MADISON — Wisconsin family farms faced unprecedented financial strain in 2025, with Chapter 12 bankruptcy filings surging from just two cases in 2024 to 16 cases by the end of 2025.
The dramatic increase reflects mounting pressures on agricultural operations across the state, where farmers grapple with rising interest rates, depressed commodity prices and regulatory constraints that limit their ability to set prices for their products.
“Why do we as a policy allow prices for products that farmers produce to be so low that they can afford to produce them?” said Claire Ann Richman, a member of Richman & Richman LLC.
The surge in Chapter 12 filings stems partly from changes to federal bankruptcy law. In 2020, Congress created Subchapter V bankruptcy for small businesses with a debt limit that fluctuated between $2.5 million and $7 million before settling at $3 million in 2024. This change pushed some farmers who previously qualified for Subchapter V into Chapter 12 bankruptcy, which accommodates agricultural operations with debts up to $12.5 million.
The shift reveals deeper structural problems facing family-owned farms, according to legal experts who work with agricultural clients.
“Farmers have all the problems that every small business has. And then you have to throw on top of it two other things. One is the subsidies and price regulation. Farmers don’t get to charge whatever they want for their milk. And then, of course, weather,” said David Krekeler, a practicing attorney with Krekeler Law, S.C. “They still have trouble with labor, as do many other industries. But interest and inflation have been a killer for farmers.”
Katy Schultz, owner of Tri-Fecta Farms in Fox Lake, described the current environment as a “generational storm” that threatens the viability of family farming operations.
“Right now we’re in a place where our commodity prices are extremely low. Nothing right now is going to make you a lot of money. We’re seeing interest rates really — I mean, we’ve seen them go from 3 to 4% and now we’re at anywhere from 8 to 11%. And so that just makes things really difficult to continue to operate on a long-term basis,” Schultz said.
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