Everybody likes progress, cheap commodities like food, water and energy and nobody likes change. These are truths that can be bet upon time eternal regardless of what region of the country you are in. This is called the NIBY principle. Not In My Back yard.
Yet, in order to achieve cheap commodities, quick access to what we want, infrastructure has to be in place. This year, BNSF railroad hauled nearly 1 million car loads of ag commodities across the country, with rail traffic into Minnesota , Montana and the Dakotas increasing by 31% in the last 5 years and outgoing traffic increasing b y 69%. The oil production boom has something to do with those numbers certainly. All that traffic means more demand for existing rail space and the thought of more rail lines.
I doubt anyone is lining up to allow railroads to cut their fields up into smaller parcels. The same holds true for the Rock Island Clean Line energy lines. This project will deliver 3500 megawatts of energy from Northwest Iowa to Illinois and other eastern states over 500 miles. While many landowners will eventually give easements, others will not be swayed. We use eminent domain as a process to allocate between the rights of an individual and the needs of society for improvement and progress. This process is a lengthy one. In February , the proponents of the energy line asked the Iowa Utilities board to approve their concept and plan and then allow them to go back in to use eminent domain for the parcels that would not sell. This was not allowed by the board. If it had been, the leverage the energy line would have been able to bring to bear would be large. It is much easier to take away one parcel from the unwilling when all others have already given in and been paid. It is a far more difficult row to hoe when many parcels are not yet secured. Currently 1248 objections have been filed to the line and less than 15% of the proposed route has been secured via voluntary easements.
When I first moved to Sumner as a kid, I was asked to be in a rock group. I said I preferred country music. It turns out the rocks are here EVERY year and you get paid to pick them up, which was a change from my earlier experience in the hills of Clayton County. Tis the season of rock picking, hay making and detasseling is not far behind. While this work isn’t as readily available as it once was, it still plays an important part of our local economy.
Whether a child who is a dependent has to file his or her own return generally depends on two easily determined factors: whether the money is earned or passive and the amount of income. That is, for most kids, did you put it in the bank and watch it grow or did you get your hands dirty or give up your time to get the money.
The rule for children and other dependents is that if the only income is earned and it is less than $5,700, there’s no need to file a federal income tax return.
Even if your child doesn’t have to file a federal income tax return, he or she may want to file a return if federal income tax was withheld from income. This doesn’t usually happen for farm jobs or babysitting, but it might if they fill out the W4 wrong at the fast food restaurant. Your child might also want to file if he or she qualifies for certain credits which would result in a refund.
The rules are different for unearned income like dividends and interest. It is referred to as the “Kiddie Tax”. For children under the age of 18, or under the age of 23 while a full time student, the first $950 is considered tax-free and the next $950 is taxed at your child’s rate. Unearned income over $1,900 is taxed at the child’s parents’ tax rate
70% of North American farms will change hands by 2025. This is not just ownership, but who farms the land. This provides plenty of opportunities for American farmers. We need to get over the concept that farming is a lifestyle that deserves special provisions protections and romanticism. It is apparent that it is a business to the non farm sector, and unless the operators of farms act like business men and women, they will be consumed by those who do. Direct payments and counter cyclicals will be under attack and likely crop insurance will be offered up to replace the guarantee payments. The kitchen table and the board room table are two different places for a reason.
Farming has 3 golden times in the last 100 years (1) during the 1910's (when the US fed Europe as Europe shot each other into the stone ages), (2) during World War II (when every body wanted to be like Europe and shot everything back into the stone ages) and the period thereafter and (3) during the mid 1970's (again when our competitors abroad couldn't meet the demand). Drive through the country and look at when houses were built. Lots of 1915 builds still dot the country side, with plenty of post World War II expansions and 1970's ranch style houses. Coincidence, I think not.
Perhaps another set of good times happened from 2008-2012 Number crunchers indicate that for the period 2002-2012 years indicate that farmers have had the best overall profitability over the those three years
Good times are defined by the lack of good times that follow. If we are in a good time, it is important for agriculture business operators to take advantage and prepare for the bad that follows.
So how does a farmer operator behave like a business operator? Acknowledge the elements you need to be successful, assemble those elements and place them into action.
Acknowledge that you must consider management of revenues, farm input costs and your interest rate management. These will need to be balanced. Obsessing over one will hurt the other two. Getting a handle on costs of production will help you make sales decisions that are rationally based, not emotionally based on who has the best bragging rights at the Co-op.
Another item to watch is your repayment capacity. This is calculated by taking your net farm income adding non-farm income plus depreciation and interest expense on long-term debt and capital leases. From this total, subtract long-term debt and capital lease payments, net cash incurred for equipment purchases required annually and family living expenses. This math formula this tells you how liquid you are for this year and the upcoming year. If this ratio is less than 1, you will have liquidity problems. It should be greater than 1.5 to 1 to be comfortable and above 2 will give the liquidity to expand, etc. Knowing this will take a lot of drama out of going to see the banker.
Time and time again I here business clients who are concerned about protecting their rights to collect against a customer by being concerned that “it might offend them.” Liens are a perfect example of this.
Under recent Iowa Law, contractors who work on residential structures need to file a notice of commencement of work with the Secretary of State. This notice puts the lender, the home owner and anybody else working on the project that work has begun. This is important as failure to file this notice will prevent a contractor from placing a lien against the finished product. While very few people would be offended by a bank telling them they need a lien (which is what a mortgage is) against your property to make sure you pay as promised, contractors are concerned that those same property owners will have their dander up about a potential lien filing by a contractor.
It isn’t limited to just contractors. If a farm operator custom feeds for a third party owner, that feeder has a right to file a lien to ensure payment. The lien must be filed with in so many days of the livestock arriving at the property or the lien is not enforceable. Again, the producer sometimes shy’s away from protecting its rights to be paid by the owner of the animals for fear of offending. Feed suppliers can also file a lien to make sure that the feed provided to the livestock is paid back to the party delivering the feed on credit. Failure to protect yourself as a contract feeder or a feed supplier for fear of offending the customer may result in the t rather offensive outcome of being “out of the money” when the customer files for bankruptcy or other wise doesn’t have enough money to pay all the creditors.
Sumner, Iowa Attorney practicing in Iowa primarily in Ag Law, Bankruptcy, Estate Planning, Real Estate Law, Family Law & Criminal Defense. Lawyers at the Dillon Law P.C. are dedicated to serve Iowa, including but not limited to the cities of Allison, Charles City, Cresco, Decorah, Des Moines, Dubuque, Elkader, Grundy Center, Independence, Manchester, New Hampton, Waterloo, Waverly, Waukon, West Union & Vinton, and the communities that make up Allamakee, Benton, Black Hawk, Bremer, Buchanan, Butler, Chickasaw, Clayton, Delaware, Dubuque, Fayette, Floyd, Grundy, Howard, Polk, Winneshiek, counties. © 2019 Dillon Law P.C. Sumner Location | 209 E. 1st Street, Sumner, IA 50674 Directions Volga City Location | 502 Washington St, Volga City, IA, 52077. We are there most Fridays 10-3 and by appointment. Directions Telephone: (563) 578-1850 Email: email@example.com Home | Attorneys | Blog | Ag Law | Bankruptcy | Estate Planning | Real Estate Law | Family Law | Criminal Defense | Contact | Iowa Ag Law Attorney Sumner Taxation Commercial Transactions Production Contracts Labor Hobby Farm Liability Bremer Fayette County Lawyer