WISCONSIN (WQOW) - Farms in the Western District of Wisconsin lead the nation in 2020 bankruptcies.
The ranking, that comes from federal court data, is one that doesn't surprise agriculture officials, but does point toward a growing problem in our state.
In the Western District, there were 39 new Chapter 12 filings in 2020, with nearly half of them occurring here in the Chippewa Valley. 18 of these Chapter 12 filings, which is specifically for farms, occurred in seven area counties: Dunn, Clark, Pierce, Trempealeau, Rusk, Barron, and Eau Claire County. Dunn, with four filings, sits at the top of this list and Eau Claire at the bottom with one.
Overproduction, commodity prices, and a global pandemic: all came together to create the perfect storm for farmers.
"2020 was a rollercoaster for farms," said Katie Wantoch, the agricultural agent for UW Extension in Dunn County. "We look at the downturn of the impact on agriculture from March through May: the lack of schools buying milk, and the different commodities, and we saw the downturn. And then the federal government, as well as the state of Wisconsin, came through to provide us some government program payments to the farmers. And so you saw that bit of increase through the second half of 2020."
But even without COVID-19, this situation is all too familiar for Wisconsin farmers.
"What we've been doing for the 30 plus years that I've been in agriculture, is we produce as much as we can and as cheap as we can, then dump it into the market and hope for the best," said Ed Gorell, representing District 3 in the Wisconsin Farmers Union. "If it doesn't work out that way, then the taxpayers step in with subsidy payments, and then the subsidy payments just go into the fuel of overproduction again in the next round, and the cycle has been continuing."
Both Wantoch and Gorell agree this situation is only going to improve if changes are made in market regulation, export agreements, and supply chain stability.
"Everything has improved in agricultural production but yet there's been no mechanism to control the supply," Gorell said.
While a fluctuating agriculture industry is leaving small family farms struggling, they're not without options.
"Chapter 12 really allows farmers to reorganize their debt," Wantoch said. "They file for bankruptcy, they propose a plan and have the ability to reorganize their debt over three to five years to show how they maybe can come back and continue farming."
But even so, Wantoch said the stress of this industry is already leaving its mark.
"The Wisconsin Farm Center is seeing an increase in calls about farm stress and an increase in vouchers for counseling," Wantoch said. "So there's definitely some correlation between the stress that's out there for farmers and then farm finances."
This new ranking only furthers an unfortunate trend. The Western District of Wisconsin also led the nation in farm bankruptcies in 2017, 2018, and 2019. Both Wantoch and Gorell note this ranking is also likely due to Wisconsin having the highest number of small family farms, so the ratio of bankruptcies is bound to be a bit higher.