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More U.S. farmers are filing for bankruptcy, as federal payments projected to reach record levels this year fall short of compensating for the coronavirus pandemic and a yearslong slump in the agricultural economy, the Wall Street Journal reported. About 580 farmers filed for chapter 12 bankruptcy protection in the 12-month period ended June 30, according to federal data. That was 8 percent more than a year earlier, though bankruptcies slowed slightly in the first half of 2020 partly because of an infusion of federal aid and hurdles to filing during the pandemic, according to agricultural economists and attorneys. The pandemic has pressured prices for many commodities, squeezing farmers who raise crops and livestock, and prolonging a six-year downturn in the Farm Belt. The Trump administration is expected to dole out a record $33 billion in payments to farmers this year, according to the University of Missouri’s Food and Agricultural Policy Research Institute. The funds, including those intended to help farmers hurt by trade conflicts and the coronavirus, would push government payments to 36 percent of farm income, the highest share in nearly two decades, the institute said. “Agricultural markets have been horrible, and the pandemic exacerbated it, big time,” said Paul Swanson, an Oshkosh, Wis.-based attorney. He said he has 40 open farm-bankruptcy cases, about a third more than last year. Before the pandemic, a global grain glut and foreign competition had pushed down agricultural prices. Trade disputes deepened the pain, drawing retaliatory tariffs from top buyers of U.S. farm commodities, such as China and Mexico. Then the coronavirus hit, upending the U.S. food-supply chain. As restaurants closed, farmers plowed under thousands of acres of vegetables and dumped milk into manure lagoons. Corn prices plummeted as Americans stopped driving, cutting demand for ethanol, a corn-based biofuel blended into gasoline. Prices for slaughter-ready cattle and hogs dropped as meatpacking plants that became virus hot spots slowed or halted production. Hog farmers have lost nearly $5 billion in actual and potential profits for 2020, according to the National Pork Producers Council, a trade group. In California, agricultural businesses stand to lose as much as $8.6 billion, according to a study commissioned by the California Farm Bureau Federation.

A surge in coronavirus cases in one of the country’s top regions for apples and sweet cherries is challenging agricultural operations already limited by rules aimed at preventing such outbreaks, underscoring the difficulty of keeping farmworkers safe, the Wall Street Journal reported. Recent emergency regulations issued by Washington state to curb outbreaks of coronavirus among farmworkers living in temporary housing are slowing fieldwork in Yakima Valley, but the virus is still spreading, according to agricultural employers and the Yakima Health District. On farms that produce $1 billion of apples, sweet cherries and other crops each year, employers are hiring fewer guest workers and delaying their arrival. COVID-19 cases have surged in Yakima County. The county is nine times smaller in population than King County, home of Seattle, but it only has 30 percent fewer cases than its neighbor, with 7,349 coronavirus cases as of June 30. Roughly one-fifth of the cases in Yakima are among agricultural workers, according to the Yakima Health District. In April, cases involving agricultural workers appeared in Yakima’s large fruit warehouses, where hundreds of people pack apples and other produce into boxes. Recently, the virus has spread through employer-provided housing, the health district said. Tens of thousands of seasonal workers from elsewhere in the U.S. and countries like Mexico live in dormitory-style housing, converted motels and military-style tents during Washington’s harvest season. The difficulty of keeping workers healthy in Yakima indicates how hard it has become to safeguard agriculture’s workforce, intensifying questions about how best to prevent outbreaks in labor-intensive workplaces. Growing outbreaks among farmworkers nationwide come as most employers are looking to reduce the threat of outbreaks among their workers and the coronavirus continues to sicken workers at U.S. meatpacking plants.

Year-to-year farm bankruptcies increased 23 percent, according to recently released data from U.S. Courts, according to an American Farm Bureau Federation Market Intel report. The data shows a total of 627 filings during the 12-month period ending March 2020, marking five consecutive years of chapter 12 bankruptcy increases, including an accelerated rate since January. Wisconsin was the hardest hit with 78 filings in the 12-month period, followed by Nebraska with 41 chapter 12 filings and Iowa at 37. More than 50 percent of the chapter 12 filings were in the 13-state Midwest region, followed by 19 percent in the Southeast.

Justice Department antitrust authorities cleared the way for Dairy Farmers of America Inc. to buy the bulk of Dean Foods Co.’s milk plants out of bankruptcy, uniting the nation’s largest dairy cooperative by membership with the biggest milk processor, the Wall Street Journal reported. The Justice Department said on Friday that it would approve DFA’s $433 million purchase offer, subject to certain conditions, against the backdrop of “unprecedented challenges in the dairy industry” and Dean’s potential liquidation in the event the proposed deal fell through. “The department conducted a fast but comprehensive investigation, and our actions today preserve competition for fluid milk processing,” Assistant Attorney General Makan Delrahim said. As a condition of the deal, the Justice Department required the divestiture of three Dean plants in Illinois, Wisconsin and Massachusetts to remedy potential competitive harm. Dean filed for bankruptcy in November and was followed into chapter 11 in January by another large fluid-milk processor, Borden Dairy Co., as falling milk consumption puts intensifying pressure on the highly regulated industry. Dean, the top U.S. milk processor by sales, had struggled for years with slumping demand as consumers gravitated to other beverages, including milk alternatives made from soy and oats.

Borden Dairy Co. and Dean Foods Co. bondholders want to merge the two bankrupt dairy companies, proposing an alternative to Dean’s pending merger with a major U.S. dairy cooperative, WSJ Pro Bankruptcy reported. Dean, the top U.S. milk processor by sales, is racing to ease antitrust concerns around its proposed tie-up with cooperative Dairy Farmers of America Inc. and to close their $433 million merger. The Wall Street Journal reported Monday that Justice Department antitrust officials were nearing a settlement with DFA that would let the acquisition move forward. The Borden bid, put forth in Dean’s court-supervised bankruptcy on Thursday, is positioned as an alternative transaction in the event the DFA deal is rejected. DFA won court approval earlier this month to buy the bulk of Dean’s assets out of bankruptcy, subject to clearance from the Justice Department. Antitrust authorities have been examining for months the potential effect of the combination on the price of milk and on competition in the dairy industry. In court papers filed in the U.S. Bankruptcy Court in Houston, Borden said its proposed merger with Dean would “avoid the antitrust concerns” surrounding the DFA merger.

Wisconsin farm bankruptcies are on the rise as the effect of coronavirus on the economy pushes already weakened businesses over the edge, the Milwaukee Journal Sentinel reported. Since Jan. 1, court records show, 36 farmers have filed for chapter 12. By comparison, there were 57 chapter 12 filings in Wisconsin in all of 2019. In the last few years, thousands of dairy farmers have lost money as they've milked cows in an oversupplied market that's depressed prices. Lately, the industry has been devastated by coronavirus shutdowns. About one-third of the state’s dairy products, mostly cheese, is sold in the food-service trade that's seen sales nosedive from the shutdown of restaurants, schools, sporting events, festivals and other markets for dairy products. And it's not just dairy feeling the pain. Corn producers have experienced it through the closure of ethanol plants as demand for the fuel additive has dried up with less consumption of gasoline. Livestock farmers have felt it through trade wars and coronavirus disruptions of export markets. Last fall, Congress more than doubled the allowed debt cap for a chapter 12 filing to make more farmers eligible. Legislators said the higher cap, now set at $10 million, reflects increased land values and bigger farms. "One of the reasons we may see an uptick in chapter 12 filings is it's sometimes easier to get financing approved when a farm is in bankruptcy than when it's not. Outside of bankruptcy, there's usually a lien there, sometimes more than one. In bankruptcy, you can get a court order saying that the crop lender is in first place," said bankruptcy attorney David Krekeler.

Smithfield Foods, the world’s biggest pork processor, said yesterday that it will shut a U.S. plant indefinitely due to a rash of coronavirus cases among employees and warned the country was moving “perilously close to the edge” in supplies for grocers, Reuters reported. Slaughterhouse shutdowns are disrupting the U.S. food supply chain, crimping availability of meat at retail stores and leaving farmers without outlets for their livestock. Smithfield extended the closure of its Sioux Falls, South Dakota, plant after initially saying it would idle temporarily for cleaning. The facility is one of the nation’s largest pork processing facilities, representing 4 percent to 5 percent of U.S. pork production, according to the company. South Dakota Governor Kristi Noem said on Saturday that 238 Smithfield employees had active cases of the new coronavirus, accounting for 55 percent of the state’s total. Noem and the mayor of Sioux Falls had recommended the company shut the plant, which has about 3,700 workers, for at least two weeks.