‘A real farm crisis’: Illinois farm bankruptcies rise for 3rd straight
year
[June 30, 2026]
By Tara Sun and Medill Illinois News Bureau
SPRINGFIELD — With the growing season well underway in Illinois, farmers
once again are struggling to turn an abundant harvest into survival.
In 2025, family farm bankruptcies surged 46% nationwide — reaching 315
filings and marking the third consecutive year of increases. The Midwest
recorded 121 filings in 2025 — up 70% from the prior year.
The trend has only accelerated. In April alone this year, 62 Chapter 12
farm bankruptcies were filed nationwide – a 130% jump from the prior
year and the highest monthly total since February 2020. The USDA
projects total farm debt will rise 5.2% to a record $624.7 billion in
2026, with 330 bankruptcy cases filed.
“I’m scared about there being a real farm crisis,” said Eliot Clay,
executive director of the Association of Illinois Soil and Water
Conservation Districts. “This could come down to people being able to
save their farms – just knowing that they could put it into some
conservation easement or something. Like, they need anything that they
can get.”
For Illinois, the crisis is playing out as lawmakers just finished a
budget session that delivered few meaningful results for an industry
under siege. Gary Asay, who has farmed in Illinois since 1976 and sold
crop insurance for more than 20 years, sees clear reasons to worry.
“The increase in the number of bankruptcies and the increased buying of
higher-level crop insurance are both signs of the stress that’s in the
industry,” Asay said. “Farmers are under stress. They may be having to
borrow more money. Therefore, they want more protection.”
Crop insurance, he pointed out, can’t fully protect farmers from losses.
The most common policy, Revenue Protection, covers only up to 85% of
projected revenue.
“Even with the best crop insurance coverage you can buy, if that
coverage is below your cost of production, you can still lose money
without even collecting,” Asay said.
In 2025, U.S. soybean production totaled 4.26 billion bushels, with the
average yield per acre estimated at a record high 53.0 bushels per acre.
Illinois alone harvested more than 639 million bushels in 2025.
Then, in February 2025, the U.S. imposed a 10% tariff on Chinese
products. And China – once the world’s largest buyer of U.S. soybeans –
stopped purchasing U.S. crops. Last September marked the first month
since 2018 that imports from the U.S. fell to zero, according to China’s
General Administration of Customs.
Farmers had entered the 2025 season with a smaller safety net after the
projected price for the crop insurance guarantees fell by 8.7% that
year. The drop meant less protection heading into the spring planting.
But because yields were high, most farms still generated revenue above
their guaranteed floor. Although farmers grew plenty, they sold every
bushel for less than it cost to produce.
“A lot of farmers cannot sell their corn or soybeans at a profit right
now, just because the price is so low,” Asay said.
Bankruptcies in agriculture rarely follow a single bad year. For U.S.
farmers, the financial squeeze began well before 2025.
Real estate debt – tied to the land farmers rent or own – is expected to
reach $404.3 billion in 2026, a reflection of the high cost of farmland
that has squeezed so many operators.
“Overhead costs represent the largest cost component on the U.S. farm,
accounting for nearly one-half of total costs during the 2020-24
period,” said Joana Colussi, a research assistant professor of
agricultural economics at Purdue University, citing Purdue data. “Eighty
percent of the farmers in the Midwest, they rent the land.”
Colussi has tracked the financial squeeze on farmers across the Midwest.
When land prices rise, so does the rent – a fixed cost that farmers pay
regardless of crop prices or yields. That leaves farmers searching for
ways to keep operations going. “The way to continue being competitive is
to try to reduce the costs,” she said.
Diversification into niche markets — non-GMO (genetically modified
organism), organic or specialty crops — offers one path forward, though
Colussi mentioned it’s not a quick fix
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A tractor sits on a Christian County farm. (Capitol News Illinois
file photo by Jerry Nowicki)
Farm crisis reminiscent of the 1980s.
Rep. Charlie Meier, R-Okawville, who is a farmer himself, described the
current moment as reminiscent of the 1980s farm crisis. “There were
massive bankruptcies in the ‘80s,” Meier said. “A lot, a lot of farms
went under.”
The trigger now and then is the unstable export market. But the
financial strain was already visible. In 2025, the Federal Reserve Bank
of Chicago reported that 5.6% of farm loans were classified as having
“major” or “severe” repayment problems — the highest since 2020. That
means borrowers were falling behind on payments or reworking their
loans. It’s an indicator that many farmers were struggling to repay old
debt while borrowing more to plant the next crop.
Ahead of the 2026 legislative session, farm groups pushed for estate tax
relief, one of the Illinois Farm Bureau’s top priorities, along with
payouts for farmers to protect their land and programs that help them
find new buyers for their crops. But in a tight budget year, those
priorities stalled.
The Illinois Farm Bureau did not secure passage of the Family Farm
Preservation Act, which would have raised the state’s estate tax
exemption from $4 million to $6 million, reducing the tax burden on
inherited farms and making it easier for young farmers to keep the land
and operations intact.
State Rep. Sharon Chung, D‑Bloomington, who serves on the House
Agriculture Committee, was also unable to get a relatively small boost
for farmers through this session.
She pushed for a $10 million increase in funding for Soil and Water
Conservation Districts through House Bill 4755. But the final Fiscal
Year 2027 budget held funding at $4.5 million for the third straight
year, far short of what advocates say districts need. These districts
are trusted by local farmers because they work alongside them, offering
advice on how to farm more efficiently at a lower cost.
Clay, the district’s executive director, said the biggest need is giving
districts “the financial certainty that they can hire and keep people
hired.”
Without that, districts see constant turnover. That means farmers lose
access to experienced local advisors who understand their land and can
help them navigate conservation practices that might save money and keep
them afloat.
“Agriculture is the No. 1 producer for our economy in Illinois,” Chung
said. “Anything we can do to help prop that up is so important.”
Despite those unpassed bills, farmers did secure a few victories. The
final budget included changes to the Farmland Assessment Law — extending
a tax break for conservation practices through 2031 — and avoided cuts
to key programs, including the Illinois Department of Agriculture,
agricultural education and cover-crop incentives that enrich the soil.
While farmers had hoped Springfield could do more, they also recognized
that forces shaping the industry go far beyond the influence of
legislators: falling crop prices, an unstable export market and rising
costs.
As farmers face mounting distress, the history of the 1980s hangs over
the heartland.
“There’s just not enough room for error right now. Something that
happened in the past can take down a farmer today,” Asay said.
Tara Sun is a graduate student in journalism with
Northwestern University’s Medill School of Journalism, Media and
Integrated Marketing Communications, and is a fellow in its Medill
Illinois News Bureau working in partnership with Capitol News
Illinois.
Capitol News Illinois is
a nonprofit, nonpartisan news service that distributes state
government coverage to hundreds of news outlets statewide. It is
funded primarily by the Illinois Press Foundation and the Robert R.
McCormick Foundation. |
