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ASFMRA Ag News - January 16, 2024

By ASFMRA Press posted 01-16-2024 11:22 AM


Zuckerberg Gets Into the Cattle Game on Hawaii Ranch

In 2019, Facebook banned livestock sales between private individuals. It also began tightening down the hatches, so to speak, banning animal parts, pelts, and skin sales, including furs. That same year, PETA bought shares in Facebook hoping to have more of a say in the filtering process on Facebook. 

But now, Facebook’s co-founder and CEO Mark Zuckerberg has announced that he’s entering the farming and ranching industry. He made the announcement on the social media platform this week that he has begun raising cattle at his Ko’olau Ranch on Kauai. The ranch has been called a “top-secret compound” by some. 

Zuckerberg says his goal is to raise “some of the highest quality beef in the world” using Waygu and Angus genetics, feeding the cattle a diet of macadamia meal and beer. 

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Conservation Easement Tax Shelter Promoters Get 23 And 25 Years Prison

It is no secret that the IRS does not like syndicated conservation easement tax deductions. The government audits and litigates them, and some promoters even end up with criminal charges. The DOJ has confirmed that two men were sentenced for crimes arising from their organization, promotion and sale of abusive syndicated conservation easement tax shelters. Jack Fisher, a certified public accountant who began selling units in his abusive tax shelters at least as early as 2008, was sentenced to 25 years in prison.

James Sinnott, an attorney who joined Fisher’s scheme in 2013 and oversaw the massive expansion of the tax shelters’ fraudulent deduction amounts claimed from the IRS, was sentenced to 23 years in prison. Victor Smith and William Tomasello, both Atlanta-area CPAs, also pleaded guilty to conspiracy to defraud the United States.

According to court documents and evidence presented at trial, Fisher, Sinnott and their co-conspirators sold more than $1.3 billion in fraudulent tax deductions, leading to a tax loss to the IRS of more than $450 million. Five other tax professionals involved in Fisher’s scheme previously pleaded guilty. Fisher was a pioneer in the conservation easement industry, and one of its biggest promoters. Fisher and Sinnott each made millions promoting and selling their tax shelters to wealthy taxpayers. The two men also used fraudulent deductions generated by their tax shelters on their own personal income tax returns to reduce the taxes they owed on the millions earned.

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Iowa Legislature May Tighten Law Over Foreign Farmland Ownership

Iowa lawmakers say they expect to see bills in the upcoming legislative session to tighten state law on foreign ownership of farmland.

Whether those proposals would remove exemptions for some foreign land buys, require more reporting by foreign and corporate entities or push state agencies for more enforcement of farmland transactions still is uncertain.

“We don’t have a caucus bill we’re starting Day 1 with,” said Iowa Senate Majority Leader Jack Whitver, R-Grimes. “But I do believe that is an issue our caucus is interested in and I would suspect we’ll see a bill at some point about foreign ownership of land.”

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Firm to Farm: Top Ten Developments in Ag Law and Tax in 2023

As 2024 begins, it’s good to look back at the most important developments in agricultural law and tax from 2023. Looking at things in retrospect provides a reminder of the issues that were in the courts last year as well as the positions that the IRS was taking that could impact your farming/ranching operation. Over the next couple of weeks, I’ll be working my way through the biggest developments of last year, eventually ending up with what I view as the Top Ten developments in ag law and tax last year.

This article covers the first five topics, including:

  • Labor Disputes in Agriculture
  • Swampbuster
  • Railbanking
  • CAFO Rules
  • Charitable Remainder Annuity Trust Abuse

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One of Wyoming’s Most Storied Ranches Returns to Market for $67 Million

Founded in 1878, Pitchfork Ranch is 12 years older than the state of Wyoming and remains a working cattle ranch to this day. Photographer Charles Belden, whose now-famous snapshots of life on the ranch were published in national magazines between 1914 and 1940, later co-owned the ranch. His dark room is still housed in one of the ranch’s homes. His work, which quickly became known across the country, attracted the attention of many public figures. Aviator Amelia Earhart and actors Tim McCoy and Wallace Beery visited Pitchfork over the years.

While the ranch hit its peak in the early to mid-1900s, today it’s being sold as a turnkey operation that is owner-rated to feed 1,300 cows per year and operate a hay enterprise. Not only does the sale come with an operational business and facilities (including the cow herd, feed, and equipment), but the reputation of the ranch is known in the area and over the entire state for its expansive facilities and vast acreage. There are quality working facilities, several barns, an orchard, and a spring-fed yard. There are also eight residences, ranging from small cottages to large houses, as well as a tennis court, and a shooting range populated with mule deer, moose, whitetail deer, and grouse.

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ASFMRA Government Relations Update

Department of Labor Issues Final Rule Delineating Employee/ Contractor Determination

The Department of Labor issued a final rule on January 10, 2024 making changes to the determinations of employee versus independent contractor status under the Fair Labor Standards Act. The final rule is effective on March 11, 2024.

The new “independent contractor” rule restores the multifactor analysis used by courts for decades, ensuring that all relevant factors are analyzed to determine whether a worker is an employee or an independent contractor. The rule addresses six factors that guide the analysis of a worker’s relationship with an employer, including any opportunity for profit or loss a worker might have; the financial stake and nature of any resources a worker has invested in the work; the degree of permanence of the work relationship; the degree of control an employer has over the person’s work; whether the work the person does is essential to the employer’s business; and a factor regarding the worker’s skill and initiative.

The rule separately rescinds the 2021 Independent Contractor Rule that the department believes is not consistent with the law and longstanding judicial precedent.

Another Continuing Resolution for FY 2024 Funding

Over the weekend Congressional leaders announced their intention to pursue another Continuing Resolution (CR) for FY 2024. To give Congressional appropriators time to write the individual FY 2024 appropriation bills, the Senate is moving a CR to extend funding through March 1 (for the 4 bills with a January 19, 2024, deadline) and March 8 (the remaining 8 bills). Absent an extension this week, the Departments funded by the 4 appropriation bills through January 19, would shut down starting on January 20, 2024. The Department of Agriculture is one of those Departments.

The Senate will start the CR process and after passage move the bill to the House later this week. Speaker Johnson says he supports passage of a CR to avoid a government shutdown but is under tremendous pressure from Freedom Caucus members to not allow a vote on the CR. As a side note, we will be halfway through the Federal fiscal year at the end of March. Also, under a normal budget cycle schedule, the FY 2025 President’s Budget would be released the first Monday in February. That will now be delayed, postponing the FY 2025 budget/ appropriation process.

The delay in reaching a spending resolution will continue to stall action on the Farm Bill. House Agriculture Chairman GT Thompson (R-PA) had previously indicated his desire to markup a committee bill in March but also his reluctance to move a bill until FY 2024 spending is completed.

U.S. Debt Tops $34 Trillion

Last week the Department of Treasury’s Daily Treasury Statement showed for the first-time total U.S. debt toping $34 trillion (see table IIIC). The Congressional Budget Office (CBO) is projecting interest payments on the debt to rise substantially due to higher interest rates. Interest payments could top $1 trillion by the end of this fiscal year.

House Republican Majority Narrows

Former Speaker Kevin McCarthy retired from the House at the end of 2023 and Representative Bill Johnson (R-OH) will leave January 21, 2024, to become the President of Youngstown State University in Ohio. This will leave the Republicans with a 219 to 213 majority, basically a two-vote majority (ties aren’t possible). The tight majority has proven to be an intractable governing problem for the Republican majority this session of Congress.

FSA to Reopen Continuous CRP Signup

The Farm Service Agency (FSA) will begin accepting applications for the Continuous Conservation Reserve Program (Continuous CRP) signup on Jan. 12, 2024. The 2023 Farm Bill extension provided last year extended CRP authority for 1 year, through September 30, 2024. Thus, FSA can reopen signup for continuous CRP, which also includes the Conservation Reserve Enhancement Program (CREP) offered by FSA partners. Additionally, producers participating in continuous CRP can apply to re-enroll beginning Jan. 12, 2024, if their contracts expire this year.

FSA water quality practices, such as riparian buffers, prairie strips, grassed waterways, and wetlands, will receive an additional 20% incentive. The Climate-Smart Practice Incentive launched in 2021 is also available in the Continuous signup. FSA has not announced whether a general CRP signup will take place this year. 

In Memory: Jaret Wicker, AFM - Fishers, Indiana

The ASFMRA was honored and pleased to welcome Jaret into the membership in 2010. He joined as an Associate member and quickly obtained his Accredited Farm Manager (AFM) designation and went to the Accredited membership classification in 2014. Jaret volunteered his time and served on the Indiana Chapter Government Relations Committee as the Chair for both the appraisal side as well as the management side. He made many friends through his association with the Society who will miss him greatly. Our thoughts and prayers are with his wife and family. Jaret passed away on January 4, 2024 after living with cancer for two and half years. Learn more about Jaret’s life by clicking here.