U.S. Farming Under Pressure As Bankruptcies Surge
- Bankruptcies rise due to 2 years of low crop profit margins, not fertilizer costs.
- Crop prices struggle to cover production costs, even before recent geopolitical tensions.
- Soybean market faces challenges as China seeks new suppliers, but U.S. can stay competitive.
U.S. Farming Under Pressure As Bankruptcies Surge
Tony Katz explores the intricacies of crop production and the challenges facing the agricultural industry. Joining Tony is Michael Langemeier, director of the Center for Commercial Agriculture at Purdue University, who sheds light on the current state of farming and the future of soybeans.
The conversation begins with a discussion about the recent increase in farm bankruptcies, with 315 Chapter 12 filings in 2025, up from 216 in 2024. Michael explains that this rise is not directly related to fertilizer costs, but rather the fact that the industry has experienced low margins for two consecutive years, with 2026 expected to be another low-margin year. “The increase in bankruptcies is not directly related to fertilizer cost,” Michael says. “What it is directly related to is the fact that we’ve had relatively low margins in crop agriculture for two years now, 2024 to 2025, and we’re heading into 2026.”
Michael also delves into the concept of margins and markups, explaining that in agriculture, the focus is on the difference between crop price and break-even price. “We don’t really talk about markups,” he says. “We talk about the difference between the crop price and the break-even price. It’s a similar idea, but that’s kind of the lingo that we use.” He notes that even before the Iran conflict, the industry was facing a significant gap between corn price and break-even price, with corn price around $4.25 per bushel and break-even price closer to $5.
The conversation also touches on the soybean market, which is heavily reliant on China. Michael notes that China has been aggressive in seeking alternative suppliers, including South America, and that this has led to a decrease in soybean purchases from the US. However, he believes that the soybean market has a future, and that the US can remain competitive by staying ahead of Brazil’s increasing soybean production. “The way around that is just to try to stay as competitive as you possibly can,” Michael advises.
Throughout the interview, Michael provides valuable insights into the complexities of crop production and the challenges facing the agricultural industry. He emphasizes the importance of staying competitive, adapting to changing market conditions, and being aware of the factors that influence crop prices. If you’re interested in understanding the intricacies of farming and the future of soybeans, this episode is a must-listen. Tune in to hear Michael Langemeier’s expert analysis and gain a deeper understanding of the issues affecting the agricultural industry.
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