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Will FAV Favor ARC-IC
For farmers who grow vegetables (sweet corn, sugar beets, green peas, etc.), a reduction in their base acres for payments may occur each year. FAV (fruits and vegetables) requires farmers to reduce their base acres for acres planted to either fruits or vegetables. Since the new programs do not make payments on all base acres, farmers […]
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Harvert Price Option Event on the Hill
Tomorrow, February 12, 2015, Senator Jeff Flake (R-AZ) and Representative John Duncan Jr. (R-TN) will introduce legislation pertaining to the Harvest Price Option (HPO) available for most revenue crop insurance programs. The HPO allows for a claim when prices are actually higher than the initial discovery price. For example, during the 2012 drought, having this option […]
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Is a Bird in Hand Worth 4 in the Bush?
For many of our farmers mulling the decision between ARC and PLC it comes down to is it better to grab the “bird in hand” by electing ARC-CO on all corn acres (and wheat in the Pacifc Northwest) versus electing PLC in case prices go low for several straight years. I have run numerous calculations […]
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How Do Repair Regulations Affect My Farm Operation?
The IRS issued new regulations on how to account for repair and maintenance costs and the required capitalization of fixed assets purchases about a year and half ago and most of the provisions are now effective with tax returns beginning January 1, 2014. I have taught on this subject at several tax CPE classes in […]
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My Neighbor is Getting an ARC Payment, Why Not Me!
I am starting to hear some of the “coffee talk” about neighbors getting ARC-CO payments for corn this year, but the farmer is not getting one and they ask “How can that be?”. Now, the term neighbor can be a little borad since the neighbor may be 10-20 miles away, however, they may be at least […]
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Excessive Claims for Fuel Tax Credits Makes the IRS “Dirty Dozen List”
The IRS just released a bulletin yesterday announcing that filing tax returns claiming excessive amounts of fuel tax credits is now on their “Dirty Dozen” list of tax scams for the 2015 filing season. We find that most farmers purchase fuel that is exempt for state and federal gas taxes for those gallons that are consumed […]
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Estimated Wheat ARC-CO for PNW Counties
I spoke at the Spokane Farm Forum yesterday on the choices between ARC-CO and PLC and thought I would update estimated net payments for wheat ARC-CO for some of the counties located in the Pacific Northwest. Based on actual state data, Washington, Oregon and Idaho are estimated to have the largest wheat ARC-CO payments for […]
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Farm Loan Growth is Driven by Leaner Profits
The Federal Reserve Bank of Kansas City just released their latest Agricultural Finance Databook and as expected lower farm profits are leading to increased demand for operating loans. However, some of this increase is also due to the rapid increase in livestock prices during 2014 which results in greater operating loans just to service the […]
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Updated Information on Crop Insurance Budget Proposals
Yesterday, we had posted on proposed reductions in the crop insurance premium subsidy that the farmer normally pays based upon our review of the actual budget released by the White House. Today, I received more information on the actual proposed changes. First, President Obama calls for reducing the premium subsidy by 10% for revenue coverage […]
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President Has Crop Insurance in His Crosshairs
The President’s Fiscal Year 2016 budget just came out and one of the areas that he has identified for savings is reduction in the subsidies for crop insurance. Quoting the budget directly: “Overly generous benefits have almost eliminated the risk in farming at a cost to taxpayers in the billions. The Budget includes reforms that […]
