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ASFMRA Ag News - January 4, 2022

By ASFMRA Press posted 01-04-2022 08:56 AM


Eleventh Circuit Deals IRS Defeat In Conservation Easement Struggle

The Eleventh Circuit has thrown a monkey wrench into the IRS machinery grinding away at abusive conservation easement deductions. Judge Barbara Lagoa, a Trump appointee, wrote the opinion in David and Tammy Hewitt v Commissioner of IRS issued on December 29, 2021.

The Hewitts were appealing a 2020 Tax Court decision by Judge Goeke. The Hewitts had claimed a $2.8 million deduction on their 2012 return. Somehow the 2012 return got by, but the IRS was disallowing carryovers in 2013 and 2014. Judge Goeke agreed with the disallowance resulting in deficiencies of $336,894 and $347,878 for 2013 and 2014 respectively, but passed on valuation and accuracy penalties.

Judge Goeke based total disallowance of the deduction on the failure of the easement document to meet the perpetuity requirement (Section 170(h)(5)(A)). The problem was with the clause in the agreement as to what would happen in the event that the easement was extinguished by judicial action (such as a taking of the property by eminent domain).

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Maine Farmers Concerned About Solar Developers Using up ‘Prime’ Farmland

There are growing concerns in Maine's farming community about the increased use of farmlands for large-scale solar development.

Carl Wilcox, who owns Intervale Farm in New Gloucester, says he has received more than a dozen offers from solar developers to build on his property but has declined them all. Wilcox isn't against solar power — he has solar panels on his barn — but says his land is more valuable without solar panels on it should he ever sell it.

Wilcox says he has a friend nearby who farms and leases land to grow corn but recently sold his prime land to a solar developer.

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As the Climate Changes, New Efforts Arise to Diversify What’s Grown in the Corn Belt

In 2014, Jason Federer began transitioning his Indiana farm to organic. The 4,000-acre operation had been in his family for three generations, and had always been managed with sustainability in mind. He remembers his father sprinkling in clover with the cash crops, long before the term “companion crop” made its way into the mainstream. Going organic meant diversifying his rotation, and instead of working with two or three cash crops he was suddenly working with an average of 10 annually — corn and soybeans, of course, but also wheat, rye, oats, barley, sunflowers, buckwheat, and peas, as well as cover crops like clover and alfalfa.

Federer is a part of a growing number of farmers, researchers and nonprofits working to transform the Midwestern corn and soybean belt into a more diverse cropping region. In October, the USDA gave $10 million to a new project at Purdue University designed to study how to help farmers like Federer as they diversify their farms.

Linda Prokopy, a professor of horticulture and landscape architecture at Purdue and the lead investigator on the project, says that diversifying beyond traditional corn and soybean systems can have both ecological and economic benefits for farmers, as well as help them adapt to climate change.

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Rising Missouri Land Prices Not Likely to Wane in 2022

Buyers paid more for land in 2021, and University of Missouri agricultural economist Ray Massey says that is likely to continue in 2022.

Massey led the Missouri Farmland Values Opinion Survey report from University of Missouri Extension. He says several factors have driven cropland and pasture value changes, including high commodity prices, low interest rates and proximity to urban areas. In recent years, strong farm revenue contributed to increasing cropland values.

“If people have money in their pocket, they are willing to buy land, and they will pay more for it,” Massey says.

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USDA Can Predict Grazing Cattle Weight Gain From Satellite Imagery

The U.S. Department of Agriculture’s Agricultural Research Service has developed a unique approach to using satellite imagery to predict cattle weight gain on rangelands. By fusing multiple images over a period of time, scientists were able to monitor how forage quality changes over space and time in rangelands within the shortgrass steppe, and how this relates to the weight gain of free-ranging cattle throughout the summer grazing season.

Managing the grazing season in rangelands can be challenging due to high variability in temperature and rainfall over time. From a manager’s perspective, it is essential to know when and where forage production and quality are changing to optimize free-range livestock weight gain and meet other environmental objectives. This is not just about chasing forage quantity (total amount of vegetation biomass); it is also about looking for the highest-quality forage throughout the season.

“This study is probably the first-time high-quality datasets have been used to predict cattle weight gain directly from satellite imagery,” said Sean Kearney, a post-doc research associate in Fort Collins, Colorado.

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ASFMRA Government Relations Update

Congress Returns, Unfinished 2021 Business Looms

The Senate is scheduled to convene at noon Monday to start the second session of the 117th Congress. But it is a snow day in Washington with significant accumulation occurring. Many flights have been canceled and the Federal government in the Washington area is closed as a result.

Senate Democrats are expected to determine an approach to try to move President Biden’s Build Back Better bill this week. Odds favor the Democrats will scale back the $1.75 trillion bill to get Senator Manchin’s (D-WV) vote for passage in the Senate with separate bills/ votes for items that don’t make the final cut.

The House is scheduled to start its 2022 legislative session next Monday, January 10th. House and Senate Appropriation Committee leaders have a little over a month to negotiate topline spending numbers for FY2022 to finish the FY2022 appropriations bills. Currently the government is funded under a Continuing Resolution through February 18th, 2022.

House Agriculture Committee Chairman Scott’s Year in Review

House Agriculture Committee Chairman David Scott (D-GA) released an end of year highlight summary detailing the Committee’s work for the year in December. In the press statement the Chairman notes he looks forward to starting the 2023 Farm Bill review process. So far, no hearings are scheduled for January.

White House, USDA, and DOJ to Focus on Meat Supply Chain

President Biden will meet virtually with farmers, ranchers, and independent meat processors from across the country to hear from them and to announce the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. USDA Secretary Tom Vilsack and Attorney General Merrick Garland will participate in the meeting to explain the steps the administration is taking to increase processing options for farmers and ranchers and to create fairer and more competitive markets.

The White House released an action plan in advance of the meeting which includes $1 billion to expand independent meat processing capacity.