Farm bankruptcies in Virginia remained low in 2021

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Farm bankruptcies in Virginia continue to be low as national trends show a dramatic decline in all regions of the United States between 2020 and 2021.

The conclusion of the American Farm Bureau Federation, which was published in a market information package earlier this month, is based on records of Chapter 12 filings with federal bankruptcy court.

Chapter 12 bankruptcies are specifically designed for “family farmers” and “family fishers” and cannot be submitted by persons or companies that do not meet these definitions.

According to federal bankruptcy court data, five Virginia farms filed for Chapter 12 bankruptcy in 2021, the same number as in 2020.

A Virginia Mercury review of Chapter 12 bankruptcy filings over the past decade shows that farm bankruptcies in Virginia have been largely low over that time, peaking between 2015 and 2017. The highest number of farm bankruptcies was registered in 2016, when 13 operations underwent the process. .

A total of 61 Chapter 12 bankruptcies have been filed in Virginia since 2012.

Carroll County, on the Virginia-North Carolina border, saw more farm bankruptcies than any other county during this time, with at least seven Chapter 12 filings. (Data for 2012 only records (only one bankruptcy but does not list the county where it occurred.) Other top counties for Chapter 12 filings include Russell, with five, and Fauquier and Shenandoah, each with four.

While “the fact that the numbers have gone down is a positive indication,” just looking at the numbers for Chapter 12 bankruptcies could potentially underestimate the number of farm bankruptcies actually occurring in Virginia, Tony Banks said, senior assistant director of the Virginia Farm Bureau Federation. .

“There are a large number of very small farms in Virginia that are part-time businesses for the owners, and as such may or may not qualify for Chapter 12 bankruptcy protection,” he said. he declares. “Chapter 12 is probably a good indicator, but that’s not all.”

Michael Wallace, spokesman for the Virginia Department of Agriculture and Consumer Services, said the state agency does not track farm bankruptcy data.

Banks said he wasn’t sure what was behind the 2015-17 spike in Virginia, but it could be linked to dairy farm closureswhich in 2018 amounted to more than one a week in the Commonwealth.

“During this period, dairy prices were extremely low relative to operating costs, and a number of dairy farms exited the business,” he said.

While farm bankruptcies in Virginia appear to be at a low and stable level, the Mid-Atlantic region — of which Virginia is a part — has seen Chapter 12 filings decline by 8% between 2020 and 2021.

Other regions have seen much larger declines, according to analysis by the American Farm Bureau Federation, with farm bankruptcies in the Northeast dropping 82% and those in the Pacific Northwest 81%.

In total, the market report found that “Chapter 12 bankruptcy filings have declined by 50% in 2021.”

“The number of Chapter 12 filings in 2021 is the lowest in a decade and the first time in at least 10 years that there are fewer than 300 filings,” the author wrote.



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