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Taxation Tidbit: Incentives
Increased for Health Savings Accounts (HSAs)
Last month’s Taxation Tidbit
provided an introduction to health savings accounts. On December 20th the
President signed legislation that provides increased incentives for
utilizing health savings accounts. The following is a summary of these
The annual contribution
limit to the HSA is no longer limited to the selected deductible
amount of the high deductible health plan. Thus, the contribution
limit is now the maximum deductible of qualified high deductible
Contributions to HSAs
are no longer reduced for partial year coverage in the initial year
of plan participation.
Also new for 2007 is the
one-time option to roll over funds from a traditional IRA to your
HSA. The maximum amount of the roll over is equal to the annual HSA
further information on health savings accounts, see the January 2007 issue
of Ag Connection:
(Author: Parman R. Green, MU
Extension Ag Business Mgmt. Specialist)
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How Long Does It Take Beef Producers to
Pay for Renovating Fescue Pastures with Novel Endophyte Fescue?
With the development of novel endophyte fescue, producers are asking how
long it will take to pay to renovate their toxic endophyte infected Kentucky
31 fescue pastures. If producers are planning on renovating a pasture
because of stand thinning or are converting it from crop land, it makes good
sense to establish novel endophyte fescue because of the added gains it will
produce. The breakeven investment period for renovating a good stand of
endophyte infected Kentucky 31 is quite different and depends upon the type
of livestock that will be grazing the forage.
Whether establishing novel endophyte fescue, warm
season grasses, or another cool season grass, renovating fields is not
cheap. The costs of seed, fertilizer, lime, tillage, herbicide
and planting quickly add up. The total cost of renovating a field of
Kentucky 31 with a novel endophyte fescue is approximately $200/acre.
For stockers it depends upon how much added gain will be produced from the
novel endophyte vs. the toxic fescue. The following table shows the years
required to recover an investment at various rates of increased average
Years to Break-Even
- Renovation With Stockers
Increased Rate of
Years to Breakeven
If calves gained as little as ˝ lb more
per day the $200 investment would pay for itself in only three years. Many
studies have shown that stocker calves grazing only toxic fescue without
additional management practices (supplementation, legumes, pasture clipping)
will gain approximately 1 lb/day while the same calves grazing endophyte
free or novel endophyte fescue gain 1.75 lb/day.
For cow/calf producers the decision gets a little more complicated.
have shown that weaning weights can be significantly increased by renovating
to novel endophyte fescue. Stocker calves are usually stocked at one
calf/acre, while cow/calf operations usually need two to three acres/cow
throughout the year. This significantly increases the renovation cost per
animal sold. The following table displays the net present value of the
investment figured at 10 years when the stocking rate is 2 acres/cow.
Net Present Value of Renovation Decision – Cow/Calf
It takes an additional 75 lbs of weaning
weight per cow per year to make the investment pay for itself in less than
ten years. However, this does not take into account possible market
discounts for calves exhibiting signs of fescue toxicosis such as rough hair
coats. If the market discounts these calves compared to calves on novel
endophyte, the net present values would be increased significantly.
The main advantage of novel endophyte fescue is in its ability to improve
conception and calving rates. A study by Andrae and Lacy from the University
of Georgia calculated the following years to breakeven if a beef producer
received a 55 lb heavier weaning weight/cow as well as an increase in
calving rate to 90%. This analysis does not take into account the possible
market discount for calves with fescue toxicosis symptoms. The stocking rate
was assumed 2.2 acres/cow.
|Years to Break Even
(Increase Calving Rate to 90%)
Renovation Decision With Cow/Calf
|Current Calving Rate
||Years to Breakeven
When considering whether to destroy a good
stand of Kentucky 31 and establish novel endophyte fescue, for stocker
operators the added gain will repay the investment in only a few years.
Cow/calf operations require more acres per cow and therefore added weaning
rate alone may not be enough to make the investment pay for itself unless
calves are discounted because of fescue toxicosis symptoms.
critical variable for cow/calf producers is calving rates. Replacing open
cows is expensive and if calving rates can be increased it will decrease the
time required to breakeven. As always, the decision will be different for
each producer and will depend a lot upon their current operation.
(Author: Wesley Tucker ,
Agriculture Business Specialist)
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Missouri Newsletters on
Horticulture and Agroforestry
Are you a rural landowner who is an
avid gardener, interested in growing produce, or contemplating how to
utilize forested ground? The following newsletters are available, and
feature timely articles on horticulture, agroforestry and events of
Missouri Environment and Garden is distributed
monthly and has three to eight articles on seasonal garden topics.
A favorite feature is the ‘Gardening Calendar’, which
provides categorical seasonal tips and reminders on vegetables,
fruits, lawns, ornamentals and miscellaneous. The contributors are
primarily MU campus specialists in the horticulture field.
Subscriptions are $20 per year and may be obtained by mailing
payment (check or money order made payable to the University of
Missouri) to Plant Protection Programs, 210 Waters Hall., Columbia,
MO 65211. Free web access is at
http://agebb.missouri.edu/hort/meg/index.htm, which also offers
a search engine for articles from previous newsletters.
The Berry Basket
newsletter focuses on small fruit, specialty fruit and general
gardening. Missouri State University and MU Extension- Greene County
collaborate to publish and distribute it. It is free to Missouri
residents; just e-mail or call Pamela Mayer (Outreach/Publications
with Missouri State – Mountain Grove) at 417-547-7500 /
Web access is at
The Missouri Vegetable
Growers Association Newsletter is mailed quarterly and the articles
and announcements are oriented toward commercial growers. One
receives the newsletter by joining the Missouri Vegetable Growers
Association (MVGA). The dues are $10 per year. MVGA organizes a
number of farm tours and other educational activities every year and
many are in the Central Missouri Region. Call 573-378-2655 to join
MVGA and ask to speak with Norman Kilmer, the current secretary.
Green Horizons is
published quarterly by the University of Missouri Center for
Agroforestry (UMCA). The twelve page newsletter has more than ten
articles and covers a wide range of issues related to forests,
woodlots, mushrooms, and nut tree culture. It is free to Missouri
residents; just e-mail or call Rachel McCoy (Senior Information
Specialist with UMCA) at 573-882-9866 /
firstname.lastname@example.org . Web
access is at:
James Quinn, Horticulture
[This Month in Ag Connection]
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Ice Storm and Hay
Staff of the Missouri Cattlemen’s Association (MCA) have been working to
assess the damage to beef operations in Southwest Missouri caused by the
recent ice storm and to put together a disaster relief strategy for affected
producers. In addition to requesting state and federal disaster relief
funding, MCA has been working to get essential supplies, including hay, to
producers in need.
Cattlemen and women in need of hay can utilize the
The Commercial Ag Hay
List, which lists hay for sale in Missouri and surrounding states.
The list is available at
http://agebb.missouri.edu/haylst/ and is the most up-to-date
The Missouri Department
of Agriculture Hay Directory, which also lists hay for sale in
Missouri and surrounding states. The MDA Hay Directory is available
http://www.mda.mo.gov/Market/haydirectory.htm. A hard copy is
also available by calling the Hay Hotline at (800) 877-4429.
Producers wishing to sell or donate extra hay to help fellow cattle
producers may do the following:
Call the Hay Hotline at
(800) 877-4429 to add your hay to the sale list.
Logon to the Commercial
Ag Hay List at
http://agebb.missouri.edu/haylst/ and submit a listing of your
hay for sale.
Call the Missouri
Cattlemen’s Association at (888) 499-9162 and ask for Brent Bryant
(ext. 230), McKenzie Disselhorst (ext. 233) or Ken Disselhorst (ext.
243). The MCA staff will work with you to help sell or donate extra
hay to producers in need.
Producers who have been affected by the storm are
urged to call the Missouri Cattlemen’s Association at (888)
499-9162 or e-mail
email@example.com to report damages and needs. Pictures of storm
damage are also needed and should be e-mailed to
pictures and reports will help us to better assess and respond to the needs
of cattle producers affected by the storms.
(Author: Wendy Flatt,
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