Soybean Farmers Face Mounting Financial Distress
- Robert J. Gonzales
- Sep 14
- 3 min read
Part 1: Low prices, rising costs, and lost China demand are creating severe financial pressure for Soybean farmers in Tennessee, Mississippi, and Arkansas.
by Robert J. Gonzales, Business Restructuring Attorney at EmergeLaw, PLC
Based in Nashville, Robert represents financially distressed businesses and family enterprises across Tennessee and the Mississippi River corridor, with deep ties to the farming communities of Tennessee, Mississippi and Arkansas.
Editor’s Note: This is Part 1 of a two-part series from EmergeLaw examining the financial pressures affecting U.S. Soybean farmers. This article focuses on the challenges driving financial distress, including how they are impacting major producers in Tennessee, Mississippi, and Arkansas. Part 2 will address legal strategies to help farms, land owners and ag-related businesses respond.
The Squeeze on Soybean Farmers
Soybean producers across the Mississippi River corridor, including major production regions in Tennessee, Mississippi, and Arkansas, are under mounting financial strain. Local cash prices have weakened, input costs remain elevated compared to historical norms, and export markets are less reliable than in past years.
Many other crops are also facing pressure, but soybean farmers are among the producers feeling the sharpest squeeze because of their heavy reliance on export demand, barge transportation, and global pricing dynamics.
Vanishing Demand from China and Global Market Shifts
A central factor is the sharp drop in demand from China, historically the largest buyer of U.S. soybeans. Retaliatory tariffs and trade tensions have cut Chinese purchases, and buyers have shifted to Brazil, which offers lower prices and has expanded production capacity.
This has created persistent headwinds for U.S. exports. Farmers in Mississippi and Arkansas, who rely heavily on barge shipments through the Mississippi River system, are seeing local basis collapse as export volumes decline. Even those who still find buyers are earning less for every bushel delivered.
Depressed Prices and Thin-to-Negative Margins
Soybean futures have softened from prior highs and remain volatile. Local cash prices have dropped in many areas while production costs remain high.
In Tennessee, where farmland values and financing costs are significant, producers are under intense pressure to maintain output even when margins are razor thin. This can push farms into chasing volume to service debt rather than focusing on profitability.
Rising Input Costs and Supply Chain Stress
Fertilizer and crop protection products often originate overseas and have been affected by tariffs and shipping disruptions. Diesel prices remain volatile, and equipment and maintenance costs have not returned to pre-pandemic norms.
Smaller farms, which are common in parts of Mississippi and Arkansas, have less leverage to negotiate favorable supply terms. Some are stretching trade credit or delaying purchases, which can be early signs of cash flow stress.
Transportation Bottlenecks and Basis Collapse on the Mississippi River
Farmers across the region depend on the Mississippi River system to move grain to export terminals. Recent periods of low river levels have reduced barge capacity, raised freight costs, and created delivery delays.
As transportation becomes more expensive and less reliable, local buyers are cutting the prices they are willing to pay. The result is a steep drop in basis — the gap between local cash prices and futures prices — which has eroded farm revenue across the river corridor.
Policy Uncertainty and Farm Bill Anxiety
Farmers are also contending with policy uncertainty. The current Farm Bill programs have been slow to adapt to rapidly changing conditions, leaving many producers unsure what support will be available going forward.
Without clarity about future support or crop insurance protections, lenders and farmers alike are hesitant to invest, expand, or refinance, which compounds financial stress.
Mounting Financial Distress on Soybean Farmers
The convergence of softer prices, elevated costs, lost export demand, and transportation bottlenecks has left many soybean operations under serious pressure.
Some producers are deferring equipment purchases, cutting back on maintenance, or relying on short-term operating credit to stay current. These moves can keep farms afloat temporarily but often signal deepening financial risk.
What Comes Next for Distressed Soybean Producers
These challenges are affecting soybean producers nationwide, but they are especially visible in export-dependent regions like Tennessee, Mississippi, and Arkansas.
In Part 2 of this series, EmergeLaw will outline the legal and financial tools available to help soybean farmers and ag-related businesses respond effectively to financial distress, including proactive contract management, lender negotiations, business restructuring, and relief under Chapter 12 or Subchapter V when necessary to avoid catastrophe.
Robert Gonzales is a business restructuring attorney and partner with EmergeLaw, PLC, a boutique law firm in Nashville that focuses on helping small and mid-sized businesses navigate financial distress. Robert advises farmers, land owners, and agribusinesses on loan workouts, contract risk management, and Chapter 12 and Subchapter V reorganizations. He is recognized for guiding companies through complex financial challenges with clarity, compassion, and calm precision.