direct rebuke to Trump and his rural voting base.
China is over purchasing soybeans from Argentinawhich received a $20 billion loan from the Trump administration in the form of a currency swap. However, as part of negotiations to end the trade war, China agreed to resume purchases of American soybeans.
The fate of farmers in 2026 may not change much. Farm income will be lower over the next 10 months than in 2025, which itself was a much weaker year for farm incomes than first appeared, according to the latest historical data and forecasts released by the U.S. Department of Agriculture earlier this month.
For months, Democrats in farm states have criticized the Trump administration for its tumultuous and counterproductive farm policies. Democratic National Committee Chairman Ken Martin, who previously led the Minnesota DFL, repeated that criticism last week.
“Trump is single-handedly orchestrating a rural recession, and Minnesota farmers and consumers are paying the price,” Martin said in a statement to the Commission Reformer.
Schwagerl, too, characterized the current moment as a “politically driven economic downturn.”
Trump’s AG team sees things differently.
“President Trump is the most pro-farm president of our lifetime,” a USDA spokesman said Reformer.
After inheriting “one of the worst farm economies the country has experienced in decades,” Trump crafted more than two dozen international trade agreements that boost U.S. agricultural exports, cut taxes and strengthen the federal farm safety net, a spokesman said.
While high production costs and low margins have oppressed Midwestern farmers for years, Farm Bureau data contradicts the USDA’s contention that Trump inherited an agricultural economy that has been dismal for generations. Nationwide, farm bankruptcies peaked at 599 in 2019, dropped slightly in 2020, then declined sharply during former President Biden’s first two years in office. In 2023, they reached a 10-year low of 139. According to the Farm Bureau, farm incomes reached record levels in 2022.
The Trump administration plans to allocate billions of dollars this year to assist farmers and rural communities.
In December, the USDA announced it would issue bonds up to USD 12 billion in the form of one-off “bridge payments” to farmers to offset “temporary trade market disruptions and increased production costs that continue to hit farmers after four years of disastrous Biden administration policies.”
The bridge payments follow more than $30 billion in ad hoc aid from the USDA last year, including more than $9 billion for row crop farmers under the influence of falling raw material prices and over $6 billion farmers affected by complex weather in 2023 and 2024. Nearly $1.3 billion has been paid out to Minnesota farmers under these two programs.
All this aid is intended to assist farmers survive until key agricultural 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, OBBBA increases U.S. farm safety net funding by more than $52 billion, according to analysis published by Kansas State University shortly after Trump signed the bill.
Schwagerl said her group looks forward to implementing these commitments.
“We have heard a lot of talk from the administration, but the actions (so far) are not necessarily what we expected,” she said. Some Minnesota farmers are deeply skeptical about the implementation of promised aid, while others are more willing to take the administration at its word and generally continue to follow its farm policies, she added.
Schwagerl said Friday’s U.S. Supreme Court ruling limiting Trump’s authority to impose broad “emergency” tariffs without congressional approval was “beneficial” to Minnesota’s agricultural economy, given its dependence on exports. But the court it didn’t dare on whether consumers or others who have paid tariffs are entitled to a refund, which could arise years of legal disputes.
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.
This story was originally produced by Minnesota reformerswhich is part of States Newsroom, a nonprofit news network that includes the Ohio Capital Journal and is supported by grants and a coalition of donors as a 501c(3) public charity.
