Arkansas Farmers File 32 Chapter 12 Bankruptcies in 2026

Arkansas leads the nation in farm bankruptcies this year.

Thirty-two agricultural operations in the state have filed for Chapter 12 bankruptcy protection since January 2026. That total is more than double the 33 filings recorded in all of 2025. The state’s total also surpasses the six filings reported in Iowa, the next highest state, during the third quarter alone.

These legal filings track a sharp decline in farm income. Crop cash receipts, which typically generate about $20 billion for the state economy, fell 17.4% compared to the previous year. The drop was not uniform across all commodities. Soybean receipts declined by 29.8%, cotton lint receipts fell 40.6%, and corn receipts dropped 17.3%. Rice cash receipts moved in the opposite direction, rising 6.5%. Receipts from animals and animal products increased 1.2%, masking some of the pain in the crop sector.

Frank Seo, an assistant professor of rural development at the University of Arkansas Division of Agriculture, noted the divergence in the data. "That overall number masks very different conditions within agriculture," Seo said. He co-authored the state’s agricultural profile that contains these figures.

Several economic factors contributed to the financial strain. Input costs rose as fertilizer prices spiked following the conflict in Ukraine. Diesel prices also climbed due to the Iran conflict, raising fuel costs for farm equipment. Trade wars and tariffs closed export markets, while weather events including floods and droughts damaged production. Poultry farmers additionally faced litigation and disease risks, while cattle producers dealt with drought and trade challenges.

The national trend mirrors the state-level decline. Federal court data cited in the University of Arkansas report shows 292 Chapter 12 cases filed nationwide in 2026. This is nearly 19% higher than the 246 filed in the first three quarters of 2025. Ninety-one of those national filings occurred in the third quarter. An additional 201 farm-related bankruptcies were filed under Chapter 11, a broader bankruptcy category.

Harrison Pittman, director of the National Agricultural Law Center, pointed to the concentration of filings in the South. "That number is twice the six filings reported in Iowa, the next-highest state," Pittman said. He noted that the 32 Arkansas filings highlight the financial challenges facing the sector.

Estimates suggest nearly 25% of farms in Arkansas have closed in the last 18 months. The state’s community banks, which support local farm economies, face mounting pressure. Congress has not passed new agricultural support legislation during the summer and fall sessions. The next growing season will determine if the trend reverses or continues.