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Iowa Ag Lawyer|Do you have that in writing

Published October 20th, 2011 in NE Iowa Farmer Articles | No Comments »

NE Iowa Farmer OCt 2011

Do you have that in Writing

In each of these cases reviewed below, having it in writing was central to the case. Sometimes a writing is good enough and some times it isn’t worth the paper it is printed on. Stopping to think about whether or not a “handshake” will hold up in a dispute is worth the time and effort it takes.

Collect the data or don’t collect the reward

Using grid soil sampling and yield monitoring is the industry standard for modern farming. Consider all the ways you can establish your yield. Monitors, weigh wagons, grain warehouse receipts, scale tickets. A farmer filed suit against a Cooperative for impaired crop due to lack of proper spraying. The farmer had no yield records to support his claim. This farmer apparently had no records to support his yield claim and yet demanded compensation. It is a true stretch in those cases to get anywhere. The farmer learned that the hard way. The lesson is to invest in your operation and ensure you have accurate data, especially if you think you are going to have a loss based on some one else’s misconduct.

Sometimes, a handshake agreement just leads to being slapped. An older farmer agreed to help a young farmer with access to land and equipment. The older farmer allowed the young farmer to trade the older equipment off on newer equipment. Nothing was documented or written down. The relationship went south and the young farmer left with all of the shiny new equipment. The older farmer sued for theft of the equipment. The court found that ownership wasn’t clearly proven and the young farmer retained ownership of the equipment.

Parental Releases

In a recent case, parents signed a field trip release, holding the school harmless for negligence. During the trip, a child was hit by a car and the parents filed suit. The supreme court indicated that the pre injury release for was void and allowed the suit to proceed. For those farm operations that have orchard tours, corn mazes, and like, it would appear that requesting parents to sign releases for their children is not going to be adequate protection. This is because the courts are adopting the concept that parent’s cannot waive their children’s claims, the children would have do to that. But since children are insane, they would need to have a guardian appointed to them to help them make the decision on whether to waive or not. Guardian ad litems are appointed by the court. Insurance policies drafted against the risk seem to be a much better option.

Bad Drafting Bad Result

An estate plan called for the farm property to be left to an LLC and then the LLC had instructions to pass out membership interests to various heirs. The LLC had to pay inheritance tax on the transfer. If the will had left the property to the children directly or left membership interests of the LLC to the children, no tax would have been due. This failure to consider all angles is why using off the self products like do it your self wills or legal zoom can lead to unplanned for disaster. And when the disaster hits, suing the box the software came in or the website your received “legal help at your direction” is not likely to fix the problem.

In these cases, the outcome could have been avoiding by proper documentation. Investing in a consult with a Iowa ag lawyer when the farmer suspected crop loss would have helped him gather the right data. When the two farmers formed a plan to transition from the elder farmer to the next, investing in a written plan would have been far cheaper than the legal fees that resulted. The parental release ruling would be hard to anticipate without talking to a Iowa lawyer who is following those types of cases, as the outcome goes against what our “common sense” says the result would be. In the estate case, it is apparent that lack of investing in a Iowa agricultural attorney who understands the area of the law you are working with can have terrible outcomes.

FENCE LAW

The law in Iowa is that a farmer has the responsibility to fence in livestock, but if an animal escapes because of poor fencing by the neighbors, the neighbors can’t recover. If the animal’s owner has the poor fence, he is the responsible party. Taking time to inspect your fence (and note it in a journal) is a good plan for livestock owners.

A land owner, even one that doesn’t own livestock, can be compelled to erect fence upon written request of an adjacent owner. Also, a land owner can be made to build or maintain a fence on ground where fencing agreement is in place. A written fencing agreement is the best and where that doesn’t work, the owner can request an order from township trustees. The township trustees will order the fence equally regardless of who benefits most from the fence’s installation.

A legal fence is

3 rails (10 feet apart for posts);

3 boards (six inches wide and 3/4in thick posts no more than 8 feet apart) ;

high tensile wire (4 parallel, coated, steel, smooth ASTM wire not more than 2 rods apart and at least 40 inches high)

three barbed wires (36 iron barbs of two points each or 26 barbs of 4 points, no more than 2 rods apart, 2 stays between posts or 1 rod apart without stays top wire between 48-54 inches);

four wires 2 smooth and two of 25 barbs, 4 points each, 2 rods apart, 2 stays between posts or 1 rod apart without stays )

with all having not more than 20 inches or less than 16 inches from the lowest run to the ground and top run between 48-54 inches)

A tight fence requires the addition of woven wire to restrain sheep and swine with posts not more than 20 feet apart.

If livestock escape 3 times in a 12 month period and trespass on the same landowner, the land owner can make a request to compel that animal owner to make a fence. If the complaining land owner is a neighboring landowner, the complaint may result in the complaining landowner having to put up fence as well.

Ag law is a complicated issue and has many facets.

Iowa Ag Lawyer|Drifting Along

Published October 4th, 2011 in NE Iowa Farmer Articles | No Comments »

NE Iowa Farmer Sep 2011

Drifting along

Pesticide overspray drift may now qualify as a trespass in Minnesota. . The ruling allows neighbors to file trespass claims against spray applicators for any damages the neighbor believes a spray product caused.

Organic farmers, the Johnsons, sued Paynesville Farmers Union Cooperative Oil Company (PFUC) claiming that PFUC’s spray pesticide and herbicide applications drifted onto the Johnsons’ cropped fields and caused damage on occurred on multiple occasions and caused crops to lose their organic certification. That would be a big hit as organic products receive a premium price and generally have lower yields.

While the Johnson’s lost at the trial level on appeal, the court allowed them to proceed, even though the amount of drift may have been smaller than the tolerance level allowed under organic farming guidelines. Additionally, the court made the distinction between smell particles (which don’t qualify in Minnesota as trespassers) and chemical particles (which now do).

This case reflects the trend of allowing claims against spray applicators for damages resulting from pesticide/herbicide drift, whether under trespass, nuisance, or negligence theories. An Iowa ag lawyer is critical to understanding and defending or bringing these type of cases.

Flying the Friendly Skies… IRS Style

An corporation took a Section 179 deduction for Cessna's $135,000 purchase price. The business owner started taking flying lessons but didn’t hire a pilot. The claim was that the business needed rapid response and delivery services. Section 179 allows taxpayers to deduct in one year a limited some assets that would otherwise have to be capitalized and depreciated. One catch: an asset has to be "placed in service" by year-end to qualify for the deduction. Apparently learning to fly isn’t enough. As the tax court said

“An aircraft cannot be considered ready and available for business use without a suitable pilot to fly it.” No employees or officers held a pilot's license that would have enabled them to use the aircraft. There was no evidence that there were any "stand-by" pilots for the aircraft. .

No pilot, no deduction. Easy enough to apply to your area of business. Change airplane to sprayer and you could have the same result. Of course, having a private pesticide applicator’s license is way cooler than having a pilot’s license. Lawyers with ag background or who are from a farm should be able to steer their clients clear of this type of turbulence.

Details Details Details.

While you may not be able to “beat city hall” , the IRS, with a spreadsheet and a tax payer with ADD like fixation on expenses, can be beat, even if you don’t exactly follow the IRS’s rules.

An employee worked at an auto service franchises with multiple locations. Her job responsibilities: she did whatever the operations manager required. She drove from one of the shops to another in order to attend managers' meetings, check inventory, check paperwork, enroll employees in the company's health insurance plan, and research customer complaints. She used her own automobile to drive between the shops. She wasn't reimbursed by her employer, so she claimed her auto mileage as an unreimbursed employee business expense on Schedule A. She used a computer spreadsheet program to maintain her mileage records. She maintained a mileage log showing the use of her automobile for business purposes. The log shows the beginning and ending location of each trip, the date of the trip, andthe mileage for each trip. She had a deduction of over $6,000 in expenses. It did not show the total mileage or the business purpose of the use of the automobile, which the tax code requires. It would appear that in this case, something is better than nothing. The battles with the IRS never really stop.

Iowa Ag Lawyer|Better Behave

Published October 4th, 2011 in NE Iowa Farmer Articles | 1 Comment »

NE Iowa Farmer Aug 2011

Better behave, IRS is watching Gifts, Santa Claus!

Many people are taking advantage of the change to a $5 million life time per person gift tax credit and despite the carry over basis, assets are being transferred to the next generation before congress changes its mind about the credit. However, any time a gift to one person exceeds $13,000 a year, the giver is supposed to let the federal tax agency know by filing a gift tax return, even if no tax is due. That part seems to be escaping the attention of gift givers and until recently, the IRS.

The IRS has an effort under way to find out about these transactions. According to an agency estimate, between 60% and 90% of transactions that appear to be gifts of property to family members weren’t reported to the IRS,

It’s using land-transfer records from at least 15 states for evidence of omissions and is seeking the records of more states, including the high-priced property states like California.

States that have released information on gift-like transactions to the IRS include Connecticut, Florida, Hawaii, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin. Iowa ag attorneys have been watching the steady climb of land prices, it is no suprise the IRS is as well.

With national magazines like Newsweek and the Wall Street Journal talking about the high price of Iowa farm ground, I wouldn’t be surprised if Iowa is also being targeted. No report on if Santa Claus’s nice list has been subpoenaed yet.

Taxpayers need to be aware that no special exceptions to the rules exist when making a transfer to a family member. If the property is valued at more than $13,000, a gift-tax return must be filed. Even if the transfer falls within a lifetime exemption a reporting requirement still exists. The gift tax return is generally due 15 April of the year following the gift.

For anyone who has already made a gift but has not filed a federal gift-tax return, it is better to file late than not at all. Voluntary disclosure typically works out better than having the gap discovered in an IRS audit. Also, even if the person who gave the property has died, the IRS can collect tax from his or her estate, the person who recieved the gift, and in some cases, the executor. An Iowa ag lawyer deals with estates and land values and is in a position to help you determine if you or your parents have run afoul of this rule.

Iowa Ag Lawyer|As if we dont’ have enough to do

Published July 21st, 2011 in General, NE Iowa Farmer Articles | No Comments »

Published in the NE Iowa Farmer July 2011

As if we don’t have enough to do

The Federal Government wants input on its latest great ideas. The first is a new interpretation of federal trucking regulations, which would require any one hauling grain that, “is ultimately used in interstate commerce,” to be subject to federal regulation. The US Supreme Court long ago decided Interstate Commerce includes farmers growing wheat on his own farm, grinding, and using it on his own farm. The rationale is that since he grinds his own, some other farmer did not get a chance to sell it to him. That is a wide net to cast.

The practical application is that the federal government could regulate (that potentially means Commercial Drivers Licenses, drug tests, physicals, and logbooks) every farmer who hauls grain to an elevator, even if they do not leave the county. I think even the most liberal founding fathers of this country would rise from the dead if this concept prevails. Nothing is more local than food production.

The government would like to impose commercial driver’s regulation on farm vehicles. I understand newer equipment travels farther than Grandpa’s M was ever envisioned to travel over the road. I also acknowledge that the equipment is significantly larger. Yet, I do not see how requiring a CDL to operate farm equipment will improve anything.

My least favorite concept is requiring crop share farmers hauling the landowner’s portion to the elevator to be subject to federal motor carrier operation standards. That would seem to apply even if the crop share tenant is using a tractor and wagon. Consider the folks cruising across the state in RAGBRI this summer. As the Sag Wagons (which are converted school buses) and RV’s roll along the back roads of Iowa, rest assured no regulation is coming their way regarding hours of operation, driver qualification, etc., as the vehicles are, “for recreation,” and therefore not subject to the same standards as the combine would be. This type of action is exactly what Iowa Ag lawyers are all about, identifying the impact of the law as it relates to production agriculture.

Corn Smacks

When I was a kid, one of the forbidden breakfast cereals was “Sugar Smacks.” It was too much of a good thing that early in the morning (I think it was all sugar with a sugar chaser). Fear not, the Senate will not serve Corn Smacks to the ethanol industry. Ethanol provides too much locally controlled, renewable fuel supply for the country. America’s Nanny, the Senate, is leading the charge on eliminating subsidies for the growing ethanol industry. They wouldn’t want us to get too used to the idea of having our own, homegrown fuel supply. Ethanol only utilizes less than 2% of the world grain supply on 3% of the available acres. Funny, it was an oil state Senator who sponsored the idea and the gargantuan oil subsidies our government authorizes were not up for review. It appears the house will not follow suit. The house has, however, began to chip away at the Ag budget for the upcoming fiscal year.

Tax Breaks

Under Section 179 of the Internal Revenue code, the amount of depreciation expense a business can turn from a long term, slowly expense into an upfront, first year expense remains at high levels. For tax year 2011, this amount is $500,000. In addition, bonus depreciation (letting you take up to another 50% in upfront expenses) is available for 2011 tax year. While it seems like a long way away, operations are now 50% done. For the calendar basis taxpayer, getting an estimate on where your operation stands prior to the crunch at the end of the year is never a bad idea. The IRS is full of good ideas on how to prevent you from taking deductions

Vetting the Vet case

Published March 16th, 2011 in General, NE Iowa Farmer Articles | No Comments »

Vetting the Veterinarian Case

NE Iowa Farmer March 2011

It is easier to use a vet you trust or find somebody who can give you a referral to a good vet than it is to sue a poorly performing vet. If the animal is valuable enough to sue over, insure it. When considering a lawsuit against a veterinarian, here are some things you should consider:

Veterinary malpractice cases are difficult for plaintiffs for two main reasons:

1) It is hard to find a veterinarian who will testify against another veterinarian; and

2) Animals are personal property. You usually cannot recover pain & suffering or damages based on the sentimental value. That takes the wind out of most plaintiffs’ cases right away.

The burden of proof in a veterinary malpractice action is always on the plaintiff.

The plaintiff must prove:

1) A veterinarian’s acts or omissions failed to meet the standard of care;

2) Acts or omissions were negligently performed;

3) Negligently performed acts or injuries caused the animal’s injury or death; and

4) As a result, the plaintiff was damaged.

The professional duty of a veterinarian usually begins with obtaining a history of the animal (which assistants can be used to develop) and a physical examination. The veterinarian is required to use professional leaning, skill, and care, beginning with the initial contact, the diagnosis of the problem, the decision and execution of treatment and follow-up care.

In obtaining permission for treatment, there should be disclosure of the risk of the treatment or drugs. However, in one case where a horse died within fifteen minutes of being injected with a drug, the court held that there was no duty to disclose or warn when the odds of a lethal out come were 1 in 25,000. I think people bet on horses to win races with worse odds.

For example, Vet uses a “punch" test rather than a rectal test during a preg check. The owner sold the cow for $170, rather than the $550. The issue was not whether the method of exam was done properly, but whether the appropriate test was used

Also, you have to proof the act caused the injury or death. If you are calling a vet, the animal is likely sick already. You have to establish that the vet’s act is the reason for the injury or death, not just that the steer died when the vet gave it a shot.

For example, Vet mixes the lye and P&G soap wrong, treats dogs and dog die. Sheep dipped incorrectly and die. Vet loses in both the cases, as the act was done incorrectly.

Some of the other considerations against vets may include

1. Res ipsa loquitur. Some mistakes are so obvious that the average person can make an informed judgment. I was taught in law school that if you are arguing Res ipsa case for the injured party, you are arguing a loser.

2. Administrative Action for Malpractice. A person may file an action against a veterinarian with the state administrative licensing board that oversees veterinarians.

3. Negligence. If the actions in question are not within the realm of malpractice, then there may be common negligence. For example, if a veterinarian was overseeing the loading of a bull into a head gate and did not properly secure the head gate, the standard of care is that of negligence, not a professional malpractice claim.

4. Gross negligence. If a dog came in for a treatment for heartworm check up, and the veterinarian removed a lung that would be gross negligence. A claim of gross negligence may support different kinds of damage awards, but it just doesn’t happen a lot. Again, super hard to prove and hard to find a plaintiff’s lawyer willing to take that on.

5. Intentional and negligent infliction of emotional distress (on the owner). This may arise when the actions (against an animal) are intentional and likely to produce a strong reaction in the owner. Iowa hardly recognizes it for people; I think it is a non starter for animal cases.

6. Duties of bailee. When a veterinarian boards animals they are acting as a “bailee” of an animal then legal liability may arise either out of negligent care of the animal or failure to redeliver the animal to the owner. This is like when you give your coat to coat check, you aren’t giving the coat away and you expect to be returned in about the same condition that you gave it to them. In one case, an insured veterinarian was bailee of an elephant “Sparkle”, who died from poison while in his custody. A claim based upon a bailment does not require an expert witness.

7. Violation of a contract obligation. This may be a useful approach if there is a written contract. However, oral agreements may also constitute a contract but are harder to prove. A contract claim can not be based on general statements of reassurance, i.e. "I will take good care of Sounder." Rather, it must be a specific promise to do something or obtain a specific result. Again you are limited on damages.

A deleterious duo The IRS and the FSA working together

Published November 13th, 2010 in General, NE Iowa Farmer Articles | No Comments »

Published in the NE Iowa Farmer Oct 2010

The Farm Service Agency programs require that certain programs and benefits to farmers end when adjusted gross income exceeds a certain amount. In order to make sure that the recipients of farm programs don’t exceed those amounts, farm producers are required to fill out a FSA form (927 or 928 depending on entity selection) and then send the FSA form to the IRS for verification that what the producers says is what is true. These forms were to be in to the IRS by June 2010.

Sounds easy enough. However, the IRS has its own mountain of forms and sending it a form from another Government agency apparently causes problems. The IRS, in some instances, apparently didn’t know how to process these submissions. That generated a reminder letter to a number of producers to resubmit the forms or have program payments withheld.

That doesn’t encourage me for the future. The IRS has its own short staff and budget issues and now is being required to take on an additional task. The concern I have is how much detail they will pay to the submission. The submission is to verify that the producer has less than a certain income level, in many cases the producer is married. The limit is on the individuals adjusted gross income. In cases, it may be possible that each individual is eligible, but if lumped together with their spouse, they are over the AGI limit. Unless more than a passing glance is made at the submission, producers may be forced to unnecessarily produce records or pay the tax preparer to demonstrate that infact, the producer is under the limit. That takes the producers time and money away from them.

It reminds me of another recent waste of producer’s money. The Vera Sun bankruptcy trustee’s attempt to “shake down” corn suppliers for money it had no right to ask for. While the attempt was ultimately abandoned as to corn producers, it cost the producers time and money in legal fees that otherwise they would not have incurred.

Timing is everything.

A staple of estate planning for the farm business enterprise includes the use of Limited liability companies, corporations and partnerships. This allows transfer of partial interests in farm operations, sets up rules for how the next generation get along and may provide some tax benefits. However, done incorrectly, it may cause a significant tax issue, one that “Legal Zoom” and other “do it your self LLC” kits sold on the internet likely won’t identify.

Recently, the IRS was successful in challenging a tax return of a farm couple During the year they transferred of the farm operation to a corporation. While the couple set up a corporation, they failed to deed the property over to the corporation or make the farm program payments payable to the corporation. After they received the payments in their own name, they transferred the funds to the corporate account. On their taxes, they claimed the income under their own operation and then claimed an expense for transferring it to the corporation, reducing the self employment tax to under $500 for $250,000 of gross income. They followed that with a corporate income tax filing showing the income and off setting it with the following years expenses.

The IRS was successful in establishing that the farm couple really owed self employment tax on the funds, and was able to raise the liability to in excess of $28,000 plus an accuracy related penalty.

Had the couple established the corporation and accurately transferred the land and the government payments to the corporation prior to receiving the funds, a different result may have been achieved.

NE Farmer.. July 08 Wind Energy.. Watch Out or You Might be Blown Away

Published September 8th, 2008 in General, NE Iowa Farmer Articles | No Comments »

Wind energy easements or leases are increasingly seeping into the state. While Northeast Iowa has not traditionally had “Good Wind”, as technology increase, the ability to find “Good Wind” seems to be increasing.

Not all wind energy agreements are created equally. Some energy companies insist on privacy and attempt to keep neighbors in the same “wind farm” in the dark as to each other’s compensation plans. Other’s are pro power company, with little rights being reserved for the land owner to respond to future changes in use and pricing of wind energy. I find it interesting that if we were talking about newly discovered oil, like the farmers in North Dakota, the conversation would be around royalties generated for the resource harvested. Some winder easements do not take that approach. Rather, they would pay a set amount per year for the use of the land regardless of its production capacity. A fixed sum may be more palatable for some if they are concerned about the production capability and desire for a steady cash flow from the project.

A way to handle this is to obtain a copy of the Power Purchase Agreement the wind company has established with the electric company. This will have the electrical sale rate and the estimated production capability. An inflation factors should be built into any kind of fixed payment arrangement.

Who gets the second source of revenue from a wind project is some times over looked. The wind production creates value, but also the Renewable Energy Credits (REC) have value that a land owner should be aware of. In some cases, the power is sold to one source and the REC is sold to another company altogether. That company may need the REC to offset the non-renewable energy it is creating from power production plants. As renewable energy credits become more valuable as federal and state laws increase in this area, these portions of the lease should not be ignored.

The length of the lease should be addressed, as most leases are for a period of 20 years or longer. Some I have sent attempted to reach into perpetuity. Making land use decisions now may have a long term impact on you or your heir’s ability to make profitable use of the land in later years.

Just who the energy company is behind the project should be considered. For example, a national company like Florida Power and Light will not likely have a significant impact on the local economy, as the profits from the wind generation will flow its share holders. Some communities have created locally-owned wind projects as a way to hold onto the value added resource of wind production dollars as a way to hold value added resources of wind production dollars within the community. For some, this distinction may be critical in decisions regarding what company to sign with.

Conditions of use should be examined. Like a lot of things in life, location is key. Look to the agreement to see if the power company has any duty to actually put up a tower or is it simply locking out competitors from entering an area. A hard fought right to a percentage of the production generated is not worth anything if no duty to actually produce wind energy exists.

A well drafted agreement may contemplate many different types of easements, some lasting the length of the agreement and some temporary. For example, the agreement may contain a defined area for constructions easement area that is different than the end use of area once the tower is established. Consider the space needed to erect the tower versus its operation. Also, access to and from the tower, and whose responsibilities is to provide the same are important areas to review.

Who pays for property taxes on the newly constructed site, what impact does the wind tower have on the use of remaining ground (building restrictions and CRP eligibility come to mind), choice of law and venue, (where you can sue to enforce your rights and what state’s law apply) and what happens when the site is abandoned, destroyed by mother nature or acts of negligence or sabotage should be reviewed. This list is not exhaustive of the elements that should be considered when entering a leas arrangement with a power production company.

This article was possible after collaboration with a good friend and colleague of mine, Trent Hilding, Agricultural and Rural Advocates, Edmore, MI.

Recent Case Law Impacts Rural Iowa

Published August 19th, 2008 in General, NE Iowa Farmer Articles | No Comments »

NE Farmer Aug 08

Recent Case Law that impacts Rural Iowa

Retailers get to wag the tail

A case between two national credit card companies has an impact on Iowa farmers and the costs of inputs to their crops. The case essentially limited Iowan’s rights to bring Anti-Trust actions against companies that collude and price fix. The court ruled that in order to bring suit, the complaining party must have a direct connection to the company that they are complaining about.

The connection to ag doesn’t jump right out at you, however it is clear. The food industry is comprised of a chain of handlers. The links of those chains have become concentrated in recent years (for example, 4 meat packing companies control the lions share of the fresh commercial kill). As the each step of the food industry has fewer competitiors, the ability to install kick backs, artificial price hikes and the like increase. These costs are passed on to the consumer. Consider the scenario where farmer sells beef to a cattle buyer who sells the cattle to a butcher who then sells the boxed beef to a big box retain store. If the big box can force the price down because its size, the price of beef will drop. The cattle buyer doesn’t care, as he will likely, as always, live on the margin. The cattle farmer is the one who suffers. But, under the courts ruling, the farmer can’t go after the big box store.

Pollution Exclusion in insurance

An insurance policy that excluded claims coming from pollution was found not to be responsible for carbon monoxide fumes generated in a hog facility that killed an employee. The hog facility had argued that carbon monoxide coming from the propane power washer was a traditional source of environmental hazard and should have covered the wrongful death claim. The court found that under Iowa law, for the limited purpose of insurance policy, carbon monoxide was a pollutant, and therefore the insurance company was not required to pay. This ruling is at odds with what the Illinois Supreme Court found, which was that carbon monoxide from an industrial setting was different from carbon monoxide from a malfunctioning residential heater. The ruling was not suprising as it came from the Iowa Supreme Court. One Iowa Supreme Court justice, whose last ruling involving the pork industry, while in favor of hog farmers in a technical sense, started with the sentence “Hogs Stink”. I think the environmental movement will lean hard on this toe hold to define hog buildings as “Polluters” and an interpreting insurance company will attempt to construe other sources of carbon monoxide poisoning as excludable events as “Pollution.”

Fence Law

If fencing agreements are reduced to writing and recorded at the court house, it can become binding on future owners of the land. Also, after the trustee’s fees and clerk fees are set, the responsible landowner must take actions to repair the fence. If not done timely, the other land owner can deposit the money for the repair with the clerk and complete the work. The costs will then be taken from the responsible owner when taxes are collected. Not a fast process in the least bit. These developments in the law prove that good fences make good neighbors.

NE Farmer Jun 08

Published June 5th, 2008 in General, NE Iowa Farmer Articles | No Comments »

Food Bill I mean Farm Bill Provisions

Finally, the “Farm Bill” looks to be in the books (mostly). The lions share of the bill goes to fund food stamps and “food security” programs, not a direct line of support to production agriculture. This allocation to food related issues ensured the “urban vote” to override the president’s veto. As it was widely reported, the house forgot a section of the bill they presented to the President, so one of the 14 titles will not be enacted until it has its own veto and override vote after the latest Congressional break.

Some of the key provisions that did get enacted include allowing for meat that has been past state level inspection to be shipped between states. Country of Origin labeling has been tweaked. Under the new rules, A label that say A product of the U.S is a product that derived “exclusively from an animal that is exclusively born, raised and slaughtered in the United States.” Other categories include Products of the United States and (Foreign Country), such as an animal born in Canada and fed out in the US and Product of (Foreign Country), which would be meat products imported from another country. The regulations saying how big and where the print will be on the meat have not been established. I would think that food manufactures will use this requirement has a chance to increase prices yet again and then blame the government. The only other way to offset the cost of compliance with the program is to not pay as much for the meat.

Under COOL, producers are required to Provide enough information to verify the origin and ownership of the animals. Such sources of information may include “Birth records, receiving records, purchase records, cow/calf tag ID system, sales receipts, feed bills, feeding records, animal inventory, acreage inventory, site maps, APHIS VS forms, production estimates, health records, ownership records, segregation plan, state brand requirements, replacement activities, beef quality program (BQA), breeding stock information.

The calendar that producers keep track of date of birth of new calves would probably also work, so long as you can identify the calf as it grows. Purchaser’s of feeders from other sources may want to require affidavits of identity in order to ensure a good paper trail. These requirements do not take place until September 2008, I am sure the various industry groups will have a busy summer working out the kinks in the records keeping requirements.

The Blender’s credit for ethanol is reduced by 6 cents per gallon in 2009. This is the incentive to have the oil companies include ethanol blended into their fuel products. I don’t think this was a wise move.

In Conservation, EQUIP receives plenty of money to help livestock producers meet regulations regarding facilities and a target of 80 million acres in the Conservation Stewardship (Security) Program and a 1.1 billion dollar funding level.

Commodities

ACRE Program (Average Crop Revenue Election). This program will allow the producer to go to another form of legalized gambling. In exchange for a 20% reduction in the direct payments (as the program currently works) and 30% reduction in loan rates, the producer can have a state level counter cyclical program based on average yields and price for the previous two years. It adds risk as the averages will move and once signed up the producer cannot return to the previous payment methodology.

And in Disaster assistance, a permanent source of funding was established. This makes sense, as when the disasters occur, legislation gets pasted to fund relief, yet sometime it takes upwards of two years for the relief. Furthermore, the ad hoc relief bills are a prime vehicle to tack on unrelated, pork barrel spending projects that have nothing to do with the disaster relief.

Syngenta and Monsanto Cease Fire

A long standing litigation battle between Syngenta and Monsanto appears to be over. The companies various patent, anti trust and commercial litigation issues. The companies have battled about herbicide tolerant corn, insect tolerant corn and patent infringement on soybean traits. Syngenta will get a Round UP 2 soybean license and information between the two companies will be shared.

NE IA Farmer May 08 Food, Fuel and Fratricide

Published May 14th, 2008 in General, NE Iowa Farmer Articles | No Comments »

May 08 NE IA Farmer

Food, Fuel and Fratricide

Fratricide is traditionally defined as killing your brother or sister or a countrymen that you have a brother or sister like relationship with. In the Army, it is technical term to describe “friendly-fire” incidents where you don’t need help from the enemy getting shot, your own countrymen shoot you.

We, as a nation, appear to be dead set on committing fratricide on the agricultural industry. Yes, food prices have gone up. Yes, commodity prices have gone up. It is a simple leap to blame the price of a raw commodity (corn, soybeans, milk, etc) for the increase in the end products price (cornflakes, mayonnaise, ice cream). However, it is fools logic. I expect and am prepared for citizens of the left coast (West coast that is) and the East coast to blame those pesky farmers in the “fly over states”(everywhere in the middle of America that the alleged elite never visit, just fly over on their trips from coast to coast). However, I am shocked and disappointed when educated members of the Midwest begin to blame ethanol for all that is wrong in the world. I am disappointed to report that a long time friend, who while not raised on a farm, grew up in north ast Iowa, was spewing anti farm and anti bio fuels rhetoric lately.

While there are three types of lies in this world (Lies, Damn Lies and Statistics), I think the following facts are of interest. 44% of the food costs comes from in fuel and transportation. Most food travels (up to 1500 miles) from production point to the dinner plate. Gas and oil companies are reporting record profits in the history of business. Oil, per barrel, continues to set new highs ($35 per barrel in 2005 to $124 per barrel in 2008). Speculation funds presence in the commodity markets has increased volatility tremendously, which makes it hard to make margin calls for small sized farmers when using markets to capture price gains and avoid risk. Input costs such as fertilizer (up 100% in cost), anhydrous (up 20%) and fuel (up 36% in cost) have take a large bite out of the commodity producers profit margin. We spend about 10 percent of every dollar on food. This is a very low number. We use 25% of the worlds oil supply, and control only 2%. Biofuels could meet the demand for present food production requirements and supply upto 1/3d of that 25%. Currently, it is estimated that 30 cents per gallon is saved by the bio fuels position in today’s fuel market.

Yet, agriculture is being targeted by various US politicians as the source of all that is wrong. That it fails to make any sense why we are taking a pot shot at one of the few resources we have to impact the cost of fuel in this country, bio fuels. I remember a quote from the previous California Governor, Gray Davis, who was trying to obtain a wavier from the EPA to allow California to avoid adding ethanol to its fuel. The quote went something like “We don’t want to be held hostage to a Midwest Corn cabal.” Apparently, paying the middle east and south American OPEC cabal is preferable. More recently, Texas is trying to avoid meeting the renewable fuel standards for similar nonsense arguments.

The allegations regarding a world wide food shortage are also being played up to attack farmers. The reality is that we can move food wherever logistically we want to, political decisions are the true reason hunger exists. Look no farther than Mynanmar, aka Burma, for a stark example of where a political agenda is placed far ahead of basic human needs. Another case of Fratricide

And finally, on a different note, the Farm Bill continues to drag on. If Congress was out on a date with the farm bill, it is well past curfew and perhaps even the sun is rising on the next day. Senator Grassley’s ban on packer ownership of livestock has been stripped out again to the detriment of small farmers and free markets and to the benefit of consolidated big meat concerns. Ethanol tax breaks to the oil companies who blend the product have been reduced. The President is still threatening a veto because of high subsidies, but the southern Senators will not soon be divorced from the subsided payments their rice, cotton, peanut and sugar beat farmers have come to depend upon.