Upcoming Events - Farm Succession Planning & Perry-Spencer Crop Day

Farm Succession Planning Series

Family farmers can get tips from Purdue University specialists on business communication and dealing with accounting and legal issues during a succession planning program offered at 10 sites in Indiana.

“Cultivating Strong Indiana Farm Family Relationships for Today and Tomorrow” will be offered in early 2013. The program is presented by Purdue’s Women in Agriculture and Farm Succession Planning teams in partnership with the North Central Risk Management Education Center.

Kelly Heckaman, Purdue Extension educator in Kosciusko County, said Indiana farmers and farm wives have asked educators for advice on handling their family businesses.

“In order to get estate planning started in families, they need to be able to communicate about it. And it’s an emotional topic, so it can be hard to get those conversations started,” Heckaman said. “The workshops will give families ideas on improving their conversations and skills to help them work through their problems and keep their families intact.”

Heckaman said the program is a collaboration between Extension and local communities, as organizers will invite local accountants and attorneys to speak on financial strategies. 

The first-session agenda topics are: “A Great Year to Farm: New Farmer Financial Skills,” “The Team Approach: Working Together Through Transition” and “Communicating for Success.”

The second session’s lineup is “Business Structure and Taxes,” “The Truth about Pre- and Post-Nuptial Agreements” and “Managing Conflict.”

Registration is $50 for individuals or $100 for families up to four members. Locally, the program will be offered at the Vanderburgh Co. 4-H Fairgrounds, 201 E. Boonville New Harmony Road, Evansville, on February 19 and 26, from 8:00 AM-12:00 PM CST. 

For more information, please contact Purdue Extension-Spencer County at (812) 649-6022 or nheld@purdue.edu.   Registration brochures are available online. 


Perry-Spencer Crop Day

The annual Perry-Spencer Crop Day program will be held Thursday, February 21 at 6:00 PM CST at the Fulda Sportsman Club. The program will feature Dr. Chuck Mansfield, Purdue Extension Agronomist, speaking on “Wheat Nutrient Management and Drought Effects on Soil Nitrogen”. The program will also feature an update on new fertilizer application regulations affecting farmers. 

The cost to attend is $5.00 per person, including the meal, and is payable at the door; however pre-registration is requested by February 14. PARP and CCH credit is available for an additional $10 fee. Two CCH credits will be available in categories 1, 14, and RT. 

For more information, or to register, please contact Purdue Extension-Spencer County at (812) 649-6022 or nheld@purdue.edu.

2012 Purdue Custom Farming Rate Survey Now Available

As you may recall, a year ago I posted information on the new process of developing the Purdue custom farming rate publication, EC-130 - Indiana Farm Custom Rates.  A new custom rate survey had been developed and was being distributed to farmers throughout the state via Extension-sponsored events.  The intent was to improve the quantity and quality of the data and improve the publication, with the hope of updating it each year.  Well, the effort was successful - 272 responses were received from 36 Indiana counties - and the new custom rate survey was released in early-2012. 

The data collection has begun for the 2013 publication and the new survey is available.  If you do custom work or hire custom work done on your farm and would be willing share the rates you charge and/or pay, please consider filling out the survey.  All data collected is voluntary and anonymous.  See the link below for the survey:

2012 Purdue Custom Farming Rate Survey 


            

Upcoming Event - Ohio Valley Precision Ag Conference

Purdue Extension and University of Kentucky Extension will jointly host a Nov. 29 conference to teach farmers more about how precision agriculture systems could improve their bottom lines.

The Ohio Valley Precision Ag Conference will run from 9 a.m. to 2:30 p.m. (CST) at the Vanderburgh County 4-H Fairgrounds, 201 E. Boonville-New Harmony Road, Evansville. It will cover data management, implement systems technologies, and systems calibration and setup. It also will feature local precision agriculture companies and projects.

 

"The variety of technologies that farmers and industry representatives have to evaluate for on-farm use is staggering," said Kenneth Eck, Purdue Extension educator in Dubois County. "This conference will give folks a better understanding of what systems are available, how emerging technologies might mesh with producers' current systems, and how both farmers and agribusinesses can manage farm data for improved economic and environmental results."

 

The conference will start with a presentation titled "Data Utilization and Management with Precision Tools" by Betsy Bower and Troy Walker of Ceres Solutions.

 

Morning breakout sessions are:

• "RTK Accuracy" by Tim Stombaugh, associate professor of biosystems and agricultural engineering at the University of Kentucky.
• "Calibration Basics - John Deere" by Ben Carlisle, Wright-Stemle John Deere.
• "Variable Rate Seeding - Can You Do It and Do You Need To?" by Bob Nielsen, Purdue     Extension agronomist.

Afternoon breakout sessions are:

• A repeat of Stombaugh's "RTK Accuracy."
• "Calibration Basics – Trimble/Case IH" by Kevin Roy and Kristina Nadin, Hopf Equipment Case IH.
• "Economics of Investing or Upgrading: Old vs. New" by Greg Halich, associate Extension professor of agricultural economics at the University of Kentucky.

The conference also will feature a farmer panel discussion titled "What Do We Do With the Data and How is It Managed?" The keynote presentation will be "Precision Planting" by Gregg Sauder of Precision Planting Inc.

 

"This is the first time we've pulled together a program with so much of our expertise in one place," Eck said.

 

Conference registration is free, but reservations are required by Nov. 19. Participants can register online at http://tinyurl.com/pukyregister or by contacting any of the sponsoring Purdue Extension or University of Kentucky Extension county offices. Those counties in Indiana are Daviess, Dubois, Knox, Perry, Pike, Posey, Spencer, Vanderburgh and Warrick. In Kentucky they are Daviess, Henderson, McLean, Ohio, Union and Webster.

 

A flyer for the program is available here.

Consider Legalities when Terminating, Renegotiating Farmland Leases

Jennifer Stewart, Purdue Agricultural Communications

 

As the end of grain harvest draws near, many landlords and tenants will be renegotiating or terminating farmland lease agreements - a process full of legal requirements, a Purdue Extension agricultural economist warns.

 

First and foremost, lease agreements and terminations should be in writing. While oral farmland lease agreements are as legal as written leases in Indiana, Gerry Harrison said some details of the oral agreement might be disputed.

 

"Oral leases should be avoided," he said. "There are many problems with oral leases, including what is or was the actual agreement."

 

Earlier this year, the Indiana Court of Appeals ruled that a lease termination is required to be in writing, which protects both landlord and tenant.

 

"It could be very risky to rely on an oral notice to terminate a lease," Harrison said. "Further, if a new leasing arrangement is needed with the existing tenant and a lease agreement does not come, the tenant, without a proper notice to quit, likely has the land for the coming year at the same rent or arrangement as the current year."

 

Indiana law also requires that a notice to quit, or terminate, a lease needs to be delivered by a landlord or tenant in a timely manner. For a lease of at least a year, law requires notice to be delivered three months before the end of the lease year.

 

If a lease doesn't specify the lease-year end, Harrison said it's customary in Indiana to consider the end of February of the coming crop year as the lease-year end.

 

"Farming is a continuous process. If there is to be a new tenant, the current tenant needs to plan for the transition, and the new tenant would likely want to start preparations for the coming crop year during the late summer or the fall of a current crop year," he said.

 

For landlords and tenants who are renegotiating lease agreements, Harrison said it's important for both parties to have an understanding of the farmland's rental value.

 

"Landlords must recognize the difference in the rental value of varying farmland parcels as to size in acres and quality of the land," he said. "While crop farming has been quite profitable in recent years, an oddly shaped 30 acres is not likely to be as desirable to a tenant as a very fertile 300-acre parcel."

Some lease renegotiations might require professional help to draft an appropriate rental agreement.

Harrison prepared an in-depth look at farmland lease renegotiations and terminations titled "Indiana Farmland Leases - Key Considerations and Laws." It's available by emailing him at harrisog@purdue.edu.

 

More information about farmland leases also is available in Harrison's free Purdue ExtensionPublication, "Legal Aspects of Indiana Farmland Leases and Federal Tax Considerations," which is available for download at http://www.extension.purdue.edu/extmedia/EC/EC-713.pdf

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.

Upcoming Events - Livestock and Forage Drought Management Update

The drought of 2012 has presented some unique challenges to livestock producers with regards to forage supplies and pasture condition. Purdue Extension of Dubois, Perry, Spencer, and Warrick Counties is presenting a Livestock and Forage Drought Management Update to discuss these challenges and identify management tips for this year and beyond. Specific topics include Utilizing Alternative Feeds and Forages, Forage Nitrate and Nutrient Testing, Herd Management and Feeding Techniques, and Pasture Renovation. Featured speakers will include Dr. Keith Johnson, Purdue Extension Forage Specialist and Dr. Ron Lemenager, Purdue Extension Beef Specialist.

The update will be held August 16 at 6:30 PM CDT at the St. Meinrad Community Center. The update is free-of-charge but pre-registration is requested by August 13. For more information, or to register, please contact the Spencer County Purdue Extension Office at (812) 649-6022 or nheld@purdue.edu.

Purdue Extension Drought Press Conference

On July 5, Purdue Extension held a drought press conference at the Indiana State Fairgrounds.  Extension Specialists and Educators addressed a variety of drought-related topics and answered questions from media.  To view the press conference, please see the video link below:

A news release highlighting the topics of discussion at the press conference is also available here.

Indiana Pesticide Clean Sweep Project

Again this year, the Office of the Indiana State Chemist's Pestcide Clean Sweep Project is offering pick-up locations around the state.  The project is designed to collect and dispose of suspended, canceled, banned, usuable, opened, unopened, or unwanted pestcide products.  These include weed killers, insecticides, rodenticides, fungicides, miticides, etc.  The pick-ups are intended for public and private schools, golf courses, nurseries, farmers, agricultural retailers, and municipalities.   

Locally, the pick-up location will be held August 9, 2012 at the Dubois County Fairgrounds just north of Bretzville, IN on SR 162, from 9:00 AM to 3:00 PM EDT.

Participants are asked to complete and submit a planning form no later than Monday, July 30 in order to participate.  Pick-up locations may be canceled if there is not enough demand, so it is important to submit the planning form prior to attending. 

For more information, please see the flyer and planning form located on the OISC website or call (765) 494-1492.   

2012 Purdue Custom Farming Rate Publication is Here!

Back in January I mentioned the new Purdue custom farming rate survey and asked local producers to consider filling it out to help expand the data pool and improve the Purdue Custom Farming Rate publication, EC-130-W.  Well, the surveys have been collected, the data has been compiled, and a new custom rate publication has been written and is now available.  Thanks to the help of 272 farmers, farm owners, professional farm managers, and custom farm operaters from across Indiana, we now have an improved and expanded publication.  Thanks again to all those who responded to the survey.  The new publication is available for download at the link below:

2012 Indiana Farm Custom Rates

Farmers Being Targeted by Phony USDA Requests

Farmers around the nation, including some in Indiana, have recently been targets of a scam in which they are being contacted via mail or in-person visits by someone who claims to be a USDA official and requests personal and financial information.  More information on what to look out for and how to tell between phony and authentic USDA contacts, see the recent article from Hoosier Ag Today. 

Purdue On-Farm Research Opportunities

Over the years, Spencer County has been the site of many field crop research efforts and variety trials, including the wheat variety plot, one of just three Extension-sponsored wheat plots in the state, the soybean cyst plots of years past, and various industry-sponsored research.



Planting Spencer Co. corn seeding rate
trial in 2010



In recent years, Purdue Extension has renewed its focus towards on-farm research. These new research efforts involve full-scale, field-sized research trials in which producers around the state collaborate with local educators and state specialists and host the trials.

On-farm research not only seeks to identify answers to important questions but may also serve to validate previously discovered answers or convince growers that an alternative crop management practice is profitable for their own situations.

Current on-farm research efforts include:
     1) Seeding rate trials in corn and soybeans

     2) Evaluating early-applied foliar fungicides in corn

     3) Nitrogen rate trials in corn

     4) Soybean fungicide efficacy trials in soybeans.

The efforts require very little extra effort on the part of collaborators beyond normal field operations.

We are currently looking for Spencer County producers who are interested in serving as collaborators in any of these research efforts.

Additional information on the five research efforts can be found at the On-Farm Research website.  If you are interested in participating in one of these projects or would like more information, please contact the Extension Office at (812) 649-6022 or nheld@purdue.edu.

New Purdue Custom Farming Rate Survey

The Purdue Custom Rate publication, EC-130, which lists average custom farming rates in Indiana, is one of the most requested Purdue Extension publications in Spencer County and around the state. However, as anyone who uses the custom rate report knows, it is far from perfect. For one, it is only updated every four to five years and as a result, it does not always accurately reflect changes in the current economic climate, such as changes in commodity or fuel prices.

Second, it contains a limited number of field operations, especially when compared to similar reports from Iowa State or Ohio State, and does not always provide all the information producers are seeking. Both of these problems are due, at least in part, to the data collection method and its very limited reach.

To address these problems, the data collection has been changed significantly for the 2012 report. In the past, the survey was a part of NASS surveys and reached only a couple hundred producers, leaving many items on the survey with little or no response. The custom rate survey is now available to any producer in the state who either does or hires custom work or otherwise has knowledge of custom work rates.

Locally, the survey will be available at upcoming events, such as PARP sessions, Crop Day, and Corn and Soybean Day. The survey is also available at the Extension Office and is posted on the Purdue Extension-Spencer County website under the “Hot Topics” section.

If you are involved with any type of custom work, I hope you will consider filling out the survey to help improve and expand this important resource.

Upcoming Events - Conference to Focus on Midwestern Farm Women

The annual Midwest Women in Agriculture conference should help attendees develop new ideas and perspectives on agriculture to take home to their communities.

The conference will be Feb. 29 to March 1 at the Shipshewana Town Center, 760 S. Van Buren St., Shipshewana, Ind.

"We have returning speakers from last year's conference along with new, exciting speakers that should make for a fun time," said Purdue University Extension educator Elysia Berry, a conference organizer. "Attendees vary from those in agricultural professions to those who have been involved in farming their whole lives, to those just getting started, and there is much to learn for all."

One of this year's keynote speeches is aimed toward women who are searching for living their legacies. In her speech "Bury Me With My Pearls," professional speaker Jane Herlog uses a pearl analogy - cultured, uncultured and the power of the seed pearls - to empower women to handle business and personal challenges with grace and humor.

The other keynote speaker, Pam Boocher, senior marketing associate from Elanco, will explore the benefits of modern, efficient technology used in food production in her speech "What Consumers Want: Technology Fighting for a Change to Feed the World."

Other topics covered at the conference will include farm marketing, estate basics, grain bin safety, depression in women and couponing.

The conference fee is $80 for one day or $90 for both if registered before Feb. 15. After Feb. 15, the cost is $115 for one day or $140 for both days. The fee includes lunch on both days and dinner the first evening. Lodging is not included in the registration fee.

There will be a hotel room block available for conference attendees at Amish Country Inn, 800 S. Van Buren St., Shipshewana, 260-765-7688. To receive the conference rate, reservations must be made by Feb. 15.

To register or for more information, visit the Purdue University Women in Agriculture website. 


Farm Tax Management Webinar Link Now Available

The link to the recorded version of the Income Tax Management for Farmers in 2011 webinar is now available.  If you missed the live version or would like to view all or part of it again, it is available at https://gomeet.itap.purdue.edu/p78322489/.   The program can be viewed on any computer with high-speed internet access.  Reference material cited in the presentation is available for download at http://www.agecon.purdue.edu/extension/programs/tax_planning.asp. 

Upcoming Events - Farm Tax Management Webinar

Farmers preparing for income tax season will have an additional resource to help them sort through tax codes and changes when Purdue Extension offers a free webinar Dec. 6.

Income Tax Management for Farmers in 2011 will run 8:00-10:00 AM CST and is open to interested farmers. Participants will have the opportunity to interact with presenters and ask questions.

"Farmers need to determine year-to-date receipts and expenses for 2011 while there is still time to make adjustments for the calendar year," said George Patrick, Purdue Extension agricultural economist. "The webinar also will address after-the-end-of-the-year tax alternatives."

Those who derive at least two-thirds of their gross income from farming can file their income taxes by March 1 without having to worry about making estimated tax payments, Patrick said.

He and David Frette, a certified public accountant who works largely with farmers, will lead the webinar.

Some topics include deferred income from sales, prepaid expenses, farm income averaging, crop insurance, casualty losses, self-employment tax updates and tax management.

To participate, go to https://gomeet.itap.purdue.edu/tax/ approximately 10-15 minutes prior to the start time and log in as "Guest".  A high-speed internet connection is required. 

**Note: For those unable to view the program live, it will be recorded for later viewing.  The link to the recorded version will be posted on the Gazette as soon as it is available** 

Conservation Easements Offer Way to Keep Land for Farming

Landowners who want to ensure that their farmland will be farmed for generations to come can consider a conservation easement to limit its future development even if they later sell the land.

A conservation easement is a voluntary agreement between a landowner and a land trust, a private, nonprofit organization that works to conserve the land. In this type of agreement, the landowner "gifts" the conservation easement to the land trust. The landowner, in turn, benefits from federal income tax deductions.

"Granting a conservation easement means the development rights for the land have been transferred, by a deed, to an organization qualified under Section 501(c)(3) of the Internal Revenue Code, such as a land trust," said Gerry Harrison, Purdue Extension agricultural economist. "The organization holding the easement has the responsibility to see that the land is not developed for other than the landowner's retained purposes, such as agricultural production or perhaps some limited structures such as a homestead." <Read More>

Upcoming Events - "Income Tax Management for Farmers" Webinar

Each year, Purdue Extension and the Purdue Agricultural Economics Department offers Income Tax Management for Farmers, a program covering recent tax law changes and their implications for farmers, farm families, and farm businesses.  As in recent years, the program will be offered as a webinar and will be accessible from anywhere with a high-speed internet connection.  The program is free-of-charge and will be held on December 6 from 8:00-10:00 AM CST.

To view the program remotely, go to https://gomeet.itap.purdue.edu/tax approximately 5-10 minutes prior to the start time and sign in as "Guest".  If you are unable to view the program live, it will be recorded and archived for later viewing.  The link to the recorded program will be posted on the Gazette as soon as it is available.  You may also email me at nheld@purdue.edu for the archived link.