Minding Ag's Business
Marcia Zarley Taylor DTN Executive Editor

Thursday 06/25/15

Story Book Endings for Estate Taxes
The fact that very few farm estates pay federal taxes is no accident. Most farm families spend a decade or more gifting and transferring assets to keep their family business intact.[Read Full Blog Post]
Posted at 5:28PM CDT 06/25/15 by Marcia Zarley Taylor | Post a Comment
Comments (8)
This is why I get a kick out of the all the uproar over the estate tax. If you have a good plan implemented, you more than likely can skirt the taxes owed. I don't know exactly how many farmers there are, but if you assume there are currently 2,000,000 farm estates, ones that are actively farming, then you would roughly have about 54,000 farmers that would have a problem. That's pretty small potatoes, and those 54k have some money/assets that can handle the tax. The secondary side of this estate issue is one that I don't see answered very often. If I am an active farmer in my 70's and I have no children that are active in the farm, when will that land ever hit the open market for an active farmer to buy it? It's a legitimate question that doesn't get answered. Considering that 90% of farms do not make it to the 3rd generation, this is something that people forget about...absentee landowners that are so far removed from agriculture that they see it as an investment or really care when revenue is below the cost of production.
Posted by Pedro Sanchez at 8:37AM CDT 06/26/15
$20M estate and no estate taxes??? Greece here we come!
Posted by Unknown at 8:17PM CDT 06/30/15
The American Farmer should be proud to pay taxes.
Posted by Unknown at 8:19PM CDT 06/30/15
Farmers with estates worth multi-millions should be ashamed that they feel they need to avoid taxes. What an embarrassment to the rest of farmers and society. I can't believe the author is advocating that the uber rich should be allowed to avoid taxes. I bet she also wonders why this country is broke. GET A CLUE AMERICA!
Posted by Bill Billson at 9:42PM CDT 07/01/15
Where does everyone think these assets came from? They were purchased with money that was already taxed once as income tax. How is double taxation fair. The reason the country is broke is because achievement is punished through wealth redistribution. Maybe if people were allowed to keep more of what they work so hard for, there would be more of an incentive to work in this country
Posted by Jacob West at 4:30PM CDT 07/02/15
I do not understand why the government should be entitled to an estate in the first place, the size should not make a difference.
Posted by Bonnie Dukowitz at 5:46AM CDT 07/03/15
Escalating land values that are realized later through real estate sales have not had those gains taxed previously. Just as stock or commodity price increases result in tax obligations, it would make sense that land value gain would also.
Posted by Don Thompson at 8:02AM CDT 07/06/15
My family farm estate was built with after tax dollars. Several years ago I purchased farmland for $1,000,000. Put every asset I owned up for collateral to borrow the money. My accountant estimated it will take $2,000,000 in after tax dollars to pay for this farmland. I can't imagine having to pay an additional estate tax. What would incentivize anyone to risk all they have to try and build a farm estate only to be taxed a second time.
Posted by Unknown at 4:54PM CDT 07/06/15

Wednesday 06/24/15

Loss Leaders on Crop Insurance
Just like grocery stores, crop insurance companies seem to run "loss leaders" in the meat department to get your business in the snack aisle. By law, insurers must sell identical multi-peril policies, so offering private riders is one way to differentiate themselves from the crowd.[Read Full Blog Post]
Posted at 2:46PM CDT 06/24/15 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Editor's Note: The original version of this blog referred to an 18% compensation for administration and overhead on federal multiperil policies. An NCIS spokesperson points out that since 2010, the industry has received a flat $1.4 billion (inflation adjusted) annually, not a percentage payment. That does not cover all expenses--such as technology, computer programming and staff training (such as under the new farm bill). For the last 16 years, compensation for administration and overhead has left the industry with a $350 million to $400 million hole every year, NCIS says.
Posted by Marcia Taylor at 2:34PM CDT 06/26/15

Monday 06/22/15

More Help on the Fringes
Finding a dedicated work force is no easy task, especially in states like Nebraska where the latest unemployment rates run 2.7%--and the Dakotas, Minnesota and Iowa, all at 3.8%.[Read Full Blog Post]
Posted at 1:41PM CDT 06/22/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment

Thursday 06/18/15

Guidelines for Family Meetings
When farms were one-man shops, you could carry your hopes, aspirations and business practices in your head. As the scale of farming has grown, we've seen multiple family managers, in-laws and generations involved.[Read Full Blog Post]
Posted at 5:16PM CDT 06/18/15 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Something to be said about those one man shops!!!
Posted by Raymond Simpkins at 11:22PM CDT 06/21/15

Tuesday 06/16/15

Vote of Confidence for ARC
USDA unveiled farmers' elections for the 2014 Farm Bill safety net June 15. Even veteran farm policy watchers were surprised at some of the outcomes--1.76 million farms enrolled (60,000 more than under the direct payment program that expired last year) and a resounding vote of confidence in revenue-based farm support programs instead of "target price" coverage for the first time in history.[Read Full Blog Post]
Posted at 1:52PM CDT 06/16/15 by Marcia Zarley Taylor | Post a Comment
Comments (2)
Would like to recognize & thank the folks @ the University of Illinois for the good work they did (& do)on helping decipher and explain the Farm program. They have been very helpful on many other Farm related matters. ... Thank You & Good Job U of I . From a Purdue grad no less!
Posted by Martin seeds at 10:27AM CDT 06/17/15
Dear Purdue grad, I'd give the University of Illinois (and its team members at Ohio State, Montana and elsewhere) an A+ for effort, too. Their maps help us visualize farm programs in a new way; their calculators were easy enough to navigate for a journalism major who skipped every computer course possible in college. However, I have to give Iowa State University a big kudo for the simple calculator it released today. Iowans can get an up-to-the-minute estimate of their ARC-CO and PLC payments for 2014 and 2015 crops. For example, Boone County, Iowa is now forecast to receive $74.64/corn base acre in 2014 and 2015; no 2014 soybean payments, but $49.02/base acre of soybeans for 2015. If you're in Iowa, it's a great feature. Check it out at http://www.extension.iastate.edu/agdm/articles/plastina/PlaJune15b.html
Posted by MARCIA TAYLOR at 5:42PM CDT 06/18/15

Friday 06/12/15

10 Ways to Skin a Profit
Economists and ag bankers have been making headlines in recent weeks about the need for grain farmers to drastically realign their cost of production for 2016. After talking at length to progressive grain producers from five states last week, I found all were taking that message to heart.[Read Full Blog Post]
Posted at 4:29PM CDT 06/12/15 by Marcia Zarley Taylor | Post a Comment
Comments (3)
I think I read earlier in one of your blogs someone stating that it will be the top 4 percent in terms of land size that will fail in 2016.Some of these guys are leveraged so hard by paying non profitable land prices.Even at $7.00 corn some land sales were out of reach.And, did anyone think the good farm economy would last?? Come on!!! If you did you haven't been farming long.Why are guys reluctant to give up poor ground or any land for that matter?Let someone else lose money on it,before long it will be back on the market.
Posted by Raymond Simpkins at 9:23AM CDT 06/14/15
I noticed in the last paragraph that one farmer "....now hedges commodities earlier than ever for better prices." It's good to see this since after all once all inputs have been scrutinized the best place to make up profits/ground on your competeting neighbors is in the area of doing a better job of marketing. I have tried to convince my family members to do a better job of marketing (forward price by taking advantage of better/higher prices earlier then protecting those earlier/higher prices w/ hedging) for years now w/ no/little avail. But alas, old habits die hard.
Posted by Todd Young at 11:01AM CDT 06/15/15
Is this an article referencing family farming or Big Bus.?? Substitute Tenants? Screw thy neighbor! Thanks a lot.
Posted by Bonnie Dukowitz at 10:54AM CDT 06/16/15

Monday 05/18/15

Leadership the Army Way
Both in the military and in family businesses, you won't necessarily find born leaders. Most people acquire leadership skills through training, practice or at least copying a role model. Given that so many of you worry aboutmotivating the best fromyour workforce, it's worth recounting how Army methods might help improve performance.[Read Full Blog Post]
Posted at 1:44PM CDT 05/18/15 by Marcia Zarley Taylor | Post a Comment
Comments (1)
and also, the job will get done if we don't care who gets the credit
Posted by Wally frey at 7:26AM CDT 05/30/15

Friday 05/15/15

What's New On Brazil's Old Frontier
Fifteen years ago, crop scouts for USDA's Foreign Agricultural Service liked to say you could see the end of the soybean frontier and the beginning of the Amazon Rain Forest from the northern outskirts of Sinop.[Read Full Blog Post]
Posted at 1:53PM CDT 05/15/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment

Tuesday 05/05/15

Cash Rents a Culprit in Credit Defaults?
The first signs of financial stress are hitting the Farm Belt, as DTN's Elizabeth Williams reported this week (see "Credit Begins to Crack" on the Farm Business page http://goo.gl/Hw0jU).[Read Full Blog Post]
Posted at 4:25PM CDT 05/05/15 by Marcia Zarley Taylor | Post a Comment
Comments (8)
cash rent is not the culprit, save your money in the good times and stop blaming the land owner
Posted by Wally frey at 6:00AM CDT 05/06/15
It is hard to feel for either the owner or the renter at ridiculous numbers. Suits to collect, good grief, you can't squeeze blood out of a turnip. It would be interesting to know what per cent of the cropland is represented by the 2% unacceptable loans.
Posted by Bonnie Dukowitz at 7:43AM CDT 05/06/15
While cash rent may not be a culprit for some, it is for others. Some high cash rents came out of "necessity" that someone else was willing to pay more rent and therefore the farmer had to up it or lose it. It's a huge balancing act. However, the landlord has the ultimate power in the situation. He asks for what he wants, and either gets it or finds someone else. I for one would think that as a landowner, I want the best for my ground. If I don't want someone mining my ground or not taking care of it properly because there is no profit for the farm tenant, then I need to be reasonable and lower the rent to a level both parties can find acceptable. Finally, I don't care that corn was $7 in 2012 and you didn't get the top cash rent in the county (I hear this as justification for high cash rents or rental rates increasing). I didn't have corn to sell more than likely. It's why it got that high in the first place.
Posted by Pedro Sanchez at 1:59PM CDT 05/06/15
Pedro,It was not necessity.It is greed! No one twisted your arm to pay big rents. Just sit back and wait.
Posted by Raymond Simpkins at 5:24AM CDT 05/08/15
This country has a cheap food policy that needs thrown in the trash.If a disaster hit earth a tree month supply of grain is not a surplus large supply talkers would have to eat there words cause my bins will be locked. treat others how you been treated not very good.
Posted by andrew mohlman at 8:01AM CDT 05/08/15
Ray, hence my " " around necessity in my comment.
Posted by Pedro Sanchez at 9:18AM CDT 05/11/15
your poor cash flow is not my problem. I need more ground to lower my cost of production.
Posted by Unknown at 9:21PM CDT 05/12/15
To unknown. What are you talking about? An acre is an acre, it cost as much to plant one acre as it does one thousand on a per acre bases. Unless you have to much eqiupment and if you do sell some. If your going to lose or breakeven on what you have than sure sounds like good business to farm more!!!! DAH.
Posted by Raymond Simpkins at 6:58AM CDT 05/13/15

Thursday 04/30/15

End Family Silence
Forget giving your family members and business partners the silent treatment. DTN's family business adviser, Lance Woodbury with Ag Progress in Garden City, Kansas, tackles the "avoidance instinct" in his current DTN column: In other words, how can we get family business owners to overcome their natural reluctance to lay out a path for transition.[Read Full Blog Post]
Posted at 2:35PM CDT 04/30/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment

Thursday 04/23/15

Track Iowa's Field of Dreams
The bloom is coming off Corn Belt farm real estate, and that's just fine with buyers like 70-year-old Tony Kriegel of Brooklyn, Iowa. He views farmland as a long-term investment, something he hopes his 12 children will never sell.[Read Full Blog Post]
Posted at 11:06AM CDT 04/23/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment

Monday 04/20/15

Beware False Hopes on Estate Taxes
The rally cry of "death to estate taxes" won a symbolic vote in the U.S. House of Representatives last week, but few tax practitioners are taking the move seriously. In fact, some caution that House passage of the Death Tax Repeal Act of 2015 will only give farmers and family business owners reason to procrastinate.[Read Full Blog Post]
Posted at 12:11PM CDT 04/20/15 by Marcia Zarley Taylor | Post a Comment
Comments (1)
I am not commenting on the virtue of the law for wealth accumulation, but strictly from a different perspective. I think that Kevin Bearley hit the issue on the head. Right now, most people procrastinate or put off doing anything. If this bill were to pass as is, it would only cement that process, and for the most part, no one would need to do any life estate planning except for a few thousand. I think that you would see land sales dry up completely unless someone needed cash for something, as in my humble opinion, no one would sell and pay the capital gain tax, because they will just hold it in the family until Mom/Dad or both pass away. They then get the stepped up basis to sell and pay no tax. This doesn't even bring into consideration depreciable assets that would potentially be allowed to wait until death to step up and avoid paying any tax on it at all. This law could potentially wipe out an entire generation of decision makers because the elders will hold all the assets until death.
Posted by Pedro Sanchez at 9:42AM CDT 04/21/15

Tuesday 03/31/15

Breaking Up Is Hard to Do
No subject seems to trouble families more than splitting a partnership apart. One brother I know agonized for years about ending a business relationship with his alcoholic sibling. He felt obligated to be his brother's keeper.[Read Full Blog Post]
Posted at 3:31PM CDT 03/31/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment

Friday 03/27/15

More War Wounds for a Corn Contender
Just a few years ago, Ukraine boasted some of the world's most profitable grain farms. Institutional-scale agribusinesses--some approaching 1 million acres-- accounted for more than 25% of the Former Soviet Union's output.[Read Full Blog Post]
Posted at 1:25PM CDT 03/27/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment

Thursday 03/26/15

War Takes Toll on Ukrainian Farmers
Once dubbed the "Grain OPEC," Black Sea corn, wheat and soybean production now feels the effect of a currency collapse and 30% inflation.[Read Full Blog Post]
Posted at 10:44AM CDT 03/26/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment
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Recent Blog Posts
  • Story Book Endings for Estate Taxes
  • Loss Leaders on Crop Insurance
  • More Help on the Fringes
  • Guidelines for Family Meetings
  • Vote of Confidence for ARC
  • 10 Ways to Skin a Profit
  • Leadership the Army Way
  • What's New On Brazil's Old Frontier
  • Cash Rents a Culprit in Credit Defaults?
  • End Family Silence
  • Track Iowa's Field of Dreams
  • Beware False Hopes on Estate Taxes
  • Breaking Up Is Hard to Do
  • More War Wounds for a Corn Contender
  • War Takes Toll on Ukrainian Farmers
  • How Do I Calculate My County ARC Payouts?
  • Farm Program's Last-Minute Decisions
  • Bring Down the Shout in Family Conflict
  • Truth Serum for Land Values
  • Farm Bill's Black Boxes Make Improbable Possible