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Can I avoid paying taxes on oil/gas payments?

By Chris Zoller, Chris Bruynis & David Marrison, OSU Extension Educators & Peggy Hall, Extension Specialist, Agricultural Law

The leasing of land for oil and gas drilling throughout eastern Ohio has provided landowners with substantial revenue.  OSU Extension has received many calls from landowners asking how they can avoid paying taxes on these payments.  The quick answer is that there are very few ways to avoid paying taxes on lease bonus payments or royalty income.  Oil and gas revenue payments are classified as Miscellaneous Income and are subject to both federal income and Ohio taxes (and should be reported appropriately).
Taxation on Lease Bonus Payments: Cash payments received by the landowner prior to drilling, commonly referred to as lease bonus payments (typically paid on a per acre basis) are considered ordinary income for tax reporting purposes and are subject to ordinary income taxes. These payments might be made on an annual basis each year of the lease’s primary term, or could be made as a lump-sum payment that combines all annual payments into one payment made upon executing the lease. … Continue reading

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Honeybee deaths linked to seed insecticide exposure

Honeybee populations have been in serious decline for years, and Purdue University scientists may have identified one of the factors that cause bee deaths around agricultural fields.

Analyses of bees found dead in and around hives from several apiaries over two years in Indiana showed the presence of neonicotinoid insecticides, which are commonly used to coat corn and soybean seeds before planting. The research showed that those insecticides were present at high concentrations in waste talc that is exhausted from farm machinery during planting.

The insecticides clothianidin and thiamethoxam were also consistently found at low levels in soil — up to two years after treated seed was planted — on nearby dandelion flowers and in corn pollen gathered by the bees, according to the findings released in the journal PLoS One this month.

“We know that these insecticides are highly toxic to bees; we found them in each sample of dead and dying bees,” said Christian Krupke, associate professor of entomology and a co-author of the findings.… Continue reading

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Ohio winners of Amercia's Farmers Grow Communities

Monsanto’s America’s Farmers Grow Communities winners were selected in December and are now being contacted. The winning organizations will soon be contacted and check presentations will be scheduled over the next two months. The 2012 Ohio winners have been announced and can be found at www.growcommunities.com.

Sixty three Ohio counties were involved for a total amount of $157,000 being donated to local organizations.  Nationally to date, there are confirmed 1,112 winning farmers and over 200 organizations!

This is the second year for the national program and nearly 60,000 farmers signed up for the chance to win.

Heather Hetterick spoke with Dekalb/Asgrow Territory Sales Manager Janelle Brinksneader about the impact this program has on the local communities Monsanto does business in.

Heather Wrap for 1-16-12


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Ohio winners of Amercia’s Farmers Grow Communities

Monsanto’s America’s Farmers Grow Communities winners were selected in December and are now being contacted. The winning organizations will soon be contacted and check presentations will be scheduled over the next two months. The 2012 Ohio winners have been announced and can be found at www.growcommunities.com.

Sixty three Ohio counties were involved for a total amount of $157,000 being donated to local organizations.  Nationally to date, there are confirmed 1,112 winning farmers and over 200 organizations!

This is the second year for the national program and nearly 60,000 farmers signed up for the chance to win.

Heather Hetterick spoke with Dekalb/Asgrow Territory Sales Manager Janelle Brinksneader about the impact this program has on the local communities Monsanto does business in.

Heather Wrap for 1-16-12


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Custom rate survey

By Barry Ward, Leader, Production Business Management, OSU Extension

Custom farming providers and customers often arrive at an agreeable custom farming machinery rate by utilizing Extension surveys results. Ohio State University Extension collects surveys and publishes survey results from the Ohio Farm Custom Survey every other year. This year we are updating our published custom farm rates for Ohio. We need your assistance in securing up-to-date information about farm custom work rates, machinery and building rental rates and hired labor costs in Ohio.

Please download the Ohio Farm Custom Rates 2012 survey and respond even if you know only a few rates.  We want information on actual rates, either what you paid to hire work or what you charged if you perform custom work. Custom Rates should include all ownership costs of implement and tractor (if needed), operator labor, fuel and lube. If fuel is not included in your custom rate charge there is a place on the survey to indicate this.… Continue reading

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What’s soy doing for you? Find out in series of meetings

The Ohio Soybean Council (OSC) and soybean checkoff are hosting six regional meetings during January and February for farmers and industry stakeholders throughout the state. The What’s Soy Doing for You meetings will offer an update about soybean checkoff programs and initiatives, as well as regional issues that affect agriculture.

“These meetings will be a great way for local farmers to get a snapshot of targeted issues affecting their communities,” said John Motter, OSC chairman from Hancock County. “There will also be an opportunity to ask questions and network with local leaders and other farmers.”

Each meeting will include a keynote speaker about a local agricultural issue and a panel discussion featuring farmers, business leaders and other industry experts from the community.

All farmers and industry stakeholders are invited to attend.

What’s Soy Doing for You?
Monday, January 16
York Township Building
6609 Norwalk Road, Medina, Ohio
(8 a.m. – 9:30 a.m.)… Continue reading

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What's soy doing for you? Find out in series of meetings

The Ohio Soybean Council (OSC) and soybean checkoff are hosting six regional meetings during January and February for farmers and industry stakeholders throughout the state. The What’s Soy Doing for You meetings will offer an update about soybean checkoff programs and initiatives, as well as regional issues that affect agriculture.

“These meetings will be a great way for local farmers to get a snapshot of targeted issues affecting their communities,” said John Motter, OSC chairman from Hancock County. “There will also be an opportunity to ask questions and network with local leaders and other farmers.”

Each meeting will include a keynote speaker about a local agricultural issue and a panel discussion featuring farmers, business leaders and other industry experts from the community.

All farmers and industry stakeholders are invited to attend.

What’s Soy Doing for You?
Monday, January 16
York Township Building
6609 Norwalk Road, Medina, Ohio
(8 a.m. – 9:30 a.m.)… Continue reading

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WISHH reaches out to Pakistan fisheries with U.S. soy

The American Soybean Association’s (ASA) World Initiative for Soy in Human Health (WISHH) program and the Pakistan Fisheries Development Board have started the “FEEDing Pakistan” program. The U.S. Department of Agriculture (USDA) is supporting the three-year effort that will assist Pakistan in using U.S. soybean meal to make high-protein fish feeds.

Pakistan has an extensive system of fish farming but no commercial fish feeds are produced in the country. Soy-based fish foods are expected to allow the fish to grow 4-5 times faster. With approximately 187 million people, Pakistan is the sixth most populous country in the world. Therefore, FEEDing Pakistan is key for better nutrition and economic growth.

“FEEDing Pakistan represents another milestone for WISHH,” said WISHH Chairman David Iverson, an Astoria, S.D. soybean grower. “Our farmer-led 2011-2015 strategic planning identified aquaculture and livestock development as an important opportunity where WISHH can fulfill its mission.

“USDA’s support of FEEDing Pakistan is good news for U.S.… Continue reading

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Ohio Court of Appeals denies challenge to ODA anhydrous regulations

By Peggy Kirk Hall, director of agricultural law, Ohio State University Agricultural and Resource Law Program

A claim that the Ohio Department of Agriculture’s (ODA) anhydrous ammonia regulations are unreasonable and fail to protect public health and safety has again been rejected by the courts. A recent decision by Ohio’s Fifth District Court of Appeals concluded that the challenge by Sharon Township’s Board of Trustees in Medina County failed to establish a valid legal claim.

The case raised considerable controversy in Sharon Township, where the owner of South Spring Farms requested ODA approval to install a 12,000-gallon anhydrous ammonia storage tank. Ohio law grants ODA the authority to adopt rules concerning the handling and storage of anhydrous ammonia and other fertilizers and also prohibits any local regulation of fertilizers.  ODA created anhydrous regulations in the late 1970s; those regulations require ODA approval of the location and design of a stationary ammonia system.… Continue reading

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Ohio’s average corn yields down from 2010

Ohio’s 2011 average corn yield is estimated at 158 bushels per acre, down 1 bushel from the November forecast, and down 5 bushels from the previous year. Producers harvested 3.22 million acres for grain this past year, compared to 3.27 million acres in 2010. Total State production of 508.8 million bushels is 5% below the 2010 total. Acreage harvested for silage is estimated at 140,000 acres, unchanged from the previous year. The average silage yield is estimated at 18.0 tons per acre.

Ohio’s average soybean yield for 2011 is estimated at 47.5 bushels per acre, up 1.5 bushels from the November forecast. Growers harvested 4.54 million acres of soybeans in 2011 from the estimated 4.55 million acres planted. Total soybean production is estimated at 215.7 million bushels, down 2% from the 220.3 million bushels produced in 2010.

Alfalfa yields averaged 3.40 tons of dry hay per acre in 2011, while all Other hay averaged 2.00 tons per acre.… Continue reading

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Ohio's average corn yields down from 2010

Ohio’s 2011 average corn yield is estimated at 158 bushels per acre, down 1 bushel from the November forecast, and down 5 bushels from the previous year. Producers harvested 3.22 million acres for grain this past year, compared to 3.27 million acres in 2010. Total State production of 508.8 million bushels is 5% below the 2010 total. Acreage harvested for silage is estimated at 140,000 acres, unchanged from the previous year. The average silage yield is estimated at 18.0 tons per acre.

Ohio’s average soybean yield for 2011 is estimated at 47.5 bushels per acre, up 1.5 bushels from the November forecast. Growers harvested 4.54 million acres of soybeans in 2011 from the estimated 4.55 million acres planted. Total soybean production is estimated at 215.7 million bushels, down 2% from the 220.3 million bushels produced in 2010.

Alfalfa yields averaged 3.40 tons of dry hay per acre in 2011, while all Other hay averaged 2.00 tons per acre.… Continue reading

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Ohio soybean and wheat stocks up from a year ago

Corn stocks in all positions in Ohio on December 1, 2011 totaled 398.1 million bushels, 1% below the 401.9 million bushels stored on December 1, 2010. On-farm stocks, at 280.0 million bushels increased 4% from the 270.0 million bushels on December 1, 2010. On-farm stocks accounted for 70% of the total stored. Off-farm stocks decreased 11 percent from a year ago to 118.1 million bushels.

Soybean stocks in all positions in Ohio totaled 165.9 million bushels on December 1, 2011 up 19% from the previous December. Off-farm stocks at 70.9 million bushels are 24% above the 57.2 million bushels on hand December 1, 2010 and accounted for 43% of total storage. On-farm stocks at 95 million bushels are up 16% from the 82.0 million bushels stored on farms at the same time last year.

All wheat stored in Ohio as of December 1, 2011 totaled 73.9 million bushels, up 1% from December 2010.… Continue reading

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Livestock supply will likely remain tight

Consumers should expect little relief in the price of a T-bone steak as cattle producers continue to decrease their herds because of soaring feed prices and a weak economy. James Mintert, professor of Ag Economics and assistant director of Extension at Purdue University, spoke today at the American Farm Bureau Federation’s 93rd Annual Meeting.

High demand for ethanol has forced the price of corn to nearly double in the past few years, driving livestock production costs up and putting cattle producers in the red. They’ve responded by raising fewer cattle, according to Mintert.

“Beef producers are recouping production costs by putting less meat on consumers’ plates,” Mintert said. “Fewer pounds of meat mean higher prices throughout the system.”

From 1925 to 1975 the beef industry was relatively healthy, Mintert explained, as demand and production grew with the population and income growth. The span from1975 to 2011 looks a lot different, as the number of cattle dropped from 132 million head to 90 million in 2011.… Continue reading

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Best to enact new farm bill this year

Farmers are better off if members of Congress can agree on a new farm bill this year, according to American Farm Bureau Federation farm policy specialist Mary Kay Thatcher, who spoke at the 2012 Farm Bill issue conference at AFBF’s 93rd Annual Meeting.

With Congress unable to agree on much these days and with a shrinking budget to work with, passing a new farm bill could be an uphill climb and get pushed to next year.

“There is no upside to that,” Thatcher said. “There will be even more budget cuts if that happens. There’s every reason to push it through this year if we can.”

Thatcher outlined the political situation surrounding the farm bill, including growing support in Congress for limiting eligibility by capping farmers’ income and increasing use of food stamps and other nutrition programs as the U.S. economy remains sluggish.

“The economy will be a tremendous issue going forward,” said Thatcher, “and one of the reasons it will be difficult to finish a farm bill in 2012.”… Continue reading

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AgriLabs announces 2012 NCBA Scholarship Program

For the fifth consecutive year, AgriLabs will donate $1500 to be awarded as scholarships to deserving youth by participating state cattle association affiliates.  Selection of the participating organizations will be made during the National Cattleman’s Beef Association (NCBA) Convention in Nashville, TN, being held from February 1-3, 2012.

Each of the three days the convention’s trade show is open, one lucky attendee will be selected to choose the affiliate organization that will receive a $500 scholarship grant.  In turn, the organization-which must be a state affiliate of either NCBA or the American National Cattle Women (ANCW or the ANCW foundation)-will award the $500 educational scholarship to a deserving youth during 2012.

Convention participants can register to win and select their participating organization by registering at the AgriLabs booth (#436).

“Educating the youth of today who will be the leaders of our industry tomorrow is an important responsibility,” says Adam Yankowsky, business unit manager, AgriLabs. … Continue reading

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Ohio USDA offices slated to be closed

On January 9, Ag Secretary Tom Vilsack announced that USDA would be restructuring the department to meet budget restrictions. He is calling it USDA’s Blueprint for Stronger Service, which will streamline the department’s operations and cut costs.

Part of that plan calls for the consolidation and closure of offices across the country. In Ohio those offices include:

  • Animal Plant Health Inspection Service, APHIS, in Bowling Green, Wood County
  • Agriculture Research Service, ARS, Coschocton, Coshocton County
  • Farm Service Agency Offices, FSA
  • Brookville, Montgomery County
  • Pomeroy, Meigs County
  • Springfield, Clark County
  • Somerset, Perry County
  • Carrollton, Carroll County
  • Food and Nutrition Service, FNS
    • Cincinnati, Hamilton County
    • Columbus, Franklin County


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    Now is the time to make your estate plans

    Attendees of the American Farm Bureau Federation’s 93rd Annual Meeting picked up valuable advice from Christopher Hesse on how to protect their estates. Hesse is a CPA with LarsonAllen Firm-Wide Tax Resource Group and a partner in a family farm.

    According to Hesse, proper planning is critical to ensure an estate will be passed down to future generations, and not the government. The current death tax exemption for 2012 is $5 million. While Congress is expected to extend the current exemption to 2013, Hesse warns that if this is not the case, it will be reduced to $1 million. Any amount over the death tax exemption is subject to a taxable amount of 55% of the asset’s present value.

    “It’s important to start the estate planning process now, because no one has a crystal ball that can predict the future,” said Hesse.

    With the high price of farmland today, farmers and ranchers can easily find themselves having an estate worth more than $5 million.… Continue reading

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    Scholarship programs

    United Producers Inc. (UPI) is excited to support the future generation of agriculture through its scholarship program.

    UPI is offering two $1000 scholarships in each of its 16 districts to deserving high school and college students pursuing agriculture degrees.

    “The future of agriculture depends on those who are currently considering and pursuing a career in this critical industry,” said Dennis Bolling, President and CEO, United Producers Inc. “We want to do all we can to encourage students who have an interest in agribusiness, farming, veterinary medicine or other agriculture-based industries to pursue their careers, and this is our way of helping them do so.”

    Applicants must be a Preferred Member of UPI or a child or grandchild of a Preferred Member, and a 2012 graduating high school senior enrolled in, or a student currently attending, a college or technical school studying an agriculture-related field. Completed applications and essays must be postmarked by April 1, 2012.… Continue reading

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    Jersey production sets records in 2011

    The American Jersey Cattle Association (AJCA) announced that new records for production by Registered Jersey cows were established in 2011.

    The official Jersey lactation average increased to 18,633 lbs. milk, 889 lbs. fat, and 676 lbs. protein. On a Cheddar cheese equivalent basis, average yield was 2,294 pounds. All are new category records.

    A record 91,028 lactations were processed by the AJCA, an increase of 51.4% in 10 years.

    The lactation average is calculated on a standardized 305-day, twice daily, mature equivalent (m.e.) basis.

    These records for Jersey production come on the heels of a study published in the January, 2012 issue of Journal of Dairy Sciencethat documents lower production inputs and reduced environmental impacts of Jersey milk production because of higher component levels and small body mass to be maintained.

    Using Jersey and Holstein data from the Dairy Records Management System (DRMS) database in 2009, researchers Jude Capper and Roger Cady determined that Jersey cows required 20% less total feedstuffs by weight and 32% less water to produce the same amount of milkfat and protein as Holstein cows.… Continue reading

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    Ag involvement is the best defense against excess regulation

    Farmers need to commit their time, energy, money and best thinking if they want to stop the proliferation of federal regulations that threaten their businesses, a U.S. Chamber of Commerce official said today at the American Farm Bureau Federation 93rd Annual Meeting.

    “This isn’t academic folks,” said Reed Rubinstein, senior counsel for the Chamber of Commerce. “When the federal government exercises its authority, it can send you to jail. We are all one regulation away from being out of business.”

    Most of the “hyper regulation” currently affecting farmers stems from expansion of environmental law, he said, but new health care regulations and financial reform will add to their regulatory burden in the next five to 10 years.

    Increasingly, the Environmental Protection Agency is emphasizing ecological sustainability of agriculture in its regulatory programs, based on what it says are public concerns, Rubinstein said. “Translation: ‘You need somebody to tell you how to run your business because you’re not doing it in the right way,” he said.… Continue reading

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