Data from federal courts show that Arkansas led the nation in Chapter 12 bankruptcy filings in the third quarter of 2026 with 12. So far in 2026, 32 agricultural operations in Arkansas have filed for Chapter 12 bankruptcy. In all of 2025, that number was 33.
Harrison Pittman is the director of the National Agricultural Law Center. He says Chapter 12 is specific to agricultural operations and was created in the midst of the 1980s farm crisis.
Pittman: And it was a way of having a reorganization. So it’s a reorganization type bankruptcy, where the goal is to ultimately enter the court system with this Chapter 12 filing, propose a plan to pay back over three to five years typically and you restructure some debt. You move, basically try to get the operator to where they can continue to farm and hopefully they come out on the other end able to do so.
The easiest comparison would be with what’s known as a Chapter 7 bankruptcy, where Chapter 7 is available to all kinds of businesses and individuals, not just ag. But that’s a discharge bankruptcy where a person files bankruptcy, all their stuff is put into the pot, so to speak, the estate, and it’s sold off. And then those proceeds are used to pay off creditors in the ranking system that’s created with bankruptcy law.
And Chapter 11 is another type of reorganization. There are a lot of ag operations, that’s not just specific to ag, but ag operators can at times file under Chapter 11 and many have, because they’re not eligible. There’s some eligibility requirements that come along with Chapter 12. And sometimes individuals, their percentage of on-farm and off-farm income makes them ineligible.
To put this in context, in Arkansas in 2024, there were 16 Chapter 12 bankruptcies. Sixteen, and that made us number two in the country. In 2025, we had 33 Chapter 12 bankruptcies. That made us number one in the country. Through three quarters of 2026, we’re currently at 32.
Moore: Let’s zoom out just a little bit here if we can. Why would a farm declare bankruptcy?
Pittman: Survival, in a word. You basically are looking at a picture of, you’re looking at crop prices, commodity prices in general, how that compares with the cost of production, which is a fancy way of saying input costs. So fuel, it could be interest rates, lending, financial inputs. And the combination of that just really impacts profitability, and particularly on the row crop side of the ag industry. We’re three-plus years deep into a downturn. A lot of financial strain.
And now more recently, everybody knows there’s an increase in the cost of just starting a vehicle that runs on fuel. So if that’s your car in your driveway, if that’s your lawn mower, if you’re a fishing guide and you’re hauling people around out here on lakes and rivers, over-the-road truck driver or if you’re a farmer and your fuel for irrigation, fuel for tractors.
Financially, I do notice the cost of gas, but I can kind of stomach it in a sense, because I don’t have that far to go and push comes to shove, I can ride a bike or walk. So like, I can do that, but if my business model depends on firing up something that is $7 or $6 a gallon and I gotta run that thing, that is how I make my money, that’s rough. And you compare somebody, over-the-road truck driver, which I’m factoring into the cost of distribution of products. I think all that ties into this financial picture.
But the shortest answer to your question about why, survival. Somebody’s trying to figure out, I want to continue farming. My previous generations of my family did this. I want to continue it. It’s in my blood. I think I have a noble calling. And so you’re trying to figure out a way to do that, but your profitability is being outpaced by cost and for too prolonged period of time.
Moore: I’m someone who grew up in southeastern Illinois, which is row crop country there. I mean, I grew up surrounded by cornfields one year, soybeans the next year and wheat in the winter. So I’m highly familiar with this world of row crop farming. And I think about the commodity element of these sorts of items here as well. Is there any sort of indication that, like when we think about the tariffs that have been implemented or proposed that affect, when we think of soybeans, we think of China, right? And we think of foreign countries who we export those crops to. When we think about the landscape in that way, is there a way to think about how here we sit in 2026, that things maybe ought to change in that capacity?
Pittman: Man, that’s a great question. So part of my answer may be pretty boring, but I’m looking at it personally. It’s a pretty deep question overall. It’s like, who are we in the year 2026 in the United States? Who are we? Are we the nation that came out of World War II that sought to rebuild our enemies, that wanted to be a global mobile presence, that we cherished allies and friendships and we had real adversaries that we challenged? Are we the country that wants to have these export markets? I think, I mean, there’s a real question here.
And I’ve been in this thing we call agricultural law for a quarter century. And during that time, huge emphasis has been all about expanding international trade. And that the very question you’re asking about commodity-based agriculture, that it’s just a supply demand curve and we have to increase demand to meet the supply. Our technology, we’re doing such a great job. Like think back to 2012 when we had this very, very, very, very significant drought. But in places like you’re talking about, we still have one of the largest corn crops in history. So it’s something that 20 years earlier would have been the exact opposite outcome. So there’s a lot to be really proud of. And like, what a remarkable accomplishment.
But when we say tariffs, we’re also saying uncertainty. And when we say these different, like realignment, reengagement of trade line supply routes with traditional allies, think of USMCA right now and where we’re at. Our two largest trading partners, one right to the north and one right to the south. And agriculture benefited tremendously from that. All these things have pros and cons, but in general, agriculture really benefited.
And I’m raising that because in my learning, so much of that in earnest began under President Ronald Reagan. It was continued under George Herbert Walker Bush. It was consummated, not begun, when Bill Clinton was in the White House and with the Republican Congress. It had a bipartisan feel to it. George W. Bush. President Obama pursued Trans-Pacific Partnership. And in the last decade, we’ve gone in a real abrupt, different direction. We’ve decided we’re not going to enter into these larger multinational trade agreements, like equivalent of NAFTA, where the legislatures in these various countries ratify them and with a sense of permanency. That’s not our current posture.
And so I really think, that’s a long-winded answer, I know that is. I don’t want you to think I’m just talking the talk. I think that is a huge part of the analysis to answer your question. Do we want these things? Is this current posture temporary? Is it a bug or is it a feature? And I don’t know the answer to that yet. And that would answer the question for me. Because if you’re going to say, no, we’re not really going to worry about these international markets anymore and we’re okay with this lack of certainty, then you have to start looking at other things like domestic, which we are. We’re talking about E85 and E15 and is it an all-the-above or is this domestic? Is this supposed to replace these international markets?
I think those are just, to me, that’s a real fundamental question. Like, who are we? Like, what do we want? Are we more of a protectionist? We’ve gone through these phases in our country’s history. Are we more like insular? Or are we a country that says, well, you know what? Life is pretty great in the ZIP code called the United States, but 96% or so, 97% of the world’s consumers live in a place called something other than the United States. So how do we function in this?
So you think about the United States. Its future was very much in doubt in the 1920s and ’30s. Like, did this form of government even work? And it’s no accident that when Franklin Roosevelt was elected president in the 1930s, the New Deal, the very first thing was agriculture, which is now our farm bill, that we haven’t been able to pass one since 2018, a new one. We’ve been able to extend, to do some other things. But that’s where it all started. And so much of our country, our history is intertwined. Like the government, the economy as we know it today, really born out of the ’30s. And for ag, so much of it came out of the post-World War II era.
And I feel like we’re kind of requestioning the very things that, like, they seem very esoteric. But we transitioned from the General Agreement on Tariffs and Trade from the end of World War II up through Jan. 1, 1995, where formally the World Trade Organization was created. And I guess I would sum all that up to say in 2026, and I’m relating this specifically to the ag industry, do we want the things that we said we wanted in the past? Do we still want them? And if so, we have to answer that.
But I think that speaks directly to the heart of your question about the structure of ag and commodity. Because if you’re going to do commodity production, it’s got to come out in large bulk. It’s got to be processed. Got to go to the choke points. It’s got to be distributed somewhere, domestically and internationally. And so the more there’s uncertainty, the more there’s these input costs that are just so damaging and so difficult to navigate on the ground, the harder it’s going to be to stay in that business.
Moore: We’ve talked a lot about the 1980s farm crisis. Are we in another farm crisis?
Pittman: Did Ronald Reagan once say, like, if your neighbor’s unemployed, it’s a recession. If you’re unemployed, it’s a depression. I think something like that. So I think if you’re an operator and you’re feeling this and you’re going through bankruptcy, or you’ve even had to tap out, it feels like a crisis.
And the thing that I think is really mitigating the pain is that in general, land values have held up. So there’s that equity. If that part of the equation were to change in a negative way, then I think it’d be a lot more abrupt that people would use that word, crisis.
I mean, agriculture is a business. As much as we want to talk about it in bucolic terms, it’s a business and you can’t be in business unless you are making money. That is how it works. And so for all the chatter, take all the bells and whistles away and you’ve got to be able to make money. And in farming, particularly row crop, that usually means, like, just take any 10-year period, you’re probably going to lose money two, three years, you may break even four or five and you need to make money two or three of those. And so when you have these years in a row where you’re just losing and your future of it, you’re trying to figure out some level of certainty.
I’ll be fascinated to see when we come out of this. We’re gonna have a midterm election. We’re going to have something new, whatever it looks like, whoever’s in majority, minority. But it’s going to be new people. It’s going to be the last two years of the Trump administration. The political context will change. We vote on Nov. 3. We probably start seeing people run for president more or less on Nov. 4. Like the whole thing starts to feel different.
And we’ve got some big-ticket items coming up. We have government funding that runs through Dec. 11. We’ve got potentially a farm bill. We now have House and Senate activity. We have an ability to hopefully get to conference and particularly if power changes in one chamber. At some level, it will, whether the majority changes or not, but there’ll be new people.
So things like, it seems very esoteric to all of this, but USDA reorganization. There’s been a recent federal court decision that put that on hold through Dec. 11. Does that become something that is negotiated in a broader package in the lame duck session? So there’s a lot riding for ag. And if we don’t get a new farm bill in the lame duck, then that means you start over in a new Congress after they get sworn in. And now depending on the composition, that may be pro forma. It may be just start with what we had already. But it also may be we want to revisit some key provisions.
There’s still a lot of uncertainty just in our democratic process that affects agriculture, aside from these other questions and tariffs, war in Iran, the ongoing conflict between Russia and the Ukraine. These are all things that impact a lot, including ag, that at some point are going to have to get resolved.
Harrison Pittman is the director of the National Agricultural Law Center. We spoke over Zoom yesterday.
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