Farmer Jim Maxwell has weathered more than a few rough patches in his long agricultural career. As an advisor, he’s now helping farmers and lenders navigate through what some are calling a perfect storm of financial trouble.

Low commodity prices, declining land values, and a tightening credit market have all contributed to increased anxiety for San Joaquin Valley farmers, especially almond growers.

In 2024, there were 216 farm bankruptcies nationwide, an increase of 55% from the previous year. Of that number, California had the most with 17 farms falling into bankruptcy.

Local bankruptcy attorneys and farming experts said they are fielding multiple calls from growers trying to fend off bankruptcy.

“I spend a significant portion of my work day talking to banks and farmers to try and help them get through these challenging times,” said Maxwell, owner of Agriland, a farm management company in Madera. “And it is not over yet.”

Hardest hit in the San Joaquin Valley are almond farmers, whose lenders have grown increasingly anxious over a growers ability to pay their debts.

What is causing farmers to file for bankruptcy?

Several Fresno bankruptcy attorneys said the problem began when the price for almonds began dropping. Over the years, almond prices have gone down from a high of $4 a pound in 2014 to about $2 a pound currently.

And while the price continues to inch upward due to tight supplies, it can’t go up fast enough to cover the higher interest rates and other farming increases such as labor.

Fresno bankruptcy attorney Peter Fear said he has farmer clients who used to pay 3-4 percent interest on their loans who are now paying 8 percent and 9 percent.

“When that happens it sucks all the profit from your farm and makes you non profitable,” Fear said. “And with low prices for almonds, people had to pull out all the stops to try and keep going for two or three years.”

This year, Fear has represented two farmers in bankruptcy court. He expects more.

“For every case you file, you end up talking to at least six or seven other farmers who are struggling,” Fear said. “It is not a good situation.”

Although still one of the largest crops grown in California at 1.3 million acres, the almond industry has seen several major players either file for bankruptcy or be sued for defaulting on their loans.

One of the biggest to fall was Bay Area businessman John Vidovich, who farms in several San Joaquin Valley counties. He was sued by a lender for allegedly defaulting on $105 million in loans.

Also taking a financial tumble was Trinitas Advantaged Agricultural Partners and Trinitas Farming LLC that filed for Chapter 11 bankruptcy on Feb. 19 after amassing $188 million of debt.

The Oakdale-based Trinitas Farming developed and operated 17 separate almond ranches on 8,680 acres in Fresno, Tulare, San Joaquin, Contra Costa and Solano counties.

The company folded before it could harvest its first crop.

It isn’t just major players folding.

Shawn Gill who farms almonds in Fresno, Madera, Sutter, Glenn and Placer counties, owes more than $7 million to lenders. He filed a Chapter 12 bankruptcy that allows him to reorganize his debts while continuing to operate his farm.

According to court filings, Gill operates Capital Farms Inc., and was sued by one of his lenders for being in default on his loans.

Also complicating matters was the loss of several major growers due to bankruptcy. Thousands of acres of farmland have slowly become available, causing the price per acre to drop.

On the westside of Fresno and Madera counties an acre of almonds sold for $22,000 in 2022. That number dropped to a high of $12,000 in 2023.

The decline on the east side of the Valley was less significant. In 2022, an acre of almonds was $48,000 while it dropped to $42,000 an acre in 2023.

The decline in land value led to another problem for farmers, a loss of collateral to back up their loans.

“With the loss of those large farming entities you have a flood of land on the market and it depressed the land values and so now you no longer have the collateral you need,” said Hagop Bedoyan, a bankruptcy attorney in Fresno. “Lenders like to see more of an equity cushion.”

Bedoyan added that lenders not only want farmers to have more equity but they are also requiring farmers to have two sources of water, surface and well water.

Riley Walter, a Fresno bankruptcy attorney who has handled many large clients, said part of the current problem was caused by the rush to plant almonds, a crop that found a lucrative home overseas.

“Many farmers went all in and planted almonds, but when the almond prices dropped they got really hammered,” Walter said in an email.

Walter added that farmers who grow almonds and grapes are experiencing a double-whammy.

California grape growers are struggling with declining consumer demand, an oversupply and competition from foreign bulk wine producers.

“We all need to remember that there’s been about 15 years of very good profitability for most farmers,” Walter said “And during that time, both borrowers and lenders have become a little lax. We also need to remember the 80/20 rule — 80% of the farmers are not leveraged and 20% are.”