(CBS MONEYWATCH) – U.S. farms endured a spike in bankruptcies last year, climbing 20% even with financial help from Washington, D.C.
American farmers have struggled amid U.S. trade talks with both Mexico and China, with soybean exports especially hit hard by retaliatory tariffs by China first imposed in 2018. The hurt in the nation’s heartland prompted the White House to set aside $28 billion over the past two years for farmers caught in the crossfire of President Donald Trump’s trade war.
Still, despite the billions in farm aid, 595 family farms declared bankruptcy in 2019, up nearly 100 filings from the previous year and the highest count since 2011, according to data from the American Farm Bureau.
Last year’s 20% spike lags only the 33% surge seen in 2010, the year after the recession, the bureau found in its search of a decade of bankruptcy data from U.S. courts.
The most recent rise in farm bankruptcies was to be expected, the bureau said in its findings, citing factors including a multi-year downturn in the farm economy, record amounts of farm debt, and headwinds on the trade front.
Farms in Wisconsin generated the highest number of bankruptcy filings last year — 57— followed by Georgia with 41, the bureau reported. Farm bankruptcies were at or above decade-high levels in 10 states: Iowa, Illinois, Kansas, Minnesota, Nebraska, New Hampshire, Ohio, South Carolina, South Dakota and Wisconsin.
The White House’s latest “Phase One” accord with Beijing stipulates that China will purchase up to $200 billion in U.S. goods, including an estimated $30 billion to $40 billion in agricultural products like soybeans and pork, offering some relief to American farmers. The administration said the U.S. will keep billions in tariffs on Chinese products as a bargaining chip, as it looks to strike more deals in future trade talks.
Mr. Trump on Wednesday inked the United States-Mexico-Canada Agreement, which binds the trading partners together for at least 16 years. Canada and Mexico are the two top export markets for U.S. food and agricultural products, totaling almost $40 billion last year, and the agreement preserves that. It also gives American farmers greater access to Canada’s dairy markets, long a source of tension between the two countries.
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