Arkansas led country in farm bankruptcies in 2025

Arkansas led the entire country in Chapter 12 farm bankruptcies last year, and if projected net-income this year is an indicator that problem may only get worse. The state had 33 Chapter 12 bankruptcies last year, more than double the previous year, according to the American Farm Bureau Federation.

A Chapter 12 bankruptcy filing allows farmers to restructure debts in order to avoid losing a farm. Georgia finished second while Iowa finished third in such filings.

Low commodity prices, skyrocketing fuel and fertilizer prices due to the war with Iran, higher input costs and other factors will likely push the state’s net farm income down this coming year.

The Rural & Farm Finance Policy Analysis Center’s spring report is forecasting Arkansas’ net farm income to be $3.38 billion in 2026, relatively stable compared to 2025’s $3.32 billion. Arkansas’ crop and livestock receipts — the value of production — is projected to fall to $11.8 billion, down $626 million or 5% from 2025 and $2.2 billion, or 16%, from 2022. Crop receipts are projected to decline for the third straight year from a high of $5.53 billion in 2023 to the current 2026 projection of $4.17 billion mostly driven by depressed commodity prices.

“Overall, the 2026 farm income outlook reflects a shift away from broad-based market-driven gains toward increased reliance on policy support,” the report noted.

“It’s very concerning,” said Hunter Biram, extension economist for the University of Arkansas Division of Agriculture, one of the authors. “Sustained production with no real drivers in demand continues to keep prices low. From a historical perspective, crop receipts minus expenses have been negative seven of the last 10 years, with the greatest losses being in 2024 and 2025 at around $1.5 billion each year.

“The average negative net farm income for Arkansas over this span is $1 billion per year,” he said. “The positive crop incomes in the other three years were $120 million, $19 million, and $9 million, respectively, and were driven by elevated prices from strong demand post-COVID.

“Since 2022, crop prices have fallen 30%, while production costs have remained elevated — about 20% above pre-Russian invasion of Ukraine levels.”

Current total production expenses are projected to increase by $80 million, driven largely by a $212 million increase in expenses for fertilizer and fuel attributed to the attacks by the U.S. and Israel on Iran.    

“Many farmers are once again in a year where choosing a crop that has the greatest likelihood of lowest loss is the best-case scenario,” Biram said. “The only increase that is positive that we’re seeing in 2026 is going to be for government assistance — an increase of $1.12 billion to $1.75 billion total. That $1.75 billion is the only thing keeping that farm income afloat. It’s the best way to put it in 2026.”

The $1.12 billion represents a 179% increase over the previous year.

In previous reports tight cattle supplies and higher meat prices helped buoy net farm income in Arkansas. In this edition, however, livestock agriculture receipts were expected to decline $424 million, a drop of 5% to $7.64 billion in 2026. The losses were “driven by a 48% decline in egg receipts,” division economist James Mitchell said. He said the livestock numbers should be taken with a grain of salt.   

“Some of the decline in Arkansas farm income is attributed to lower egg receipts,” he said. “We expect an upward revision to the forecast for the fall release as it does not currently reflect conditions in Arkansas and is more a reflection of conditions faced by the U.S. egg industry and amid ongoing HPAI impacts.”

Egg receipts were expected to decrease by $485 million in 2026. Broiler receipts were expected to rise 1% to $5.51 billion this year. Cattle and calves were projected to rise 2% to $975 million and turkey receipts were expected to increase 4% to $425 million.

In 2027, broilers are projected to increase another 1% in 2027; cattle and calves are expected to decline 7% and turkey receipts are expected to decline by 5%.  

Crop commodities were also expected to fall 5%, down $202 million. Only soybeans were expecting any positive news in 2026, with receipts forecast to rise 24% to $1.72 billion. Corn is projected to be down 6%to $706 million; Rice is projected to be down 27% to $920 million; and cotton is projected to be down 21% to $139 million.

The Farm Income Outlook for Arkansas is co-published by the University of Arkansas Division of Agriculture and RaFF at the University of Missouri. RaFF collaborates with several states to develop farm income projections with local expertise, offering additional coverage of key Midwestern and Southern regions.

Editor’s note: Mary Hightower with the UA Extension Service contributed to this article.