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Articles from 2011 In December


Corn+Soybean Digest

Farm Equipment: Sure Don't Make 'Em Like They Used To--Part II

 

Here's round two of old farming equipment Digital Editor came across at her grandparents' farm recently. From another Allis tractor to an old Gleaner Six hopper to a McCormick grain drill, there's no shortage of vintage equipment at the Johnson farm in south-central Minnesota. Do you have some old equipment in the back 40? Email us your photos and we'll post them here! Send them to csd@csdigest.com.

Reinventing herbicides to benefit specialty crops

Reinventing herbicides to benefit specialty crops

University of Arizona (UA) weed specialist Barry Tickes is a modern day Maytag appliance repairman of sorts.

The Maytag repairman featured in 1970s television commercials lacked enough work due to Maytag’s product claims of high dependability and infrequent appliance breakdowns.

Likewise, Tickes eagerly awaits new herbicide formulas for specialty crops, but the wait is long. New herbicide product introductions are rare for the specialty crop industry.

A key reason is the price to bring a pesticide to market. Costs to a chemical company to bring a pesticide from concept to market can take 10 years with a price tag of several hundred million dollars.

Due to these high costs, chemical companies are utilizing technology to reinvent older herbicides introduced up to 50 years ago. Companies and weed researchers are developing new uses for older herbicides, plus generating new product formulations and application techniques.

Tickes is a UA area Extension agent based at the Yuma Agricultural Center in Yuma, Ariz. He is busier than ever testing these new herbicide products to bring potential weed solutions to growers.

“Some older products have been around for 40 to 50 years. This is a testament to their value rather than just being old and obsolete,” Tickes told farmers, pest control advisers, and industry representatives at the 2011 Fall Desert Crops Workshop held in El Centro, Calif., in November.

The workshop was conducted by the University of California Cooperative Extension (UCCE), Imperial County, and by the UA Extension Service, Yuma County. Western Farm Press sponsored the workshop.

High product development costs also mean chemical companies are investing more existing pesticide research and research (R&D) dollars where the most revenue can be generated — in other words spending a larger chunk of the R&D budget on products for larger acreage crops.

Today, U.S. crop production includes about 86 million acres of field corn, 75 million acres of soybeans, 55 million acres of wheat, 21 million acres of alfalfa, and 9-plus million acres of cotton.

These gargantuan numbers dwarf specialty crop acreage which includes 151,000 acres of head lettuce and 37,000 acres each of spinach and cauliflower.

Today, 60-plus herbicides are registered for weed control in field corn and soybeans. More than 20 herbicides help prevent weeds in cotton. Fewer than 10 herbicides are registered for cole crops, lettuce, melons, and spinach.

“Companies are in business to develop new products and make money but they have to pay the bills,” Tickes explained. “There is a lot more money to be made in a corn crop with 90 million acres compared to 37,000 acres of spinach.”

Herbicide reliance

Despite fewer herbicides on the market, specialty crop growers rely heavily on herbicides. Produce buyers expect fields to be absent of weeds and damage from pests and diseases. Accordingly, growers utilize pesticides to grow near-perfect fields to ensure crop salability at a good price.

“One weed will not reduce the yield or quality of the crop, but one weed can change the attitude of a shipper about a particular field and grower,” Tickes said. “Disease- or insect-caused spots on spinach, for example, can result in a major price discount to the grower. Occasionally, a field with a very low level of injury is not harvested.”

Some herbicides applied on more traditional crops are now finding a good weed control fit in specialty crops.

For example, the herbicide Stinger (clopyralid), registered more than three decades old, was developed to control weeds in grain crops. In recent years, Stinger was approved for cole crops with positive results.

In one of Tickes’ herbicide field trials, Stinger was applied in broccoli to measure product effectiveness.

“Stinger has a good fit with excellent crop safety,” Tickes said. “Stinger did a remarkable job of saving the broccoli crop.”

Another example is the herbicide Sandia (halosulfuron), originally developed for nutsedge control in turf. Sandia was acquired by the Gowan Company in Yuma to develop a fit in specialty crops. Tickes’ test drove Sandia in a trial on the weed purslane in 10 different types of melons. Sandia performed well when the product was applied prior to weed emergence.

In Tickes’ spinach trial, the product Far-Go (trialate) did a good job controlling winter annual grasses.

In California, Tickes said UCCE farm advisors and weed specialists Richard Smith and Steve Fennimore have tested low rates of the herbicide Lorox applied as a pre-emergent in spinach to control annual broadleaf weeds.

“The overall crop safety is not real good, but they haven’t given up on it,” Tickes explained. “They believe they’ll find a rate that will be safe and effective.”

The herbicide Prowl, originally registered in the 1970s, is primarily used today on legumes, cotton, alfalfa, trees, and vines. Tickes says Prowl performed well on nettleleaf goosefoot and canarygrass in a broccoli trial.

Environmental safety concerns

In addition to new uses for older herbicides, changes in product formulations are occurring largely in response to environmental safety concerns. Many new formulations have shifted from previous powder and emulsifiable concentrate (EC) forms to water based and other more environmentally-safe formulations.

The powder herbicide Dacthal W 75 was difficult to work with since powders are difficult to measure and mix. Tickes says the liquid product Dacthal Flowable is easier and safer to use.

“Many emulsifiable concentrates (EC) and powders are disappearing and we’re getting more environmental and user-friendly formulations,” Tickes said. “Water-based formulations are definitely an improvement over powder-based formulations.”

GoalTender (oxyfluorfen) is another case where an EC was replaced with a water-based formulation. In cole crops and onions, the new formulation is safer to use than Goal 2XL.

New techniques in applying herbicides also are generating positive results. The product Kerb traditionally has been applied by ground and incorporated by furrow irrigation. Tickes says Kerb is more effective when applied through sprinklers. Sprinklers were not originally designed to apply pesticides.

“There is some spotty weed control and plant damage but overall sprinklers are an effective way to apply many herbicides,” Tickes explained.

Goal 2XL gets high marks when applied by sprinkler on onions.

“We found increased crop safety and improved weed control when applying Goal 2XL by sprinkler,” Tickes said. “It defies conventional wisdom but it works.”

Corporate sponsors of the Fall Desert Crops Workshop included: Platinum Level – BASF, Bayer CropScience, and Syngenta; Gold Level – Dow AgroSciences and Valent U.S.A.; Silver Level - FMC Corporation; and Bronze Sponsor – Westbridge Agricultural Products.

cblake@farmpress.com

Current strength in agriculture ‘not a flash in the pan,’ USDA analyst says

Some farmers have been pinching themselves because of the  high commodity prices they’ve experienced this year. Are those prices a  one-time thing or part of a long-term trend? USDA’s Michael Dwyer says the  current prosperity could be here to stay unless it gets derailed by a  recession in Europe. Dwyer spoke at the USA Rice Federation’s annual Outlook  Conference in Austin, Texas.

Big reductions in rice acres for some states?

Big reductions in rice acres for some states?

Next season could bring significant reductions in acreage for some rice producing states, according to rice specialists addressing the USA Rice Outlook Conference in Austin, Texas. Here’s a state by state look.

Arkansas

Arkansas rice producers had their fourth consecutive rain-delayed planting season in 2011, which along with record flooding, contributed to a 35 percent decline in harvested acres, to 1.855 million acres, noted Bobby Coats, Extension economist and professor, University of Arkansas. “We had prevented plantings of 266,000 acres and failed plantings of 38,000 acres.”

Rice yields for 2011  are estimated at 7,000 pounds or 156 bushels per acre. “This is the second highest on record. Arkansas rice production was estimated at 81 million hundredweight, the lowest since 1997.”

Coats also pointed out that Arkansas producers “have now suffered through four straight years of serious, economic production and marketing challenges. This is a truly historic period.”

California

Chris Greer, rice farming systems manager, University of California, said it was a difficult planting season for many California producers. “We had periods of rain through much of March, then in April, it cleared out. We had about a one and half month period to get the crop in, and for the most part we did a good job of getting everything planted.

Fairly mild temperatures prevailed during the vegetative stage of rice development, “which usually leads to good yields, unless it is so cool that we get cool temperature blanking like we did in 2010. This year, we escaped that problem. We did see rice blast as far north and east as we’ve ever seen it.

“In October, we had about a 9-day period where we either had rain, dew, fog or drizzle. Yields and milling quality was looking good until we started getting some of the appraisals back. The vast majority of the rice is U.S. Grade No. 1, and we had quite a few No. 2s and some No. 3s. We did get quite a few calls saying we had red rice, but it appears to be damaged kernels.”

California acreage of 588,000 acres in 2011 “was the third highest in history, and only 5,000 acres short of the record which was set in 1981. Yield was about 8,400 hundredweight per acre, up 5 percent over the previous year. Total production was a little over 49 million hundredweight, the second highest on record.”

Greer noted that the price for California medium-grain rice “has been declining recently. There are reported cash sales of $10.25 to $10.75 in the last few weeks.”

Greer estimates California rice acres of between 550,000 acres and 575,000 acres in 2012.

Louisiana

A major issue for Louisiana rice producers in 2010 included too little fresh water, particularly on the southwest side of the state, and continued problems with salt water intrusion, according to Johnny Saichuk, Extension rice specialist, LSU AgCenter. “We also had too much water in some areas. Producers along the Mississippi River were worried about flooding. And we had problems with heat. I thought 2010 was bad, but 2011 was worse.”

Saichuk noted that producers were able to get rice planted early thanks a very warm March. “We had an abnormally cold April. We set record for cold temperatures into the second week in May. Then in the third week of May, we set record highs. June was okay, July and August were absolutely terrible. We had some fungicide failures and we had some problems with milling quality.

The fungicide failure did confirm sheath blight resistance to strobilurin fungicide. “We’ve never had variation in this fungus before. Rhizoctonia is a fungus that typically reproduces asexually, which means it doesn’t have a lot of variation. We don’t know yet whether this was a spontaneous mutation or whether we have actually had some sexual reproduction. We are looking at a possible Section 18 for another fungicide to address the problem.”

In the absence of rain, rice acreage could decline significantly this coming season in southwest Louisiana, especially in Vermillion Parish, due to the salt water intrusion problem. “Acreage in the northeast part of the state depends on the other crops.”

Mississippi

Lower yields in 2010 due to heat, lower rice prices at harvest and higher corn and soybean prices led to a 50 percent decrease in rice acres in the state in 2011, noted Nathan Buehring, Extension rice specialist, Mississippi State University.

“We typically range between 200,000 acres and 250,000 acres in Mississippi. This was the lowest acreage we have seen since the early 1980s.”

Buehring noted that the rice crop experienced several periods of excessive heat “and bacterial panicle blight was also a problem with the 2011 crop. We had a lot of questions as to whether the problem was actual sterility or bacterial panicle blight.”

Buehring projects a continued decline in rice acres in 2012. “Rice is going to have to be at a premium to some of these other crops, like corn and soybeans. We could be down to levels we haven’t seen since the 1970s.We will probably see an increase in the percentage of hybrid acres.”

Missouri Bootheel

Rice acreage in southeast Missouri declined significantly from the previous year, primarily due to flooding issues, noted Donn Beighley, rice research fellow, Southeast Missouri State University “About April 3, it started raining, and it didn’t stop. The St. Francis and Black rivers both overflowed their banks. We had water knocking on our door at the experiment station.”

Beighley noted that some farmers “flew rice into standing floodwaters, but most of the planting occurred after the first of May. That’s normally when we’re telling our farmers it’s time to stop planting. About 75 percent of the rice planting in the state occurred between May 15 and June 3. Because of the floods, we had more water-seeded rice than normal.”

Yields varied from “short of 140 bushels per acre up to over 210 bushels,” Beighley said. “The average is probably about 150 bushels. We did run into some problems on the later planted rice with high temperatures during pollination. Some of the even later planted rice had better yields because pollination occurred during cooler temperatures, but then we ran into problems trying to get it to mature. As I left to come to this meeting, there was still some rice in the fields. Last week, we had a 4-inch snow on it.”

Beighley estimates rice acres in the Bootheel “might get up to 175,000 acres in 2012.”

Texas

Larry Falconer, Extension economist, Texas AgriLife Extension Service, Texas A&M University, said the 2011 season was either the driest year on record, or the driest since 1917, depending on where you were.

While USDA pegged lower yields for Texas this season, it wouldn’t surprise Falconer to see a yield increase from the current yield going into the final estimate. “USDA has total rice production in Texas 6 percent lower than the previous year, but I think it’s going to be closer to a 4 percent reduction.”

Falconer estimates a 15 percent increase in fertility costs and substantial increases in diesel and natural gas prices for the coming year. Both will contribute to an approximate 10 percent increase in total direct expenses.

Given current prices, rice acreage in Texas would normally remain stable to slightly higher in 2012, according to Falconer. However, the availability of surface water will be a significant factor for rice acres in 2012. “Unless something drastic happens, there is going to be a curtailment of water supplies for three rice-producing counties served by the Lower Colorado River Authority. The current system is at 740,000 acre feet at this time. LCRA has announced that if we are below 850,000 acre feet on March 1, there will not be any water made available to the canal systems.”

Falconer said the three counties served by the LCRA make up about 50 percent of the acreage, depending on the year.

“Even under average conditions, it’s unlikely that we could get to water levels where there could be significant water made available for the rice crops. Long story short, we’re looking at curtailments of surface water that could amount to half the acreage in Texas, if not a little over, of the acreage that was planted this year. Unfortunately the curtailments could put our acreage back to levels not seen since 1901. I wish I had better news.”

Top 20 agriculture stories for 2011, Part 2

A listing of the most viewed Western Farm Press articles for 2011 in descending order: #12 - #6. To see #20 - #13, see Part 1.

12. EPA slammed in House hearing

David Bennett

11. Apple apps coming to agriculture

Harry Cline

10. Time to take on anti-biotech crowd over GMO labeling

Harry Cline

9. Calfornia farmers face future of grueling water regulations

Harry Cline

8. Higher early 2011 Western alfalfa hay prices than year ago

Cary Blake

7. Weather the story for wine grape growers in 2011

Greg Northcutt

6. Preserved 1927 Mississippi cotton field uncovered by 2011 flood

Elton Robinson

Get Ready For Income Taxes Part 2: Section 179 Expensing

Get Ready For Income Taxes Part 2: Section 179 Expensing

 

What is your goal in the tax planning process? Most responses are to pay as few taxes as possible, but the “reverse” may also be true, and that is to maximize your after-tax wealth. While those may not always be the perfect yin and yang of Schedule F preparation, effective tax planning should have the goal of maximizing your bank account when all taxes are paid. Most farmers have M.D. degrees (Masters’ of Deductions), but there are many other tax provisions that a good tax planner can help with the goal of increasing wealth.

Depreciation and expensing are keys to successful tax planning, and for many years, farmers lived on their depreciation. Recently the Internal Revenue Code (IRC) Section 179 expensing provision has been one that many farmers have exploited to their advantage and to fill their machine shed. In his annual tax guide for farmers, Purdue economist George Patrick says many recent changes have occurred with Section 179. The limit was expanded to $500,000 and 2011 is the final year for that, which allows farmers to treat purchases as an expense, rather than an appreciable capital purchase. Beginning with 2012 it drops back to $125,000.

Working with your tax advisor, you will have the time after the close of the tax year to make an expensing election on capital purchases, and that provides great flexibility for farmers, says Patrick. To qualify for Section 179 expensing, the following must happen:

  1. The property must be used in trade or business, such as farm equipment, livestock for breeding, grain storage equipment or field tile. A multi-purpose structure such as a machine shed is not eligible, along with farmland.
  2. The property must be purchased, and not leased, and may be new or used, but not inherited.
  3. Traded equipment can be eligible, but only the amount of any cash that is added to equipment traded in is eligible.
  4. There is also a $2 million dollar maximum that is eligible.
  5. The expensing is also limited to any taxable income, and cannot be surpassed to generate a loss. However, farm income can be added to off farm income within the household to be eligible for the expensing reduction.
  6. The expensing can be applied to one large item or several small items for write off. Patrick says, “Generally, it will be more advantageous to allocate the expensing deduction to longer-lived assets and to assets that are likely to be kept in the business for their entire depreciable life.” He also says the expensing action can be applied in an amended tax return, even if it was not used in the original tax return.

In addition to the Section 179 expensing, the IRS will also allow additional first-year depreciation, equal to 100% of qualifying property, after the Section 179 expensing is applied. Eligibility requires the property be placed into service before Jan. 1, 2012. If the service date is delayed to sometime in 2012, the rate declines to 50%. The property must meet all of the following:

  1. The original use must begin with the taxpayer, which requires the property to be new.
  2. The asset must be eligible for the Modified Cost Recovery System with a recovery period of less than 20 years.
  3. The property must be put into service before Jan. 1 2013, but some property is eligible for a longer period.
  4. Use of the Alternative Depreciation System is not required.

The Section 179 expensing deduction is limited to active businesses, and while it can be carried bay two years or forward five years, Patrick says, “Good tax management will generally avoid carry forward and net-operating loss situations.” Cash rent landlords are not eligible for Section 179 expensing.

 

Summary

Section 179 expensing has become a popular tax-management tool, since capital assets can be treated as an expense, and not depreciated over time. That allows the deduction to be fully made in the first year of ownership, but it is limited to equipment and breeding stock, but not multi-purpose buildings. Additional first-year depreciation can be accomplished, but all of the provisions should be made with the advice and counsel of a tax specialist.

 

Read the article at farmgateblog.com.

Federal Judge Finds California's Low Carbon Fuel Standard Unconstitutional

Federal Judge Finds California's Low Carbon Fuel Standard Unconstitutional

 

A judge in Federal District Court in Fresno, California, has sided with America's ethanol industry in ruling that the State of California's Low Carbon Fuel Standard (LCFS) is unconstitutional. Judge Lawrence J. O'Neill agreed with the arguments that the LCFS is in violation of the Commerce Clause the U.S. Constitution.

In a joint statement, RFA President and CEO Bob Dinneen and Growth Energy CEO Tom Buis said: "The state of California overreached in creating its LCFS by making it unconstitutionally punitive for farmers and ethanol producers outside of the state's border. With this ruling, it is our hope that the California regulators will come back to the table to work on a thoughtful, fair, and ultimately achievable strategy for improving our environment by incenting the growth and evolution of American renewable fuels."

The groups filed their suit on Dec. 24, 2009 and asserted that the California LCFS violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states. The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct.

With its original filing, the groups noted, "The LCFS imposes excessive burdens on the entire domestic ethanol industry while providing no benefit to Californians. In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security. One state cannot dictate policy for all the others, yet that is precisely what California has aimed to do through a poorly conceived and, frankly, unconstitutional LCFS."

On this claim the court found that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct. As a result, the court issued an injunction. Judge O'Neill also ruled that CARB failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.

The ruling allows CARB to appeal Judge O'Neill's decision immediately to the U.S. Court of Appeals for the 9th Circuit. RFA and Growth Energy will defend the Judge's decision that the LCFS is unconstitutional in any appeal that may be filed by CARB.

Where Maryland Value-added Ag Grants Are Going

Where Maryland Value-added Ag Grants Are Going

The Maryland Agricultural and Resource-Based Industry Development Corporation recently awarded $195,500 in producer grants to help 13 agricultural businesses finish value-added projects in 10 counties. The monies will assist in diversifying business activities ranging from making cheese and ice cream to enhancing agritourism opportunities.

This is the second year for the Maryland Value Added Producer Grant – Capital Assets Option Program. The producer grant program aims to encourage expansion or diversification by installing capital assets to make or support a product defined as "value-added".

MAKING WAY FOR CIDER: With plentiful supplies of apples, cider-making is a natural value-multiplier for Baugher Orchards and Farm Market.

Eligible producer grant applicants must be a crop or livestock producer or processor, ag cooperative, seafood processor or timber products processor. Up to $20,000 per applicant is available for purchasing or installing farm structures and major fixtures, livestock or seafood product processing facilities, fruit or vegetable processing facilities, timber or wood products facilities, or manure digesters.

Recipients must provide at least a 100% cash match. The average amount awarded for 2011 was about $15,000. Here's a quick look at the funded projects:

Baugher Enterprises, Inc. (Carroll County): Complete purchase and installation of pasteurization equipment for a cider-making enterprise.

Mark Cascia Vineyards (Queen Anne's County): Purchase two fixed-top tanks with cooling jackets and two variable capacity tanks for wine making.

Cedar Hill Farm (Harford County): Install a commercial kitchen on this dairy farm to expand family's cheese-making capabilities.

Boordy Vineyards (Baltimore County): Purchase software and equipment to expand a higher-value niche marketing campaign for Maryland-grown (rather than imported) grapes.

Rocky Point Creamery (Frederick County): Purchase and install equipment for making ice cream and developing a farm retail/agri-tourism facility.

Misty Meadow Farm (Washington County): Purchase ice cream making equipment for a multi-generational family dairy operation.

Shepherds Manor Creamery, LLC (Carroll County): Purchase a yogurt fill and heat seal machine for a family-run sheep dairy operation. 

Chesapeake Bay Dairy (Worcester County): Purchase ice cream and pasteurization equipment for a family-run dairy farm on Maryland's Lower Eastern Shore.

Kilby Cream (Cecil County): Purchase a cheese vat, cheese-making supplies and yogurt-making equipment on a family-run dairy currently making ice cream and bottling milk.

Lockbriar Farms (Kent County): Purchase equipment to produce fruit-flavored ice cream using farm-raised fruit and locally-sourced dairy products.

Eve's Cheese (Kent County): Purchase and install a milk tank for segregating Jersey (higher fat content) milk destined for cheese production on this family dairy.

Nice Farms Creamery, LLC (Caroline County): Purchase a cream separator for milk production on this family-run dairy farm.

Clemsonville Christmas Tree Farm (Frederick County): Complete a nature maze trail on this Christmas tree operation.

"MARBIDCO is delighted to assist these typically family-run enterprises to further their entrepreneurial business development aspirations," says Steve McHenry, MARBIDCO Executive Director. "It can be quite a lot of work. But value-added processing is a viable way to find new markets, increase farm-gate revenues, expand local job opportunities, and help sustain agricultural operations for the next generation."

For more on MARBIDCO's programs, check the website: www.marbidco.org.

Commodity prices no flash in the pan

Some farmers have been pinching themselves because of the high commodity prices they’ve experienced this year. Are those prices a one-time thing or part of a long-term trend? USDA’s Michael Dwyer says the  current prosperity could be here to stay unless it gets derailed by a recession in Europe. Dwyer spoke at the USA Rice Federation’s annual Outlook Conference in Austin, Texas.