DTN writer Pam Smith reported today that, “Farmers may have had dicamba in their weed arsenal for more than 50 years, but the agronomic tool took a divisive turn in 2017.

“Unprecedented complaints of injury to sensitive crops were recorded across the U.S. during the first full year of the Roundup Ready Xtend Crop System, despite new, lower-volatility dicamba formulations and education campaigns on how to reduce spray drift.

“In October, a survey of Extension weed specialists estimated off-site movement of dicamba had injured 3.6 million acres of soybeans. Officially, there were 2,708 dicamba-related injury cases under investigation by various state departments of agriculture. Included in those cases were complaints that dicamba injured vegetable and fruit crops, trees and homeowner landscapes.”

Ms. Smith explained that, “Many had hoped the long list of complex restrictions the Environmental Protection Agency (EPA) placed on the Engenia, FeXapan and XtendiMax labels would help applicators keep the herbicide on-target. At the same time, the weed science community voiced stern warnings that those labels did nothing to address the inherently volatile nature of dicamba.

“As complaints of cupped and puckered leaves characteristic of dicamba injury started to mount in June and July, states such as Arkansas, Missouri and Tennessee, took action to temporarily restrict or ban applications.”

Today’s DTN article added that, “Who is liable for the loss associated with injury is also adding to the drama — both from the farmer and retailer applicator perspective. Recent issues with dicamba spray drift have highlighted the need for producers to understand third-party liability associated with all herbicide applications, said University of Missouri Extension economist Ray Massey.

“Product labels for 2018 labels also are so restrictive that the window for making legal applications could be very narrow. A Purdue University report during the December North Central Weed Science Society meeting calculated an applicator had 184 hours to spray XtendiMax or FeXapan during June 2017. Using the new 2018 label restrictions, and identical weather patterns, applicators will have only 44 hours to spray next June.

“Some individual states were also taking additional measures beyond federal labels as farmers were headed into seed selection season. In Arkansas, where the dialogue has been most heated, Monsanto and some farmers have been legally pushing for broader market access to dicamba. Legislators agreed in December and kicked a proposal to ban most in-season use back to the Arkansas State Plant Board for further consideration.”

An update posted today at the farmdoc daily blog, “2017 Year End Planning Ideas,” by Dwight Raab, explained that, “With the recent passage of the Tax Cuts and Jobs Act (Congress passed on 12/20; President signed on 12/22) there are significant changes to the deductible amount of state income, property tax and real estate tax used in calculating itemized deductions beginning in tax year 2018. Under the new law, beginning in 2018, there is a $10,000 maximum combined limit of state income, property and real estate tax that may be deducted when itemizing deductions on IRS Form 1040, Schedule A. For 2017, there is no limit on the amount of these expenses. Thus, there are two tax planning opportunities with the potential to allow taxpayers to maximize the amount of these deductions if they take action prior to December 31, 2017. These two planning opportunities are available only to those using Form 1040, Schedule A to itemize certain deductions on their individual income tax return.”

The farmdoc update noted that, “The first planning opportunity involves the advance payment of property and real estate tax on the taxpayers’ personal residence or other personal use property prior to December 31, 2017. This advances payment of these taxes that would normally be paid in 2018 into 2017 and then itemizing them on IRS Form 1040, Schedule A.”

Mr. Raab added that, “The second planning opportunity involves paying any 2017 state income tax due by December 31, 2017 for personal income tax returns due in April 2018.”

Today’s farmdoc update stated that, “This is a ‘one-time’ potential strategy to put in place prior to the $10,000 limit on state income, personal and real estate tax is put in place and don’t forget that the standard deduction increases markedly beginning in 2018 which will make it more difficult to itemize deductions on Schedule A of IRS Form 1040.

“Before utilizing either of these strategies taxpayers should consult their tax advisor. Not all taxpayers will benefit from advancing the payment of these taxes into 2017.”

Associated Press writer Steve Karnowski reported earlier this month that, “A plan to build a large hog feedlot in southeastern Minnesota can move forward, the state Court of Appeals ruled [on December 18th].

“The decision by a three-judge panel affirmed a vote by the Goodhue County Board in February to approve the proposed 4,700-hog operation near Zumbrota.

“Opponents of the Circle K Family Farms project, including the Land Stewardship Project and Zumbrota Township residents, have been fighting it over concerns about odors and what they contend are high levels of toxic hydrogen sulfide at other hog farms in southern Minnesota owned by Jeff Kohlnhofer and his brothers Mike and Yon.”

The AP article stated that, “But the appeals court noted that the Minnesota Pollution Control Agency, after an extensive review, ‘concluded that the project did not pose a risk of potential significant environmental effects.’

“The Court of Appeals concluded that the county approval of a permit for the project ‘was neither unreasonable nor an abuse of discretion.’ The three judges noted that legal precedents obligated them to review the board’s decision ‘with particularly great deference’ and to uphold it ‘so long as its basis has even the slightest validity.'”

Mr. Karnowski added that, “At a news conference in Lakeville, Kristi Rosenquist, of Zumbrota Township, and other opponents said they planned to keep up the pressure on the Kohlnhofer family to drop the plan. They said they tried to deliver 687 postcards to the Kohlnhofer Insurance Agency in Lakeville that were signed by people from around the state, but it was closed so they picketed outside instead.”

An update earlier this week from K·Coe Isom explained that, “The national ag accounting and business advisory firm K·Coe Isom said the tax bill passed by the U.S. House of Representatives today presents opportunities for many farmers but only if they develop plans taking into consideration changes to the tax code.”

The update stated that, “‘In consultation with their tax professional, farmers should consider the following year-end strategies:

1. Defer income to next year and pay deductible expenses this year. Depending on your individual circumstances, you could have lower tax rates in 2018.
2. Pay all assessed 2017 property tax and any likely amount of personal 2017 state income taxes. Note however that payments could be subject to limitations if you are subject to the alternative minimum tax.
3. Make year-end purchases of new and used equipment. Under the tax bill, 100% bonus depreciation starts for property placed in service on or after September 28, 2017. This includes used equipment so there could be advantages to year-end purchases.
4. The ability to carryback net operating losses for farming operations will be reduced from a five year carryback to two years after 2017, so this year will be your last opportunity to recoup some income taxes from five years ago.
5. Make your charitable donations in 2017. If you are going to make charitable donations in 2018, consider making some or all of them in 2017 in case your standard deduction is more beneficial next year.”

The update added that, “In addition to year-end tax planning, K·Coe Isom recommends that businesses take a fresh look at their operations in 2018 and think about whether restructuring or adjusting operations will make sense in light of the changes in this bill.”

An update yesterday from the American Farm Bureau Federation’s Market Intel group indicated that, “The Tax Cuts and Jobs Act (H.R. 1) will deliver modest tax reductions for W-2 earners in the form of modified individual tax brackets, which are included below. The bill attempts to simplify tax preparation for taxpayers by eliminating deductions that impacted a fairly small number of filers and replacing them with a higher standard deduction. In 2017, the standard deduction for a joint return was $12,700. In 2018, the figure will climb to $24,000. In addition, individual rates have been adjusted downward and the brackets expanded so that a larger amount of income is subject to lower rates. Figure 1 compares the 2017 and 2018 individual tables.”

“What Do the Tax Cuts Mean for Farmers and Ranchers?” American Farm Bureau Federation, Market Intel (December 20, 2017).

The AFBF update noted that, “Given that 93 percent of U.S. farms file their taxes through the individual code, these changes are important. However, the business provisions that impact farms, ranches and other pass-through businesses offer the greatest chance of improvement for agriculture.”

Yesterday’s update added that, “The conference bill provides that individuals operating pass-through businesses will be able to take a deduction for 20 percent of their business income through Dec. 31, 2025. This is a small reduction from the Senate bill which would have allowed for a 23 percent deduction. As in the Senate version, the deduction is unlimited below a joint household income, though the threshold of $315,000 in the final bill is significantly lower than the $500,000 threshold in the Senate version.”

The Market Intel update also included a large- detailed table that compares the business provisions of current tax code and the Tax Cuts and Jobs Act; the table can be viewed here.

Teaganne Finn reported today at Bloomberg Government Online that, “Two prominent farm organizations disagree over how the tax bill compromise released by House and Senate lawmakers would affect the agriculture industry.

“The American Farm Bureau Federation, which focuses on making the farming business more profitable, supports the bill’s potential for lower farmer income taxes. But the National Farmers Union, founded by local producers concerned with stability and farm income says the tax cuts could threaten programs like crop insurance in the 2018 farm bill, as lawmakers look to offset the $1.5 trillion that the overhaul would add to the national debt over 10 years.

“The Tax Cuts and Jobs Act (H.R.1) is projected to add $1.455 trillion to the U.S. deficit over the next decade, according to a report released on Dec. 15 by the nonpartisan Congressional Budget Office. CBO says the final bill would reduce U.S. revenue by about $1.649 trillion and decrease outlays by about $194 billion over period from 2018 to 2027.

Ms. Finn stated that, “The bill would provide a 20 percent deduction for owners of pass-through businesses. With the majority of farms structured as pass-throughs, this could ‘help them have more profitable businesses and allow them to immediately deduct expenses,’ Patricia Wolff, tax policy specialist at AFBF, told Bloomberg Government.”

Today’ article added that, “The National Farmers Union’s biggest concern with the bill is the increase to the national debt and the possible cuts to agriculture programs in the next farm bill. The current one is set to expire at the end of the 2018 fiscal year.

“‘I don’t know how the agriculture industry gets better if we have to deal with the deficit,’ Zack Clark, NFU’s director of government relations, told Bloomberg Government.”