US drought footprint continues to shrink

by Brad Rippey, USDA Meteorologist

3-4-16 Drought Monitor

During the 4-week period ending on March 1, 2016, contiguous U.S. drought coverage fell to 14.30 percent—a decrease of 1.18 percentage points.  This also represents the smallest areal coverage of U.S. drought in nearly 5½ years, since October 12, 2010.  The U.S. drought minimum of 2010—7.74 percent coverage on July 6—occurred in the wake of the most recently completed El Niño, which lasted from the summer of 2009 to the spring of 2010. Since mid-October 2015, stormy weather in many parts of the country—in part driven by a strong El Niño—has significantly reduced the U.S. drought footprint from 34.78 to 14.30 percent—a drop of 20.48 percentage points. In February, however, disappointingly dry weather covered much of the West.  For example, the average water content of the high-elevation Sierra Nevada snowpack was nearly steady during February at 20 to 22 inches, with few storms hitting key watershed areas.  Since February is typically an important month for Sierra Nevada snow pack accumulation, the percent of average snow pack dropped from about 115 percent of average on February 1 to just 85 percent by month’s end. READ MORE…

1031 Exchange Trends for 2016

From the 1031 Insider Newsletter, IPX Investment Property Exchange Services, Inc. January, 2016

FIRPTA – What the Change to FIRPTA Withholding Means for You
Under current federal law, if a foreign person sells US real property, the buyer is obligated to withhold 10% of the gross sales price and remit this to the IRS. Pursuant to the Protecting Americans from Tax Hikes Act of 2015, however, which became law on December 18, 2015 (the “PATH Act”), the required 10% withholding will increase to 15% for all closings occurring on or after February 16, 2016. There is an exception to the increase for sales of a personal residence wherein the sales price is between $300,001 and $1,000,000. Under this circumstance, the 10% withholding rate continues to apply. In summary:

If the sales price is $300,000 or less AND the buyer will use as a personal residence – No change, exempt from withholding.
For all other real estate sales the buyer must withhold 15% of the sales price of the real estate (10% if a personal residence with a sale price between $300,001 and $1,000,000) and send it to the IRS within 20 days after the date of transfer.

1031 Tax Reform Update
The most important news for the Section 1031 community coming out of the year-end tax and budget bills was the absence of any mention of §1031 as a “pay-for” for any of the expenditures in those bills. These are expensive bills, so non-mention of §1031 is a big win for all of us that have been so engaged in the campaign to increase the level of awareness that like-kind exchanges are not a loop-hole, but rather an important economic stimulator. Our major concern has been, and continues to be, that elimination of §1031 may be cherry-picked to pay for reduced tax rates and other governmental costs.


CRP Enrollment Deadline

The most current general enrollment for the Conservation Reserve Program began December 1, 2015. Enrollment will run thru February 26, 2016.  According to the  USDA, “as of September, 2015. 24.2 million acres were enrolled in CRP.  CRP is also protecting 170,000 stream miles with riparian forest and grass buffers, enough to go around the world 7 times.”  Check out the USDA’s Celebrating 30 Years of the Conservation Reserve Program.

It Is Not About Your Equity

by Peter Martin |

Like most farmers, the bulk of your net worth is likely in the equity of your ground. But you might have discovered a “land rich” net worth, even a sizeable one, doesn’t assure banks will approve a loan renewal.

Generally speaking, ag lenders are cash-flow lenders. Like you, they don’t like low commodity prices. While your net worth is important to them, they’re far more interested in a positive cash flow that allows loan payments to be made as agreed. That’s not easy today. Many of you are struggling to pencil out a breakeven, let alone a profit. And then there are loan payments. As a result, many farmers face troubled loan renewals. Don’t fall for the flawed argument that equity alone will get you through your renewal, but do tout your equity as additional support for your request. READ MORE

Texas Blizzard Impact Will Bring Total to 40,000 Lost Southwest Dairy Cattle By Lucas Sjostrom

“Keep ‘em in your prayers,” asked Darren Turley, executive director of the Texas Association of Dairymen on Thursday. He was referring to the Southwest dairies suffering from Winter Storm Goliath.

Four days after what is possibly the worst storm on record for cattle in the area, operations are returning to normal. The storm rolled into the Clovis, N.M., and Lubbock, Texas, region Saturday evening and was gone by Monday morning.

But the 22” inches of snow paired with wind gusts, some reaching over 60 miles per hour, was too much for many cattle, and proved impossible for some dairies to continue operating at the time. The uncharacteristic weather was to the extreme for the High Plains region.

Turley said one area farmer recalled that he was in his 34th year of dairying there, and occasionally started milking late due to weather, but never missed one. Last weekend, that farmer missed 1.5 days of milking. Turley said many farms missed one or more milkings on Sunday, with some also missing Saturday evening or Monday morning.

At some locations, the National Guard came in to shut down roads, ensuring no milk was moved from one area to another. Turley expects a small bump in price due to a lack of milk and cheese being delivered, but losses from storm deaths, lingering health issues, and future losses – potentially big as snow melts and makes for muddy conditions – will be far greater.


EPA Raises Renewable Fuel Requirements

EPA Raises Renewable Fuel Requirements

Agriculture, ethanol industry welcome certainty of final rule, but say required volume is too low.
After years of delays, EPA on Monday finally released the renewable fuel standards for 2014, 2015, and most importantly, 2016.

The rule calls for a total of 18.11 billion gallons of renewable fuel in 2016, with targeted growth expected in categories such as:

cellulosic biofuel (230 million gallons in 2016).
biomass-based diesel (1.9 billion gallons in 2016 and 2 billion gallons in 2017).
advanced biofuel (3.16 billion gallons in 2016).


Cow vs Car

When your cow takes on a car, what’s your liability?
by Tiffany Dowell Lashmet

It’s a call no cattle owner wants to receive – news that his or her cattle got out onto the roadway and were struck by a vehicle.

Not only is there concern for the driver and disappointment over losing the cow, oftentimes landowners face another question as well: Can liability be imposed for cattle getting onto the roadway? Unfortunately, this is not an uncommon situation for cattle owners across the country.

The answer to this question depends on the law in the cattle owner’s specific area as to whether a duty is imposed on livestock owners to contain their animals.

Most states take the opposite approach, imposing “fence-in” or “closed-range laws.” In these states, landowners generally do owe a duty to act reasonably and non-negligently in keeping livestock from escaping onto roadways.

In states with fence-in laws, legal liability will depend on whether the landowner breached his or her duty to act reasonably under the circumstances.  READ MORE

New Dairy Facility for Littlefield Texas

New Dairy Facility for Littlefield Texas

Note: Eric Turpen is an Associate Broker with Clift Land Brokers. He manages our Littlefield, TX branch office and is currently serving as the Mayor of Littlefield. Eric was instrumental in bringing the new Select Milk Producers facility to his community.

LITTLEFIELD – Select Milk Producers will eventually bring about 150 jobs to this economically-recovering Lamb County town, company representatives said Friday morning.

The Artesia, New Mexico-based dairy foods company has invested $250 million to upgrade and expand the facility just east of town that until January housed the American Cotton Growers denim mill. It’s aiming at a late-summer 2018 opening.

Festive vibes accompanied post-rain chilly temperatures at a conference in front of the building.

“They’ll be a lot of opportunities for a lot of folks in the community. We’re just thrilled to be here,” said Brad Bouma, company chairman and a Plainview dairyman.

The company will process about 4 million pounds of milk — 80 truckloads worth — each day. Staff will convert that raw product into milk powder, butter and certain other dairy products.

But before that, there’s a plant to build. Now in the engineering and design stages, those blueprints include plans for both remodeling existing structures and expanding them. Construction of a 100,000 square feet building-extension and a wastewater treatment system are both on the to-do list.

“It’s a significant undertaking. That’s why it takes a while,” said project manager Mark Boytim. “We’re not just gonna clean this one up — we’re gonna add to it.”

Boytim works for Select Services, a subsidiary. In a system he described as “closed cycle,” the treatment center will create clean water to irrigate crops, which will feed cows.

He added the construction process will employ about 250 people, helping the local economy directly through job creation and indirectly through consumer spending.

“The benefit to the community is they’re gonna spend that paycheck, or the largest part of it, right here in your community. It’s gonna be a big boom.”

Mayor Eric Turpen recalled how Littlefield suffered when its denim mill closed 10 months ago. With 340 residents suddenly out of work, Lamb County’s unemployment rate doubled from 4.5 percent to 9.1 percent within a month. Now, Select Milk Prodcuers’ announcement arrived as a relief.

“We couldn’t be more excited to have Select Milk Producers invest in our community like this,” he said. “Not only will Select’s project create many high-paying job opportunities, but the positive impact on our local school and tax bases is expected to be tremendous.”

Agriculture Commissioner Sid Miller took the podium to congratulate the partnership. As the state’s highest-ranking farm representative, he pointed out the dairy industry’s economical contributions.

“We are a big milk-producing state, and we’re so glad to be here,” he said.