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Farm Bill Update
The farm bill and farm aid package has been in the news for the past several weeks. Finally, we have legislation. First a quick review of the 1996 Federal Agriculture Improvement and Reform Act (FAIR). This bill had some unique features in comparison to previous farm bills. For example, Title 1 Agricultural Market Transition Act (AMTA) which includes the Production Flexibility Contracts, Planting Flexibility, Nonrecourse Marketing Assistance Loans, Commodity Credit Corporation (CCC) Reforms, Crop Insurance, as well as several other features.
In late October, Congress passed and the President signed the legislation concerning emergency aid to farm producers. The
legislation is technically referred to as The Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2000, and became law on October 22. A few highlights of the legislation:
The majority of the income assistance payments $5.5 billion in supplemental production flexibility contract payments began October 25. Most of the disaster assistance payments, such as crop loss disaster assistance, will be made early in 2000. The reason is because those programs require a sign-up period and a determination of eligibility. According to USDA in Washington, the funds for emergency farm loans are extremely limited, and will probably be depleted before the new year.
The law also provides a provision allowing farmers eligible to receive production flexibility contract payments (also called AMTA payments) in fiscal year 2000 to receive the payment either all at once or in two equal payments during the fiscal year, October 1, 1999 through September 30, 2000.
The supplemental payments from this legislation will pump more than $170 million into the Missouri economy. The payments will go to nearly 60,000 agricultural producers throughout the entire state. Nationwide, the supplemental payments will total nearly $5.5 billion.
(Author: Mary Sobba, Farm Management Specialist, Univ. of Missouri Extension)
There are several considerations to keep in mind for the growing season after a drought. If the crops grown during a drought did not grow, yield, or perform as expected, then there may be leftover fertilizer that can be used for the coming season. The first consideration is if the field(s) were fertilized to recommended levels for an expected yield or above. This is important since if there was not a full rate applied, then the idea of leftover fertilizer may not be applicable. The other considerations have to do with the variability and severity of the drought conditions, how much the crop was affected, and how the crop was handled during the harvest. Every field probably had varying amounts of rain, were planted at different times, in different soils, to different crops and varieties so each field should be evaluated individually.
The extent of a drought and the crops condition can be looked at together. There should have been some yield expectations. Reductions in the yield are compared to the expected yield to give an idea of the damage from a typical year. This difference is used to determine the amount of fertilizer that may remain. A ratio of actual yield to expected or planned yield gives a fraction or percentage that can be used to calculate the amount of fertilizer remaining. For example, if the expected yield of corn was 120 bushels per acre and only 60 bushels were harvested, then approximately half of the applied fertilizer was used. This method is the initial calculation. It should be used for the phosphorous (P) and potassium (K) fertilizers only. These fertilizers are stable, tend to remain near the soil surface, and do not leach. Nitrogen (N) is less stable in the soil, may be tied up, and tends to leach so it may or may not be near the soil surface.
Actual yield versus expected yield does not take into account the harvest method used. During a drought year there are more harvesting methods used to better take advantage of the drought-damaged crop. A typical harvest where the grain is combined still can include grazing, bailing, or leaving the stover. Each of these methods leaves or removes different amounts of nutrients. Heavily damaged grains may be put up like hay, cut for silage or green chop. Estimates have to be made that relate back to the amount of yield or growth to determine fertilizer use. In extreme cases the field may be abandoned which essentially leaves all the P and K fertilizer.
Nitrogen carryover may be likely during a drought year if the crop was a non-legume, if moderate to high N applications were made, the field is a silt loam or heavier soil, and the winter has normal or below normal rain fall. The N losses are more difficult to estimate. A nitrate soil test may be the only solution to determine the actual amount of N remaining.
Nitrate soil samples should be taken by making random samples in not more than 20 acre blocks, at one and two foot depths (depending on estimates of leaching), and air dried immediately or frozen to prevent N degradation. Samples should be analyzed for different soils and different production practices. A regular soil test is another valuable method to determine the amounts of fertilizer needed for the next year.
Another way to determine the amount of fertilizer used is to calculate the amount of nutrients removed in each bushel of grain or ton of forage. The following table shows the amount of nutrient removed for common crops.
(Author: Jim Jarman, Agronomy Spec., University of Missouri Extension)
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Missouri's Next Noxious Weed
The Missouri State Weed Law contains several plants it calls noxious weeds. As used in this law, the term "noxious weed" officially includes bindweed, Johnson grass, multiflora rose, Canada thistle, musk thistle, Scotch thistle, and purple loosestrife. Other weeds can be designated as noxious by the director of the Missouri Department of Agriculture. Will cut-leafed teasel join this list?
Teasel was brought to this country in the 1800's. Its spiny seedhead was used for carding wool and cotton fibers before spinning. Common teasel was the predominant plant, but cut-leafed teasel seed was also introduced. Cut-leafed teasel has also spread through its use in flower arrangements. Its unusual seed heads and stiffness when dry make it a popular addition to dry and fresh flower arrangements. Once established in an area, its aggressive nature can quickly allow it to begin taking over a site.
Large infestations of cut-leafed teasel can be seen along interstates and other right-of-ways in Missouri. Other states like Illinois are complaining about cut-leafed teasel invading prairies, meadows and other similar habitats. It is best adapted to sunny locations and a wide range of moisture conditions.
The greatest problems come from cut-leafed teasel's aggressive nature. The rosettes crowd out native and established vegetation. Once it is established in an area, it can quickly form large patches. Such patches will present problems in pastures, ditch banks, roadsides, railroad right-of-ways, and natural areas. The availability of palatable forage is reduced, domestic animal and wildlife habitat is eliminated, recreational values are lowered, and erosive situations are created.
Cut-leafed and common teasel are generally considered to be biennials, although they can complete their life cycle during one season. Teasels start as a low growing vegetative stage called a rosette. During the rosette stage it grows a taproot that may be 2 feet deep. If they sprout early enough in the season, a central stalk emerges that may reach 6 to 7 feet tall. Cut-leafed teasel's white blooms are present from July through September. Common teasel is easily separated with their purple to pink blooms seen from June to October. Flowering of either species may be extended if the plants are cut down before the blooms mature. The flowers are densely packed into an oval or egg shaped head with long, slender spines at its base. The stalks are strong and covered with shorter spines.
For more information on cut-leafed teasel and its control, contact your local University of Missouri Extension Center.
(Author: Jim Jarman, Agronomy Specialist, University of Missouri Extension )
Year-End Tax Planning Tidbits
Now is the time of year for year-end tax planning. The following list will be helpful in determining areas where tax management adjustments can be made.
1. Calculate your current taxable income and make year-end adjustments.
2. Section 179 "capital expense write-off election" has been increased to $19,000 for 1999.
3. If more than 40% of your depreciable asset purchases were acquired in the last quarter of this year, you will be required to use mid-quarter depreciation instead of mid-year depreciation.
4. Analyze sales of capital assets be aware of the annual net capital loss limitation ($3,000 joint & $1,500 single).
5. Avoid year-end (paper) overdrafts. If necessary, borrow the needed funds for a few days to cover year-end expenditures.
6. Review the three year farm income averaging or five year net operating loss carryback provisions, as appropriate.
7. Consider utilizing pension, individual retirement accounts (IRA), or Roth IRA.
8. Be aware the IRS is vigorously and successfully reclassifying cash rents paid to shareholders, partners, and spouses where they concurrently participate in the business operations - as earned income subject to self-employment tax.
9. The self-employment health insurance deduction has been increased to 60%.
10. The maximum earnings subject to Social Security has been increased to $72,600.
11. You generally must make periodic deposits of employee taxes if you are liable for $1,000 or more of Social Security, Medicare taxes, and withheld income tax.
12. By January 31 you must furnish each employee with a Form W-2, as well as 1099s to cash rent non-corporate landlords, contractors, etc. who were paid $600 or more throughout the year.
13. Review all your 98 and 99 CCC grain loan and market loan gain transactions to insure you are not over reporting taxable income from these transactions.
14. Complete any gifts by December 31 which you desire to be included in transfers qualifying for the 1999 calendar year $10,000 annual gift exclusion per donee.
15. Conduct an "estate fire-drill" you just "DIED" dont worry about the exactness of the tax liability but in general, what would be the tax liability and settlement costs. How would your assets be distributed; how will your liabilities be handled; who will manage the business; do you foresee any intra-family problems generated by your demise; etc., etc.? Did the estate fire-drill identify some areas to be given greater attention?
(Author: Parman R. Green, UO&E Farm Business Mgmt. Specialist)
Ag Connection - December 1999