Many farms have been struggling with profitability for years. The U.S. Department of Agriculture's (USDA) predictions of profit have been overly optimistic to say the least. When the price is falling on key farming staples such as milk and hogs, farms often have no choice but to look at their bankruptcy options so that they have some relief from their debt.
Chapter 12 bankruptcy is a type of bankruptcy that has been especially created for farms, and has rules that will benefit the exact problems that the farming industry faces. It will help you reorganize the components of your farming business so that you can create a more efficient income, using a portion of the profits to pay off your existing debts.
A great supplement to filing for Chapter 12 bankruptcy could be through the diversification of your business. You may have ideas that you believe could be more relevant and profitable for today's market.
Ways to diversify your farming business
Diversification is the act of creating new products that appeal to a different market or need. This means that a business can potentially produce a greater output and therefore generate a higher profit. There are many ways that you could diversify your farming business, from adding a herb production plant, to extending the growing season, to even creating vegetarian cheese to appeal to the vastly growing vegan market. The possibilities are endless.
If you are attempting to create a more profitable farming business and to get a fresh start from your debts, it is important to consider all options that might help you achieve this.
Source: Agribank, "Farm Diversification," accessed Nov. 30, 2017