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NLPA News Brief
December 7, 2016
Livestock and Ag Credit News

Proposed Tax Regulation Threatens Multigenerational Cattle Operations

Wisconsin State Farmer, 12/05/16—The Internal Revenue Service hosted a public hearing on a Department of Treasury proposed rule that would eliminate or greatly reduce available valuation discounts for family–related entities. Kevin Kester, National Cattlemen's Beef Association vice president, said the regulation would effectively discourage families from continuing to operate or grow their businesses and passing them on to future generations.

Many cattle operations are family–owned small businesses, facing the same concerns as other small–businesses – making payroll, complying with numerous federal and state regulations, and paying bills, loans and taxes. However, cattle producers face a number of unique challenges specific to agriculture.

"Ranching is a debt–intensive business, making the U.S. livestock industry especially vulnerable to the estate tax," said Kester. "Beef producers largely operate an asset–rich, cash–poor business model: a cattleman's biggest asset is his land. In the event of the death of a principal family member, illiquid assets are often sold in order to meet the costs associated with the estate tax. As a result, many families are unable to keep their estates intact."

For more than two decades, livestock producers have utilized legitimate valuation discounts as a means of maintaining family ownership. These discounts, which accurately reflect the actual market value of minority ownerships in closely–held businesses, reduce the tax burden at death allowing agricultural operations to maintain family ownership from one generation of producers to the next.

The proposed regulations under Section 2704 will have a profoundly negative impact on the business climate for farmers and ranchers, ultimately dis–incentivizing a new generation of cattle producers from carrying on the family business. For that reason, NCBA calls for the IRS to formally withdraw the proposed rule.



Livestock and Ag Credit News

VFD Plan for Producers

By John Maday, Drovers, 12/05/16—We're now counting the days until the FDA's new veterinary feed directive (VFD) rules take full effect on January 1. Many producers, and even veterinarians, remain unclear on the details and procedures they will need to follow to continue using medicated feeds for prevention, control and treatment of disease in their herds.

During the recent Academy of Veterinary Consultants (AVC) winter conference, a panel of veterinarians close to the issue discussed common questions and practical planning for compliance with the new VFD rules. The panel included Mike Apley, DVM, PhD, Kansas State University, Marilyn Corbin, DVM, PhD, Zoetis and Guy Hufstedler, PhD, Elano Animal Health.

The expanded VFD rule ends over–the–counter (OTC) purchases of medically important feed–grade antibiotics, placing their purchase and use under the direct oversight of veterinarians.

Off–label use of medicated feeds is illegal, so the VFD order, which specifies the animals to be treated, the VFD drug(s) to be used, dosage, duration of use and reasons for use, must conform with product labels. Producers, working with their veterinarians, must ensure their on–farm use of VFD drugs conforms to the VFD order and the product label.

Buy Only 'Hormone Free' Meat? Farmer Says Don't Be Fooled by Deceptive Labels

By Peggy Greenway, Genetic Literacy Project, 12/05/16—I'm a mom, a grandma and a farmer. I'm also a consumer and buy most of my food at my local grocery store. I'm grateful for the safest food supply in human history, and glad that there are rules in place that ensure its safety, and regulate label claims so that they are truthful and accurate. However, as I make my way around the store I see many labels appearing more and more that bend the truth or perhaps are even outright deceptive. We are seeing this more and more.

The labels that irk me the most are those on meat that mention hormones. The misleading information and innuendos create needless fear and mistrust for consumers purchasing meat. I know this because of conversations I've had with my fellow shoppers. I know this because I raise the animals.

I ask questions and encourage conversation. As a pig farmer, one question I always ask people is, "What percentage of pork (or poultry) is raised in the US without added hormones?" I even try to be helpful and give three answers to choose from: "Is it 50%, 75% or 100%?" Of all the times I have asked this question (sadly) I have never had one person answer it correctly. The answer is 100%.

Yes, it's true: No pigs or poultry are given added hormones. When I ask why they think added hormones are used it always comes back to one answer: labels.

Prairie Dogs: An Overlooked Hit to Your Bottom Line?

Scottsbluff Star Herald, (Nebraska), 12/04/16—Some people love them and others hate them. Chances are if you are in livestock production, the latter is true. Prairie dogs present a challenge for all landowners, not just livestock producers, in terms of land values, neighbor relations, and public health. A proactive management strategy is important to prevent prairie dogs from causing long–term damage.

An overview of the prairie dog can help landowners plan management strategies. Five species of prairie dogs inhabit very specific geographic regions.

In the lens of livestock production, prairie dogs can compete with livestock for forage and impact weight gain. With the ability to reproduce and colonize quickly, a proactive approach to prairie dog management is essential.

Pork Group Remains Optimistic About Future Exports

By Jeff DeYoung, Iowa Farmer Today, 12/03/16—Strong exports markets and consumer demand should help whittle into record pork production.

This comes in spite of President–elect Donald Trump's announcement Nov. 21 that he intends to withdraw the U.S. from the Trans–Pacific Partnership (TPP) trade agreement.

Brett Stuart, an economist with Global AgriTrends, says pork exports to Japan and other countries should at least maintain the status quo if Trump follows through on his campaign promise.

"It doesn't shift market share away from Japan," he said at a teleconference sponsored by the National Pork Board Nov. 22. "We would have loved to have had TPP, but we are going to continue to ship pork to Japan and elsewhere."

Stuart says roughly 22 percent of U.S. pork production is exported, adding $47 per head to the value of a market hog. He says in the face of record pork production, it is vital pork continue to move overseas.

Insulating Homes with Natural Sheep's Wool

By Lauren Shanesy, Builder, 12/05/16—Wool has been keeping both sheep and humans warm for centuries. But now one company is using shorn sheep's wool to give fiberglass and foam insulation a run for their money.

Havelock Wool uses 100% natural wool sourced from New Zealand sheep to insulate homes and other buildings. Sheep grow wool in excess, so the renewable material is readily available and has a number of inherent, eco–friendly properties that make it a viable contender for building insulation. "It's not even biomimicry, it's more biophilia," says Andrew Legge, the company's founder. "It's using a product that nature has given us in our daily lives."

Certification Would Ensure Quality Welfare During Cattle Transport

The Cattle Site, 12/01/16—Over 530,000 cattle are shipped to slaughter plants each week, making the transport of cattle a vitally important part of the beef and dairy industries. Almost all beef or dairy cattle are transported once during their life, and often they may be transported as many as 6 times. A new report details how a cattle transporter quality assurance program could help ensure the safe, humane, and expeditious shipping of cattle and benefit the industry significantly in terms of both economics and efficiency.

"Every stakeholder has an expectation for fostering animal well–being," Karen Schwartzkopf–Genswein, lead author of the study, said. "Producers, consignors, packers, and retailers alike want to improve animal treatment during transportation."

The study identified particular aspects of transport as important for animal welfare, namely loading density, transport duration, trailer design and ventilation, driving, handling quality, road and environmental conditions, and fitness of the animals.

Carbon Sequestration a Positive Aspect of Beef Cattle Grazing Grasslands

By Donald Stotts, Tri–State Livestock News, (South Dakota) 12/01/16—Beef cattle grazing on grass pastures might not be the first thing people think of when discussing the subject of combatting greenhouse gas emissions, but it is an agricultural practice providing significant dividends to the effort.

"Environmental as well as economic sustainability are key elements of best management practices for agriculture, as most people involved in agriculture are well aware they are stewards of the land," said Keith Owens, Oklahoma State University associate vice president for the university's statewide Oklahoma Agricultural Experiment Station system. "Air, water, soil; we pay attention to all of them."

Carbon sequestration – the long–term capture and storage of carbon from the atmosphere, typically as carbon dioxide – is a method of reducing greenhouse gas emissions.

"Many different agricultural production practices can capitalize on carbon sequestration in both soil and biomass to reduce negative environmental effects," Owens said. "These practices enable use of the natural carbon cycle to replenish carbon stores while reducing the amount of carbon in the atmosphere." That is where beef producers who employ grasslands as a pasture resource come in.

Global Livestock News

Canadian Beef Industry Works to Sustainably Increase Production

The Cattle Site, 12/06/16—Canada has an opportunity to play a leading role in meeting rising global food production needs responsibly through investments in agriculture research across a variety of disciplines.

On Friday (2 December), the Beef Cattle Research Council (BCRC) and the national Beef Value Chain Roundtable (BVCRT) released a strategy to achieve high priority beef research objectives that support increasing productivity while remaining environmentally, socially and economically sustainable.

The new Canadian Beef Research and Technology Transfer Strategy will support the industry's ability to manage challenges and sustainably supply demand. This strategy builds upon the success of the 2012–2018 National Beef Research Strategy. The new strategy's research objectives are to be captured by 2023.

With long–term trends of rising temperatures, decreasing precipitation and greater weather variability, ongoing research and innovation is necessary to produce adequate livestock feed. Development and adoption of technologies can also enable the industry to continually improve efficiencies that reduce its environmental footprint. Production efficiencies reduce greenhouse gas emissions and the land, water and fossil fuels needed to produce each kilogram of safe, high quality beef.

'Idea of Cutting Beef Production Needs to Be Given Serious Consideration'

By Amy Forde, Agriland (Dublin, Ireland), 12/01/16—The idea of cutting production in the beef sector now needs to be given serious consideration, ICSA President President Patrick Kent has said. Teagasc figures that show a likely drop of more than 10% in beef prices in 2017 show how much current agriculture policies and the national strategy for expansion are out of touch with reality on the ground, he said.

"Food Wise 2025 is a call to beef farmers to expand production, which can now only be described as ludicrous advice. "It simply does not make sense anymore and new policies need to be explored."

Global Livestock News

USDA Surveying Sheep Operations

The Mesabi Daily News, (Minnesota), 12/5/16—Starting later this month, the USDA's National Agricultural Statistics Service will measure sheep inventories and wool production during a nationwide survey. If you are selected as a survey participant, please take the time to accurately submit your information.

"Interest in sheep and goat data continues to grow with increased diversification in agriculture and consumer demands," said Northeastern Regional Director King Whetstone. "The Sheep and Goat Survey gives producers the opportunity to report the latest information on conditions and trends in the industry." Operators surveyed will be asked to provide information about their sheep inventories, counts of lambs born during 2016 and production and prices received for wool.

Direction of Immigration Reform Is a Farm Bureau Concern

By Ken Anderson, Brownfield Ag News, 12/06/16—Donald Trump has promised that immigration reform will be one of his top priorities as President. But there are concerns about how his policies will impact immigrant workers in agriculture. Kristi Boswell, a director of Congressional relations with American Farm Bureau, says they're working to ensure farmers have access to a legal and stable workforce.

"Farm Bureau supports border security and that is clearly going to be one proposal that comes on the enforcement angle," Boswell says. "But we need to see a new, flexible guest worker program that works not only for seasonal workers, but year–around workers. Ideally, that's administered by USDA rather than the Department of Labor and is just more market–based and streamlined."

But Boswell says they also want to make sure that current workers, many of whom are in unauthorized status, can remain working in the U.S.

"Having that short–term stability is critical for overall success, and allowing farmers to go to bed at night and know that their crops are going to be harvested in the morning."

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