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California Proposition 2 enacted Jan 1 abolishes confinement crates for veal and hogs and laying cages for hens.  Their compatriots on the left coast in Washington and Oregon (along with Michigan and Ohio) are considering similar laws. New Jersey’s governor vetoed a similar law in November. This impacts Iowa, just not California. Iowa is the number one producer of eggs, selling about 40 million eggs per day out of state.  Iowa brought a law suit against California asserting that the  California laws violate the federal constitution by favoring instate producers who have to meet the requirement over out of state producers who do not. Iowa lost at the trial court level but has filed an appeal. Starbucks, Burger King and Whole Foods have pledged to not buy eggs from caged laying hens. Combined, the response from the industry is telling. Egg producers have to put fewer hens per cage or reconfigure existing house. Projections are that egg prices will rise 10%-40% as result of this and avian flu issues in Canadian and Mexican flocks.  The hog industry will have similar long term impacts, with several producer groups already moving away from gestation crates.

The implication is clear, social legation and not science based legislation is gaining a foothold in the statehouses of the Union. The hallowed reverence for the farmer is fading, as less than 2% of the population is connected directly to an active Ag operation. The stereotypes of bib overalls,   hand milking cows and putting along on a narrow front tractor with a six foot disk are fading. The question is what is the new stereotype of the farmer? When urban dwellers think of farmers they will either see technology using stewards of animal and natural resources who are vested in their product or they will see miles of confinement pig barns, piles of manure and endless rows of grain crops with no human connection.  When one of these bills come up, who with the legislator think about when casting the vote?  Some commentators believe the only reason New Jersey vetoed the legislation is because of the governors concern of his own presidential run, which of course, runs through Iowa.

Being a better boss primarily requires us to communicate with our employees effectively. Recognizing that the leader and the led are only two portions of the puzzle, the message and the goal must also be considered when developing an effective communication relationship with employees. If you don't communicate the goal, the led will substitute their own goal and when the goals don't match, conflict results.

For example, during the spring, just prior to planting, your employee reports to work a 6 AM as normal, expecting to be gone by 2 PM, as per normal arrangement. The employee tells her husband to plan her to be home to prepare their own equipment for spring planting. However, you have decided to move equipment to your equipment to the field in hopes of calibrating all the electronics so that you can start when the crop insurance planting window opens up. Your goal is to make sure that on the first available day you are running hard, and you view this prep day as critical to get it all done, regardless of time spent. As mid afternoon approaches, two very different sets of expectations are brewing, which could have been avoided by cluing the employee in at the start of the day or beginning of the week on the things you, the employer, wanted accomplished.

The water wars in the weststarted heating up in 2014. The news and "drought shamming" celebrities are late to the party. In Texas in 2014,  farmers, including a 500 acre cotton farmer, were told they did not have access to  the River Brazos for their crop, but did not restrict the use of cities along the river a well, saying public safety trumps water law principles. The same  year in California, a 1200 acre vegetable operation is only going to plant 400 acres because of water reduction.  In Southern Texas, rice farmers have not had water for 4 years, while Austin continues to consume more and more water. In Nevada, the reservoirs are so low, residents talk about "bath tub rings" around the holding lakes, the record low level expose shore and side wall that haven't seen the sun in a long time.
Nevada and Utah are at odds over shipping water across borders, Kansas is not upset at Colorado Nebraska about leaving the Big 12, but rather about diverting water from the Republican  River that is apportioned to Kansas. Texas and New Mexico are in front of the Supreme Court about water usage.

That vegetable farm that is 2/3ds idle won' t have excess produce to donate to local food shelters as it has in past, nor will it employ as many people. Low lakes means low boating numbers, which cuts into tourism dollars. The laws in the Western States are set up to cause conflict. For example, in some states you can pump as much as you want from under your ground , but if your neighbor pumps it out first, you have no recourse absent a court order. When your neighbor is a new sub development with a passion for orderly neat patches of lush Kentucky blue grass, washed cars and golf courses in a desert , it doesn't  take a fortune teller to see what is coming.

The IRS has cooked up a special mix of fun to generate more revenue. First, they have reduced accelerated depreciation limits to $25,000 and Second, have tightened their position on what is a repair (which is a current year expense and what is a capital improvement which has to be deducted over time). It is enough to drive you to drink, which is why it is referred to as the BAR test. (Betterment, adaption and restoration). If the fix does any of those things, it needs to be depreciated out slowly instead in the year incurred. Betterment = fixes a condition or defect that existed before the purchase of the property, is  a material addition to the property; or increases the property's productivity, efficiency, strength, etc. Adaption =a change a new or different use if   of property to a use from what you bought the property for Restoration. =  puts the property back in working order from non function or rebuilds the property to a like new condition or replaces a major component or structure of the property.

Oil Changes, filter changes and the like which happen more than once during the life span of the item are still allowed as current year expenses.
Don't be surprised if your tax preparer asks more questions this year about your repair category. It would appear that with the recent passage of a higher accelerated expense provision, this issue may not be as critical, as a tax payer maybe able to elect to treat what would be BAR repairs as accelerated expenses.

Who wins with crop insurance?

The company's selling the policies sure do. According to a recent white paper: 'As a result of the significant subsidies crop insurance corporations receive, they consistently generate profits that are considered far above the reasonable rate of return as calculated by economic experts. Between 1989 and 2009, crop insurance companies averaged a 17% return on equity at a time when the 'reasonable' rate was under 13%, according to an analysis done for the USDA. In 2009 alone, crop insurers enjoyed an astounding 26% rate of return, more than double what was considered reasonable by the industry standard for that year.'"

Questions to Ask About Your Data Privacy Policy

Mapping via infrared spectrum at the one inch level on a field is technology that is already here. The foreign ag service has been using satellite images to predict competing countries yields for decades. That technology is getting cheaper and easier to acquire for private use. Tractors and combines are routinely in communication with GPS locators and mapping programs as farms become more technically advanced. The data that is captured can be used for many purposes.

Saturday, June 06, 2020
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill Dillon focuses on family law, estate planning and IRS matters. Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill spent extensive time advocating for low income tax payers in front of the IRS and the State of Iowa Department of Revenue while at Drake.

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