Live Webinar July 21 Offers Update on Farm Program

July 21st, 2014

Contributed by Steven D. JohnsonFarm Management Specialist, Iowa State University Extension and Outreach, sdjohns@iastate.edu, 515-957-5790

GFPIowa State University Extension and Outreach and USDA Farm Service Agency (FSA) are conducting a live update webinar on the farm program called Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC). The webinar titled “ARC PLC Decisions: Update, Election and Enrollment” is scheduled for July 21 at 7 p.m. Participants will get an update on the new farm program, including the opportunity to update base acres and farm yields, then to elect and enroll a farm in one of the new farm programs – Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC).Farmers, along with their landowners on rented ground, can make a one-time, unanimous and irrevocable election by FSA farm number for the life of the five-year farm program. The party at risk will then enroll annually in the ARC county, ARC individual farm, or the PLC program. If the farm is not enrolled in ARC or PLC for 2014, then it automatically defaults and can only be enrolled in the PLC beginning in 2015.

Speakers include ISU Extension and Outreach Economist Chad Hart and USDA FSA Chief Program Specialist Kevin McClure. The webinar will last approximately one hour.

To attend, log onto https://connect.extension.iastate.edu/anr. The webinar will be recorded for viewing at a later time from the Ag Decision Maker Farm Bill webpage.

Contact the Polk County Extension office at (515) 957-5760 with any questions.

Additional Contact:

Kevin McClure, Chief Program Specialist, Iowa State FSA Office, 515-254-1540 Ext. 1041, Kevin.McClure@ia.usda.gov

 

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Government Programs, Meetings and Events

Ag Decision Maker website updates for July 2014

July 15th, 2014

Remember to report acres to FSA by July 15, 2014

July 1st, 2014
Contacts:
John R Whitaker
PH 515-331-8480
2014 Farm Bill Program Eligibility Requires Acreage Certification with USDA’s Farm Service Agency

(Des Moines, Iowa) June 10, 2014 – USDA Iowa Farm Service Agency (FSA) Executive Director, John Whitaker reminds farmers that planted acres must be reported to FSA by July 15, 2014. The Agricultural Act of 2014 (Farm Bill) requires accurate and timely filed acreage reports for all crops and land uses, including prevented and failed acreage as well as Conservation Reserve Program (CRP) acres.

“Historically acreage certification has been a requirement to be eligible for USDA programs and although some federal farm program sign-ups have not yet started, timely acreage reports submitted to your local FSA office will be important to ensuring program eligibility,” said Whitaker.

Acreage reports are considered timely filed when completed by the applicable final crop reporting deadline, which may vary from state to state. Prevented acreage must be reported within 15 calendar days after the final planting date. Failed acreage must be reported before the disposition of the crop. Producers should contact their county FSA office if they are uncertain about reporting deadlines.

Producers should visit their county FSA office to complete acreage reporting. For questions on this or any FSA program, including specific crop reporting deadlines and planting dates, producers should contact their county FSA office. More information on FSA programs can be found at: www.fsa.usda.gov. Local FSA office contact information can be found at: http://offices.sc.egov.usda.gov/locator/app

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A Very Quiet Report

June 11th, 2014

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

A Very Quiet Report (6/11/14)

97hartsmUSDA released its June update for crop supplies and demand and the updates were few and far between. For corn, there were no changes to the supply and demand estimates for the 2014 crop. Yield is projected at 165.3 bushels per acre.  Production is projected at a record 13.935 billion bushels, 10 million bushels above last year’s record crop. Total use is set at 13.385 billion bushels, down 250 million bushels from last year. 2014/15 ending stocks are set at 1.726 billion bushels, up 580 million bushels from the previous year. And the midpoint of the season-average price range remains at $4.20 per bushel.

For soybeans, there was one adjustment, but it was for the 2013 crop. 2013 domestic crush was increased 5 million bushels. Otherwise, as with corn, the projections remain the same. Yield is projected at 45.2 bushels per acre. Production is projected at a record 3.635 billion bushels. Total use is set at 3.45 billion bushels. 2014/15 ending stocks are set 325 million bushels, up 200 million from the previous year. And the midpoint of the season-average price range is $10.75 per bushel.

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Crop Outlook, Crops

USDA Announces Programs to Conserve Sensitive Land and Help Beginning Farmers

June 6th, 2014

Contacts:

Office of Communications
(202) 720-4623
USDA Announces Programs to Conserve Sensitive Land and Help Beginning Farmers

Programs that Allow Producers to Protect Land and Help New, Minority and Veteran Farmers Get their Start in Agriculture

WASHINGTON, June 4, 2014 – Agriculture Secretary Tom Vilsack today announced that farmers, ranchers and landowners committed to protecting and conserving environmentally sensitive land may sign up for the Conservation Reserve Program (CRP) beginning June 9.The Secretary also announced that retiring farmers enrolled in CRP could receive incentives to transfer a portion of their land to beginning, disadvantaged or veteran farmers through the Transition Incentives Program (TIP).

“CRP is one of the largest voluntary conservation programs in the country,” said Vilsack. “This initiative helps farmers and ranchers lead the nation in preventing soil erosion, improving water quality and restoring wildlife habitat, all of which will make a difference for future generations.”
Vilsack continued, “The average age of farmers and ranchers in the United States is 58 years, and twice as many are 65 or older compared to those 45 or younger. The cost of buying land is one of the biggest barriers to many interested in getting started in agriculture. The Transition Incentives Program is very usefulas we work to help new farmers and ranchers get started.”

The Conservation Reserve Program provides incentives to producers who utilize conservation methods on environmentally-sensitive lands. For example, farmers are monetarily compensated for establishing long-term vegetative species, such as approved grasses or trees (known as “covers”) to control soil erosion, improve water quality, and enhance wildlife habitat.

CRP consists of a “continuous” and “general” sign-up period. Continuous sign up for the voluntary program starts June 9. Under continuous sign-up authority, eligible land can be enrolled in CRP at any time with contracts of up to 10 to 15 years in duration. In lieu of a general sign-up this year, USDA will allow producers with general CRP contracts expiring this September to have the option of a one-year contract extension. USDA will also implement the 2014 Farm Bill’s requirement that producers enrolled through general sign-up for more than five years can exercise the option to opt-out of the program if certain other conditions are met. In addition, the new grassland provisions, which will allow producers to graze their enrolled land, will enable producers to do so with more flexibility.

The Transition Incentives Program provides two additional years of payments for retired farmers and ranchers who transition expiring CRP acres to socially disadvantaged, military veteran, or beginning producers who return the land to sustainable grazing or crop production. Sign up will also begin June 9. TIP funding was increased by more than 30 percent in the 2014 Farm Bill, providing up to $33 million through 2018.

As part of the 2014 Farm Bill, participants meeting specific qualifications may have the opportunity to terminate their CRP contract during fiscal year 2015 if the contract has been in effect for a minimum of five years and if other conditions are also met.

The USDA Farm Service Agency (FSA), which administers CRP, will coordinate the various CRP program opportunities. For more information on CRP and other FSA programs, visit a local FSA county office or go online to www.fsa.usda.gov.

Both the CRP and TIP were reauthorized by the 2014 Farm Bill. The Farm Bill builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America.

For more information, visit www.usda.gov/farmbill.

USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil Rights, Office of Adjudication, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (866) 632-9992 (Toll-free Customer Service), (800) 877-8339 (Local or Federal relay), (866) 377-8642 (Relay voice users).

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Tax Benefits of Employing Your Children

June 5th, 2014

Contributed by Charles BrownFarm Management Specialist, Iowa State University Extension and charlesBrownOutreach, crbrown@iastate.edu641-673-5841

If you operate a business such as farming, employing your teenage children for the summer can not only provide them some spending money and provide them some responsibilities, but can also provide some income tax benefits to the parents.

Making your children employees and paying them wages changes the typical non-deductible “allowance” to a business deduction on the Schedule F. This reduces the federal, state and self-employment taxes the parent has to pay. As long as the child is under age 18 the parent is not required to withhold social security tax. The child’s wages also will not be subject to federal unemployment taxes until the child reaches age 21. As long as the child’s total income for 2014 doesn’t exceed $6200 and their unearned income (investment income) doesn’t exceed $350 they will owe no income tax on their income. If their investment income does exceed $350 and their total income exceeds $1000 then they will have to pay income tax on their investment income. Unearned income (investment income) consists of such things as interest, dividends and capital gains.

Let’s look at an example of how this might work. Consider the parent who agrees to give his son or daughter a $5000 “allowance” for the summer based on the fact that they also agree to do some work around the farm. This could be running errands, doing chores, painting the barn, doing field work, etc. As an “allowance” the parent is out $5000 and has no tax deduction. Change this to an employer/employee relationship and the $5000 becomes a tax deductible wage expense. The tax savings will vary, but for someone who is in the 15% federal tax bracket the tax savings, including federal, self-employment tax, and state tax would be about $1700. So the net effect is that your child’s labor really only cost you about $3300. Again the child would pay no income tax if this is the only income they have.

To adhere to the tax laws, the child should receive a W2 at the end to the year as any other employee would. The child should also be paid a wage that is complimentary to the work being done. Paying the 5 year old for doing field work may not pass the scrutiny of the IRS. Sole proprietors and husband-wife partnerships can pay their children, but corporations have no children, even though they may be children of the stockholders.

As an added benefit of the child now having earned income a contribution could be made to a Roth IRA. The maximum IRA contribution for 2014 is $5500, but can’t exceed the earned income. The parent could make this contribution for the child, but the contribution would also count towards the $14,000 annual gift exclusion or $28,000 if both parents agree.

Contributions to a Roth IRA are not deductible, but all withdrawals after age 59 ½ are not taxable. Contributions of principal can be withdrawn at any time and up to $10,000 of earnings can be pulled out when purchasing your first home. If the child was 15 years old when the $5000 was invested, at 6% interest it would grow to about $80,000 by age 63 or $180,000 by age 75.

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Legal & Taxes, Whole Farm

Farm Employee Management: Farm Safety and Hiring Youth on the Farm

May 30th, 2014

Contributed by Melissa O’Rourke, B.S., M.A., J.D. Farm & Agribusiness Management Specialist, Iowa State University Extension & Outreach, morourke@iastate.edu

MelissaORourke2-Nov2011At this writing (May 2014) summer is approaching and many farm and other agribusiness operations will consider hiring youth for summer employment.  This makes it a particularly good time to review some guidelines related to hiring young people on the farm.  This article will outline a few guidelines, and also provide some web-based resources with answers to other questions.

We sometimes see tragic accidents—deaths and serious injuries— involving young farm workers.  These kinds of deaths and injuries to young people served as the impetus for regulators to propose strengthening child labor rules related to farm employment in 2011.  However, the US Department of Labor (“DOL”) abandoned proposed regulations in favor of increased farm safety programs.

The proposed regulations would not have applied to children working on farms owned by their parents under what is known as the “parental exemption” which allows children of any age who are employed by their parent, or a person standing in the place of a parent, to perform any job on a farm owned or operated by their parent or such person standing in the place of a parent. However, the proposals would have had other impacts in non-family farm employment situations, such as prohibiting youth (in all employment) from using cellphones or other electronic devices while operating power-driven equipment. Children under the age of 16 would have been prohibited from operating almost all power-driven equipment with limited exemptions for student learners.  After taking input, the DOL issued a statement regarding withdrawal of the proposals noting that the “administration is firmly committed to promoting family farmers and respecting the rural way of life, especially the role that parents and other family members play in passing those traditions down through the generations.”  Rather than adopting the proposed regulations, the DOL sought to work with rural stakeholders to develop educational programs to reduce accidents to young workers and promote safer agricultural working practices.

The need for continued vigilance and enhanced farm safety programs is undisputed. In the meantime – and particularly because of significant media attention given to this issue – farm producers have questions regarding the current rules for youth employment in farm and other ag-related occupations.

The basic guidelines include the following:

  • Youths of any age may work at any time in any job on a farm owned or operated by their parents.
  • Youths ages 16 and above may work in any farm job at any time.
  • Youths aged 14 and 15 may work outside school hours in jobs not declared hazardous by the DOL.
  • Youths 12 and 13 years of age may work outside of school hours in non-hazardous jobs on farms that also employ their parent(s) or with written parental consent.
  • Youths under 12 years of age may work outside of school hours in non-hazardous jobs with parental consent, but only on farms where none of the employees are subject to the minimum wage requirements of the FLSA – meaning small farms.
  • Local youths aged 10 and 11 may hand harvest short-season crops outside school hours for no more than 8 weeks between June 1 and October 15 if the employer has obtained special waivers from the DOL.

Again, minors under the age of 16 may not work in hazardous occupations in agriculture unless the youth is employed on a farm owned or operated by the parents. Also, 14- and 15-year old student learners enrolled in vocational agricultural programs are exempt from certain hazardous occupation prohibitions when certain requirements are met; and minors aged 14 and 15 who hold certificates of completion of training under a 4-H or vocational agriculture training program may work outside school hours on certain equipment for which they have been trained.

Hazardous occupations in agriculture would include the following particular examples:

  • Operating a tractor of over 20 PTO horsepower, or connecting or disconnecting an implement or any of its parts to or from such a tractor;
  • Operating or working with a corn picker, grain combine, hay mower, forage harvester, hay baler, potato digger, feed grinder, crop dryer, forage blower, auger conveyor, unloading mechanism of a nongravity-type self-unloading wagon or trailer, power post-hole digger, power post driver, or nonwalking-type rotary tiller;
  • Operating or working with a trencher or earthmoving equipment, fork lift, potato combine, or power-driven circular, band or chain saw;
  • Working in a yard, pen, or stall occupied by a bull, boar, or stud horse maintained for breeding purposes; a sow with suckling pigs; or a cow with a newborn calf (with umbilical cord present);
  • Felling, buckling, skidding, loading, or unloading timber with a butt diameter or more than 6 inches;
  • Working from a ladder or scaffold at a height of over 20 feet;
  • Driving a bus, truck or automobile to transport passengers, or riding on a tractor as a passenger or helper;
  • Working inside: a fruit, forage, or grain storage designed to retain an oxygen-deficient or toxic atmosphere; an upright silo within 2 weeks after silage has been added or when a top unloading device is in operating position; a manure pit; or a horizontal silo while operating a tractor for packing purposes;
  • Handling or applying toxic agricultural chemical identified by the words “danger,” “poison,” or “warning” or a skull and crossbones on the label;
  • Handling or using explosives; and
  • Transporting, transferring, or applying anhydrous ammonia.

The examples summarized above are based on federal regulations, but there may also be applicable state rules. Depending on the state where the youth employment takes place, those state rules should be consulted, and the law setting the most stringent standard (either state or federal) must be observed.

It is impossible to over-emphasize farm safety for all workers, both youth and adults. Producers should conduct farm safety audits and institute an on-going farm safety education program. Additionally, producers should consult with their own legal counsel for specific advice on any employment or liability questions that may arise, and consult with their insurance professionals to assure that adequate liability coverage is maintained for the operation.

Finally, here are some web-based resources with more information about hiring youth on the farm:

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May 23rd, 2014

Beginning Farmer Workshops from the Iowa Ag Development Division

May 12th, 2014

The Beginning Farmer program of the Iowa Agricultural Development Division of the Iowa Finance Authority is holding more than twenty workshops will be held statewide in May and June. Agricultural service providers, CPAs, Ag Attorneys, Ag Lenders, Farm Managers, ISU Extension staff, Farm Bureau staff and FSA Officers are encouraged to attend.

The 60-minute presentation will cover:

  • Benefits of the Beginning Farmer Loan Program for beginning farmers
  • Tax benefits for farmers interested in hiring or leasing land to a beginning farmer
  • Eligibility requirements for participants and programs
  • Timeline and process to apply
  • Program summaries, applications and other detailed information
  • Issues frequently faced by beginning farmers and farmers desiring to transition out of farming, and how both can benefit from these programs.

Locations are scheduled for:

Please pre-register for a free, regional workshop coming to your local area today! Registration is available on the IADD website.

Don’t see a workshop in your area? Check back often as workshops are being scheduled daily. For questions, or to request a training, please contact Emily Toribio, emily.toribio@iowa.gov, 515.725.4886.

For specific program questions, please contact Steve Ferguson, steve.ferguson@iowa.gov, 515.494.4979.

These workshops are a collaborative effort of the Iowa Agricultural Development Division of the Iowa Finance Authority, Iowa Society of Certified Public Accountants, Iowa State Bar Association, Iowa Farm Managers and Rural Appraisers, Iowa State University Extension, Iowa Farm Bureau Federation and the USDA Farm Service Agency.

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The 1st Official Look at 2014

May 9th, 2014

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

97hartsmThe 1st Official Look at 2014 (5/9/14)

With the May World Ag. Supply and Demand Estimates report, USDA provides its 1st official set of projections for the 2014 crops. We can compare these numbers to USDA’s unofficial numbers from the Ag Outlook Forum they hold in February each year. On the supply side, the number to watch is the yield. And is typically the case with the 1st estimates, USDA maintains trendline yields for both corn and soybeans. Those are 165.3 bushels per acre for corn and 45.2 bushels per acre for soybeans. Given the acreage estimates from the March Prospective Plantings report, then 2014 shapes up to be a record year for corn and soybeans. On the demand side, all of the sectors (feed, ethanol, crush, and exports) are in play. And the current projections are generally higher than those from February. Ethanol and export demand for corn was raised for both old and new crop corn. The weak spot on the corn side is feed demand, as fewer animals translate to slightly smaller demand. Export demand for soybeans continues to soar to record levels, while domestic crush demand also grows (but more slowly than anticipated in February). In the February outlook, season-average price estimates were set at $3.90 per bushel for corn and $9.65 per bushel for soybeans. With the higher demand numbers with the May report, these estimates move to $4.20 for corn and $10.75 for soybeans. So with Iowa production costs in the $4.50 range for corn and $11 range for soybeans, the USDA projections still indicate negative returns for both crops, but the gap has shrunk significantly.

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