Farm & Ranch Tax Provisions Set to Expire
Provisions in the Tax Cuts and Jobs Act are set to expire in 2025 and could result in farmers, ranchers and business owners potentially paying more of their inheritance to the federal government.
The comprehensive tax cut package was enacted in 2017, and it lowered taxes for most individuals and businesses, including farms and ranches.
“The Tax Cuts and Jobs Act is extremely important for farmers, ranchers and small businesses,” Laramie Adams, Texas Farm Bureau associate director of Government Affairs, said. “The tax deductions and estate tax exemption provide much-needed relief to many farmers and ranchers. Without these provisions, taxes will increase, and that’s even tougher news for those in agriculture who are facing inflation and rising input costs.”
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For more information, ASFMRA members can access the recent "Uncertainties in D.C." webinar
Farmer Sentiment Improves As Interest Rate Expectations Shift
U.S. farmers’ perspective on the future improved in March helping to push the Purdue University-CME Group Ag Economy Barometer up 3 points from February to a reading of 114. The Index of Current Conditions at 101 was 2 points below a month earlier while the Index of Future Expectations reached 120, 5 points higher than in February. The split between the current and future indices was driven primarily by farmers’ perception that their financial condition has deteriorated over the last year while they expect their financial situation to improve modestly in the next 12 months. The March Ag Economy Barometer survey was conducted from March 11-15, 2024.
Producers’ expectations for interest rates have shifted which could help explain why producers look for financial conditions to improve. This month nearly one-half (48%) of respondents said they look for the U.S. prime interest rate to decline over the next year. That’s up from 35% of farmers who said they expect rates to decline the last time this question was posed in December 2023. And just one-third (32%) of respondents in March said they expect interest rates to increase in the next 12 months compared to 43% of respondents who were looking for rates to rise in the upcoming year when polled in December. Just 20% of respondents this month said the risk of rising interest rates was a top concern, down from 24% who chose it as a top concern in December. Producers remain focused on high input costs as their number one concern, chosen by 36% of respondents in this month’s survey.
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$58 Million Historic Ranch in Wyoming is Sold
One of Wyoming’s most expensive properties is off the market. The storied Gros Ventre Ranch, which has been rebranded the Grand View River Ranch, has sold to an undisclosed buyer, according to real estate brokerage Keller Williams Jackson Hole.
The property had been listed for $58 million and is one of those very rare inholdings in Teton County that’s surrounded by Grand Teton National Park and the Bridger Teton National Forest. They surround the ranch with incredible wilderness views that are never likely to change, unless the mountains and the forests themselves do the changing.
The ranch has unparalleled access to hiking and horseback riding trails, and a portion of the Gros Ventre River crosses the front of the property, giving private access to a river that supports a strong native fishery.
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Land Managers Talk Estate Tax Reform and Herbicide Bans
If you ever had the privilege of wearing a blue corduroy jacket, you may remember a trip to Springfield, Ill., back in your high school FFA days for Ag Legislative Day, usually held in March.
Although I never wore corduroy blue, I did have the chance to accompany Nick Suess, Field Level Agriculture, and Eric Schumacher, AFM, First Mid Ag Services, to this year’s event, where we met with our legislative representatives from our own districts.
You may be thinking, well that’s fine and dandy, but how does this concern me?
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Bankruptcies, Lower Land Values for California Ag
The gravity of higher interest rates and other economic woes forced agricultural land values down last year. Some think it’s just the beginning of something bigger.
The annual Trends Report, published by the California Chapter of the American Society of Farm Managers and Rural Appraisers, records a downtrend in ag real estate values that began within the past year. This comes on the heels of higher lending rates and dismal commodities prices from popular crops like almonds and walnuts.
What was characterized in the Trends Report as a “mostly stable” and “resilient” agricultural land market in 2022 changed abruptly in the first quarter of 2023.
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ASFMRA Government Relations Update
Congress Returns After Two Week Recess
The Senate and House return this week for a two-week work period in Washington D.C. Emergency funding for Ukraine and Israel along with the reauthorization of the Foreign Intelligence Surveillance Act (FISA) are at the top of the agenda for the next two weeks. There are also rumors that the House Agriculture Committee Republicans may release a “Chairman’s mark” farm bill in April.
House farm bill action is admittedly overdue. Chairman Thompson (R-PA) wants to move a bill. The question remains whether he can do so in a bipartisan manner and, if so, whether it can pass the House floor. The House is scheduled to be in session for 4 consecutive weeks starting at the end of April through Memorial Day in May. This is one of the longest consecutive work periods scheduled throughout the year and a perfect opportunity to introduce a farm bill, mark it up at the Committee level, and leave time for floor consideration shortly thereafter.
Funding remains a real problem. Chairman Thompson has floated 3 main funding sources to offset identified needs: limiting Commodity Credit Corporation discretionary authority, cutting remaining Inflation Reduction Act (IRA) conservation money and moving some into the Conservation title and some into other titles (mostly the Commodity title) and making any future Thrifty Food Plan updates budget neutral. The latter two options are likely to be opposed by some, if not all House Democrats. Absent these offsets, House Republicans would be unable to bolster commodity, crop insurance, and trade promotion spending, which are their top farm bill priorities. While threading the farm bill needle in the House is a real challenge, on the other side of the Capitol, the Senate appears to be making no progress on the farm bill currently. Senate Agriculture Committee Chair Stabenow (D-MI) appears satisfied with the status quo and Senate Republicans appear to be looking forward to the next Congress when they expect to retake the Senate majority.
USDA Announces $1.5 Billion Availability for Regional Conservation Partnerships
Last week Agriculture Secretary Tom Vilsack announced the availability of $1.5 billion in fiscal year 2024 funds to invest in partner-driven conservation and climate solutions through the Regional Conservation Partnership Program (RCPP). The funding is made available from the 2018 farm bill and the Inflation Reduction Act (IRA). The maximum funding available for each proposal is capped at $25 million. Proposals are due July 2, 2024.