Proposed Bill Would Increase Exemption for Estate Taxes
Congressman Jimmy Panetta of California has reintroduced a bill in the U.S. House of Representatives with the aim of increasing the 2032A special-use valuation cap for qualified family farms.
The intent of the increase is to reduce the number of family farms having to sell farm-related assets to satisfy an estate tax debt. If passed, the higher exemption will have a significant positive impact for farm families in taxable estate brackets.
2032A is a helpful tax valuation for farm families that reduces the value of some farm real property. Rather than having to value farm real property at market or development value, 2032A allows qualified family farms and ranches to elect a lower value based on a few specified formulas.
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Crops Significantly Deteriorate During Scorching Week
Last week’s temperatures in Iowa averaged about 10 degrees above normal — and much of the state had little or no rainfall — which led to a substantial decline in crop conditions, according to a U.S. Department of Agriculture report on Monday.
The share of the state’s corn and soybeans that is rated good or excellent receded 6 percentage points in a week, which reversed the improvements earlier this month.
About 54% of the state’s corn crop is rated good or excellent. About 53% of soybeans have those designations. Those ratings are among the worst of this growing season.
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Cash Rents Are Up, Again
Mirroring the national trend, cropland cash rental rates across the region were up again this year. Survey data from the National Agricultural Statistics Service show Ohio with the highest average cash rental rate at $178 an acre, followed by Michigan at $148 an acre.
Pennsylvania’s average cropland cash rental rate is $107 an acre, while New York’s is $79.50 an acre. The lowest cropland cash rental rate is in West Virginia at $45 an acre.
Renting irrigated land costs most in Massachusetts — home to a large cranberry-growing industry —at $301 an acre, followed by Michigan at $259 an acre, Ohio at $225 an acre and Maryland at $212 an acre.
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Mexico Won't Budge on GM Corn Import Restrictions
Mexico won't make any further changes to a decree on genetically modified (GM) corn ahead of a dispute settlement panel requested by the United States through the USMCA trade pact, Mexican economy minister, Raquel Buenrostro, told Reuters on Monday.
Buenrostro's comments come after the United States last week escalated its objections to the restrictions imposed by Mexico on imports of GM corn and requested a dispute settlement panel under the North American trade pact, the United States-Mexico-Canada Agreement.
Mexico in mid-February modified an end-2020 ban on GM corn, issuing a decree to allow its use in animal feed and the making of consumer products like cosmetics, textiles and paper. The new decree maintained a ban on GM corn for human consumption, specifically in the use of making flour for tortillas, which are a staple of the Mexican diet.
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In Cases Involving Partial Takings of Easements, Just Compensation Must Be Based on the Condemnor’s Maximum Possible Use of the Easement, Even if That Use Is Theoretical or Unlikely
Our office routinely handles utility takings, which often involve partial takings of easements for transmission lines or pipelines. As governments attempt to improve the electrical grid to support the transportation of wind and solar energy, this type of case is likely to become increasingly common. Although these takings may serve a public purpose, they often devastate residences and businesses whose properties become encumbered by invasive easements (and the humming and hissing of high-voltage transmission lines).
As in any case involving partial takings, just compensation is based on the difference in the property’s “fair market value” before and after the taking. In utility cases, the most challenging part of calculating that diminution is valuing the property after the taking. It is difficult to value a property subjected to an intrusive transmission line or pipeline. But it is even more complicated to value the property under the hypothetical situation where the utility company uses its newly acquired easement to the maximum extent allowed by law.
This blog illustrates the complications of valuing a property subject to utility easements and explains why property owners must fight for compensation based on the condemnor’s maximum possible use of the easement, even where that use is theoretical or unlikely.
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ASFMRA Government Relations Update
Biden Administration Submits FY 2024 Supplemental Funding Request
The Biden Administration sent a letter to Congressional leaders requesting emergency, supplemental funding for FY 2024. The amount of the request is additional “emergency” funding above the previously agreed to $1.590 trillion in the budget deal (Fiscal Responsibility Act of 2023) reached earlier this year. The request includes additional funding to support Ukraine as well as $12 billion for domestic disaster relief (FEMA related). Notably the request does not include any funding for ad hoc crop or livestock disaster payments for crop year 2023.
The additional funding, especially for Ukraine, creates a political divide between the Biden Administration and the Republican controlled House where many members do not support additional funding for the war, nor additional “emergency” spending. The supplemental request will be part of the expected negotiations between Democrat and Republican leaders in September to avoid a government shutdown. I expect Congress to add ad hoc crop disaster payments for crop year 2023 to the mix in these negotiations.
CRS Report Outlines Impact of Farm Bill Expiration
The Congressional Research Service (CRS) released a report last week detailing the impact of the expiration of the current farm bill. Importantly, for commodity programs the real expiration deadline is the end of the calendar year. For the farm commodity and dairy support programs that expire after the 2023 crop year, the consequences of expiration begin on January 1, 2024, not October 1, 2023. On January 1, 2024, inactive and outdated laws—commonly called “permanent law”—would be restored for dairy, the first commodity affected in the new crop year and result in government support prices well above market prices. So, the real deadline for an extension or new farm bill is the end of the calendar year, not the end of the fiscal year.
The report also notes that crop insurance is permanently authorized. The Supplemental Nutrition Assistance Program (SNAP) would continue via appropriations, and the bulk of the conservation programs had their authority extended through 2031, with the notable exception of the Conservation Reserve Program.
FSA Updates Livestock Payment Rate
The Farm Service Agency (FSA) announced it is updating the Livestock Indemnity Program (LIP) payment rate to support livestock producers in the Midwest who have lost cattle to the extreme heat and humidity experienced this summer. To indemnify ranchers to reflect a trend towards higher cattle weights in feedlots, the 2023 LIP payment rate for beef calves over 800 pounds will increase from $1,244 per head to $1,618, an increase of $374. The updated LIP payment rate is effective immediately and will be applied retroactively starting Jan.1, 2023, for all eligible causes of loss. Producers who have already received LIP payments for 2023 losses will receive an additional payment.
Soil Health Management Study Releases
The National Association of Conservation Districts (NACD), the Soil Health Institute (SHI), and the Natural Resource Conservation Service (NRCS) released a study of 30 farms showing the impact of soil health management systems (SHMS). The study assessed the economics of SHMS for a range of crops including canola, chickpea, corn, cotton, dried bean, grain sorghum, millet, pea, peanut, rye, soybean, sunflower, walnut, and wheat. Some of the operations also raised dairy cows, beef cattle, chickens, and hogs. SHI and NACD conducted extensive interviews with 30 farmers with an established history of successful implementation of a wide range of SHMS, including cover crops, no-till, reduced till, strip till, planting green, rotational grazing, livestock integration, and manure incorporation across 20 states.
According to the authors key findings include:
- Across 29 farms, SHMS increased net farm income by an average of $65/acre (1 organic farm was excluded due to high revenue from price premiums).
- On average, when implementing SHMS, it cost producers $14/acre less to grow corn, $7/acre less to grow soybean and $16/acre less to grow all other crops.
- Yield increases due to SHMS were reported for 42% of farms growing corn, 32% of farms growing soybean, and 35% of farms growing other crops.
- Farmers also reported additional benefits of adopting SHMS, such as decreased erosion and soil compaction, earlier access to fields in wet years, and increased resilience to extreme weather.
Proponents of SHMS are likely to use the study as an argument to propose changes to crop insurance rates based on production practices.
Cover Crop Use Survey
Findings in the seventh National Cover Crop Survey from CTIC, USDA-NIFA's Sustainable Agriculture Research and Education (SARE) program and the American Seed Trade Association (ASTA) yielded new perspectives and challenged commonly held notions linking land ownership to cover crop adoption. Slightly more cover crop users than non-users reported renting all their farmland (14% of users vs. 10% of non-users), and non-users were just as likely as cover crop users to own 100% of their farm ground. 795 farmers were surveyed representing 49 states, including commodity crop, horticulture, and livestock producers.
Welcome New Members
Help us welcome our newest members to ASFMRA! We are thrilled that you have chosen ASFMRA as the organization to be affiliated with. Because of you, ASFMRA continues to grow and support rural property professionals across the nation!
We are recognizing new members of the Society on a monthly basis. You may recognize your colleagues in the following list and we encourage you to welcome them into ASFMRA!
New Members
Lee Caesar with AVSO in Oklahoma City, OK (Oklahoma Chapter)
Scott Christopher with Christopher Auction Land & Farm Services LLC in Jackson, MN (Minnesota Chapter)
Debra Clem with Farm Credit Mid-America in Lafayette, IN (Indiana Chapter)
Scott Crockett with Manulife Investment Management in Boston, MA (Mid-South Chapter)
Landon Dull in Centralia, MO (Missouri Chapter)
Dillon Fevold with Hertz Farm Management in Humboldt, IA (Iowa Chapter)
Chris Hamilton in Grapevine, TX (Texas Chapter)
Trevor Thue with Farmers National Company in Lake Norden, SD (South Dakota Chapter)
Share Your Experience - Make a Referral
You know first-hand what a great organization ASFMRA is and what it means to you both professionally and personally. We thank you for spreading the word, you are the driving force behind our continued growth! Talk to those you know who would benefit from ASFMRA’s educational offerings, networking, and meetings. Let them know your experiences of being involved in this great association and some of the business contacts you have made along with lasting friendships. Your peers listed below have done just that! They spoke to individuals about ASFMRA and those individuals have now become members of ASFMRA!
Boyd Harris
Troy Parsell
Daniel Shively, ARA
Thank you to all who have referred someone and in some cases, more than one, to join ASFMRA.
In Memory: Rodger K. Tinjum and James W. Erlandson
Rodger K. Tinjum, ARA-Retired, of Detroit Lakes, Minnesota
The ASFMRA was honored and pleased to welcome Rodger into the membership in 1966. He joined as an Associate member and obtained his Accredited Rural Appraiser (ARA) designation and advanced to the Accredited classification in 1969. He maintained his Accredited membership until 2021 when he transferred to the Retired membership classification. Rodger served as the Minnesota Chapter First Vice President from 2006-07, a Minnesota Chapter Director from 2007-08, the Minnesota Chapter President from 2007-09, and as the Minnesota Chapter Alternate Director from 2010-11. Rodger made many friends through his association with the Society who will miss him greatly. Our prayers and thoughts are with his wife, Marilyn, and family. Condolences can be directed to Marilyn at: Marilyn Tinjum; 870 Longview Dr; Detroit Lakes, MN 56501.
James W. Erlandson of Dunlap, Illinois
ASFMRA was pleased and honored to welcome Jim into the membership in 1986. He joined as an Associate member and maintained his membership. The ASFMRA has just learned that Jim passed away in the middle of April 2023. He made many friends through his association with the Society and will be missed greatly. Our prayers and thoughts are with his family.