Wednesday, September 19, 2012
Premature Corn Kernel Sprouting (aka. Vivipary)
Vivipary, the premature germination or sprouting of corn kernels on the cob prior to harvest, is not a common problem in Indiana but sometimes can be serious enough to warrant attention from growers. Technically, the fact that corn kernels have the ability to germinate and develop into seedlings is not odd. Yet, when such sprouting occurs while immature or mature kernels are still attached to the cob, we consider it odd and assign a fancy name to it to reinforce the fact that we consider it odd. On the rare occasion when viviparous germination occurs throughout a field to a large enough degree, overall grain quality can deteriorate enough to cause problems with drying and storage of grain. Another consequence is the potential increase in the percentage of "broken corn and foreign material" in affected grain delivered to the elevator that may result in significant grain price discounts to the grower. <Read More>
Tuesday, September 18, 2012
New Aspergillus Ear Rot Brochure
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| Aspergillus Ear Rot (Purdue University/Woloshuk) |
Weekly Outlook - Early Corn Harvest and September 1 Stocks
A larger percentage of the U.S. corn grain acreage was harvested in August this year than is typically the case. The availability of large new crop corn supplies during the last month of the previous marketing year makes it more difficult to anticipate the magnitude of old crop stocks on September 1.
According to the USDA’s weekly Crop Progress report, 6 percent of the corn acreage in the 18 major producing states was harvested as of August 26 and 10 percent was harvested as of September 2, implying about 9 percent of the acreage was harvested by the end of August. Harvest progress by the end of August last year, and the average for the previous 5 years, was about 2.5 percent. If the average yield of the harvested acreage this year was near the average of 122.8 bushels forecast for the U.S, then about 965 million bushels were likely harvested in August, compared to about 310 million bushels likely harvested in August last year. <Read More>
In the Grow - Q & A
Q. We have had the pictured vine above our sink since 1977. It has never
bloomed in all that time - until this spring. It bloomed for the very first
time. We don't know the name of the vine and would like to know. Our daughter
told us it is a common vine. What can you tell us? A. Wax plant, known botanically as Hoya carnosa, is a popular, easy-to-grow houseplant. This vigorous, twining vine may take years before it is mature enough to bloom, but once it does, it often continues blooming for months. Wax plant performs best in bright light with a well-drained soil mix that is allowed to dry a bit between waterings. This species seems to prefer being a bit pot-bound, so don't be in too much of a hurry to repot, even if it seems overgrown for its container.
Q. I have a question about cedar and bark and any wood chips for mulch. Will these chips attract termites?
A. Mulch of any kind can create a stable, moist habitat favorable to termites, so if termites are already in the area, or happen to wander into the area, you might see them in or under the mulch while they forage. <Read More>
Wednesday, September 5, 2012
Drought and Tax Tips
George Patrick, Purdue Extension Agricultural Economics Specialist
CROP INSURANCE INDEMNITIES: SOME TAX TIPS
General Rule: Crop insurance indemnities are generally included in income of the year in which the indemnities are received.
Major Exception: A producer may elect to defer reporting the indemnities as income when received if the producer can show that the damaged crop would normally have been sold in the year following the year of production.
This election to defer reporting indemnities applies to all of the crops for which crop insurance indemnities and disaster payments (if any) were received. A previous 3-year average of more than 50% of the crops affected by the election being sold in the year following the year of production would probably be sufficient to document normal business practice of a producer.
Only indemnities due to physical losses of production are eligible for deferral. Given the increases in corn and soybean prices from planting to harvest in 2012, the 2012 indemnities will be due entirely to physical losses. Indemnities paid by county-basis group insurance are not be eligible for deferral became there is no direct relationship between the indemnity and an individual producer’s yield.
Indemnities cannot be reported as income before they are actually or constructively received. An indemnity received in 2013 for a 2012 crop is reported an income in 2013 regardless of when the producer normally sells the crop. This may cause problems for producers wanting to include indemnities in their income for 2012,
Given the very large number of claims in 2012, there may be significant increase in the time needed to process a claim. The crop insurance agent may be able to indicate the likely time needed for processing. Checking information carefully in claim preparation helps avoid delays in processing.
Expected 2012 insurance claims of over $200,000 require a 3-year audit before this year’s claim can be paid. Help your insurance agent start the audit process as soon as possible and be sure settlement sheets are available.
Be aware of possible Aflatoxin contamination in corn. Crop insurance coverage ends at harvest and does not cover losses in storage. Check and have testing donet, if necessary, before harvest.
Producers should have alternative tax management strategies ready to be implemented depending on when the insurance indemnity is paid.
For further information see IRS Pub. 225,”The Farmer’s Tax Guide,” or contact your tax advisor.
LIVESTOCK PRODUCERS: SOME INCOME TAX TIPS
Many livestock producers are reducing their livestock enterprises because of a lack of forages and high grain prices due to drought. Special federal income tax provisions are intended to reduce impact of distressed sales of livestock in “excess” of normal.
1. I.R.C. § 451(e) allows postponement of the reporting of taxable gains on the sale of additional livestock.
2. I.R.C. § 1033(e) allows the avoidance of paying taxes on the gain realized from the sale of breeding, draft or dairy animals if they are replaced within a specified time period.
Postponement of Reporting Income
Postponement of reporting income from weather-caused sale of livestock may be available to cash basis taxpayers whose principal trade or business is farming and who are located in an area designated as eligible for federal disaster assistance. Sales in excess of a farmer’s normal business practice can be deferred until the animals normally would have been sold.
Example 1. Bill is a cow-calf producer who normally carries his calves over and sells them as yearlings. Because of the drought in 2012 and the lack of forage, Bill sells his 2012 calves in October 2012. Bill could postpone reporting the income from the 2012 calves until 2013.
Example 2. Jane normally raises and sells market hogs. Because of the drought in 2012, Jane sells 1,000 head as feeder pigs in 2012 rather than feed them to market weight and sells them in 2013 as she would do as her normal business practice. Jane could elect to defer reporting the sales proceeds until 2013.
Sale with Replacement Intended
A producer may reduce the size of the herd by selling livestock because of the lack of pasture and forages and plan to reinvest when conditions improve. Reporting the gain realized can be postponed if the livestock are replaced. Only the gain on livestock sold in excess of normal sales can be deferred. If the animals are not replaced, an amended return for the year of sale must be filed. However, producers do have some flexibility on the time and type of replacement property.
Example 3. Jack normally culls 15 of his 100 beef cows annually. Because of the drought in 2012, Jack sells 75 of his cows for a gain of $500 per cow. Jack can elect to not report the gain on 60 cows. If Jack does not reinvest at least $500 in 60 cows by the end of the reinvestment period, generally 2 years, Jack would need to file an amended return for 2012.
For further information, see IRS Pub. 225, The Farmer’s Tax Guide, or contact your tax advisor.
CROP INSURANCE INDEMNITIES: SOME TAX TIPS
General Rule: Crop insurance indemnities are generally included in income of the year in which the indemnities are received.
Major Exception: A producer may elect to defer reporting the indemnities as income when received if the producer can show that the damaged crop would normally have been sold in the year following the year of production.
This election to defer reporting indemnities applies to all of the crops for which crop insurance indemnities and disaster payments (if any) were received. A previous 3-year average of more than 50% of the crops affected by the election being sold in the year following the year of production would probably be sufficient to document normal business practice of a producer.
Only indemnities due to physical losses of production are eligible for deferral. Given the increases in corn and soybean prices from planting to harvest in 2012, the 2012 indemnities will be due entirely to physical losses. Indemnities paid by county-basis group insurance are not be eligible for deferral became there is no direct relationship between the indemnity and an individual producer’s yield.
Indemnities cannot be reported as income before they are actually or constructively received. An indemnity received in 2013 for a 2012 crop is reported an income in 2013 regardless of when the producer normally sells the crop. This may cause problems for producers wanting to include indemnities in their income for 2012,
Given the very large number of claims in 2012, there may be significant increase in the time needed to process a claim. The crop insurance agent may be able to indicate the likely time needed for processing. Checking information carefully in claim preparation helps avoid delays in processing.
Expected 2012 insurance claims of over $200,000 require a 3-year audit before this year’s claim can be paid. Help your insurance agent start the audit process as soon as possible and be sure settlement sheets are available.
Be aware of possible Aflatoxin contamination in corn. Crop insurance coverage ends at harvest and does not cover losses in storage. Check and have testing donet, if necessary, before harvest.
Producers should have alternative tax management strategies ready to be implemented depending on when the insurance indemnity is paid.
For further information see IRS Pub. 225,”The Farmer’s Tax Guide,” or contact your tax advisor.
LIVESTOCK PRODUCERS: SOME INCOME TAX TIPS
Many livestock producers are reducing their livestock enterprises because of a lack of forages and high grain prices due to drought. Special federal income tax provisions are intended to reduce impact of distressed sales of livestock in “excess” of normal.
1. I.R.C. § 451(e) allows postponement of the reporting of taxable gains on the sale of additional livestock.
2. I.R.C. § 1033(e) allows the avoidance of paying taxes on the gain realized from the sale of breeding, draft or dairy animals if they are replaced within a specified time period.
Postponement of Reporting Income
Postponement of reporting income from weather-caused sale of livestock may be available to cash basis taxpayers whose principal trade or business is farming and who are located in an area designated as eligible for federal disaster assistance. Sales in excess of a farmer’s normal business practice can be deferred until the animals normally would have been sold.
Example 1. Bill is a cow-calf producer who normally carries his calves over and sells them as yearlings. Because of the drought in 2012 and the lack of forage, Bill sells his 2012 calves in October 2012. Bill could postpone reporting the income from the 2012 calves until 2013.
Example 2. Jane normally raises and sells market hogs. Because of the drought in 2012, Jane sells 1,000 head as feeder pigs in 2012 rather than feed them to market weight and sells them in 2013 as she would do as her normal business practice. Jane could elect to defer reporting the sales proceeds until 2013.
Sale with Replacement Intended
A producer may reduce the size of the herd by selling livestock because of the lack of pasture and forages and plan to reinvest when conditions improve. Reporting the gain realized can be postponed if the livestock are replaced. Only the gain on livestock sold in excess of normal sales can be deferred. If the animals are not replaced, an amended return for the year of sale must be filed. However, producers do have some flexibility on the time and type of replacement property.
Example 3. Jack normally culls 15 of his 100 beef cows annually. Because of the drought in 2012, Jack sells 75 of his cows for a gain of $500 per cow. Jack can elect to not report the gain on 60 cows. If Jack does not reinvest at least $500 in 60 cows by the end of the reinvestment period, generally 2 years, Jack would need to file an amended return for 2012.
For further information, see IRS Pub. 225, The Farmer’s Tax Guide, or contact your tax advisor.
Weekly Outlook - Questions about Corn Acreage
The pace of consumption of U.S. corn has been slowing, as
evidenced by small weekly exports and export sales, smaller weekly estimates of
ethanol production, declining cattle feedlot placements, and increased slaughter
of dairy cows and the hog breeding herd. The extent of rationing required in
the current marketing year that has just begun, however, is still not clear
since the size of the 2012 crop is not yet known.
The average U.S. corn yield will obviously be the most
important factor in determining crop size, but the magnitude of acreage
harvested for grain will also influence crop size. The likely magnitude of
harvested acreage starts with the magnitude of planted acres. The USDA’s
National Agricultural Statistics Service (NASS) June Acreage report
estimated corn acreage planted for all purposes this year at 96.4 million
acres. History suggests that the final acreage estimate will deviate, at least
slightly, from this estimate. In the previous 10 years, for example, the final
estimate of planted acres deviated by as little as 37,000 to as much as 1.345
million acres from the June estimate. <Read More>
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