10 Lessons I Learned on a Family Farm

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1. Appreciation:
In high school, everyone one says that they are ready to leave this town; however, I can’t wait to come back to my family farm. I want to give back to my family farm. It grew me so much as a person. I learned respect, responsibility, and hard work at a young age. Once you leave the farm you see how different the world is, but you will always have your work ethic to fall back on.

2. Driving:
I was driving anything and everything that my dad would let me drive on the farm. Every experience prepared me for the next. I was always up for the challenge. Looking back, I realized how much confidence I gained through learning to drive and operate machinery.

3. Exercise is Important:
Who needs summer weights when you have 5-gallon buckets? Don’t even get me started on moving livestock. Herding sheep sure feels like guarding a basketball opponent. Those two things alone will get you ready for basketball season more that any weight room.

4. Family is Everything:
Living on a family farm, my family and I spend A LOT of time together. My younger brother and I spend almost every day together doing chores or doing other jobs on the farm. We spend so much time together that we just know each other so well. There are times that we argue while working livestock or when the combine breaks down for the third time in one day, but we know it was from the heat of the moment, all is forgiven, and you keep moving ahead together. Family is the heart of our farm.

5. Nothing Goes According to Plan:
There are days that nothing will go as planned. The ability to be flexible and shift your plans is mandatory. You may make two or three trips to the John Deere dealership because you have broken down several times in one day. You just power through and keep moving forward.

6. There is a Lesson in Everything:
I have learned so many lessons over the years. The Fall of 2018 was a lesson in patience. Harvest was continually delayed because of rain and snow and then more snow. We waited patiently and then helped where we were needed when it was time to harvest again.

Christina Blender7. Animals Become Your Best Friends:
There are many animals that run around on the farm. Whether it is livestock, a dog, or cat, you grow to love all of them. Growing up my family had a farm dog, Shelby. She joined our family when I was a baby, so we grew up together. I will never forget her because we spent many hours together doing everything from shearing sheep to sweeping the shop floors. I may have spent a lot of time by myself on the farm, but I was never truly alone because I always had Shelby there with me.

8. The Cycle of Life:
From a young age, I learned about life and death. It became evident just how precious life is. I have carried cold lambs inside the house and helped them warm up. It is one of the most amazing experiences to watch a newborn lamb get on its feet again. Last year, I had a twin set of Babydoll Southdown rams. They were born on a cold night unexpectedly. When I went to do the night check I found the two tiny ram lambs. They were cold and separated. I put them inside my coat and carried them to the house. My parents and I spent many hours that night nursing them back to health even though there were moments we thought we were going to lose them. We kept the faith, because if you see a glimmer of hope, you can’t give up on them.

9. Passion:
I love my jobs on the farm and I truly believe that I have the best one in the world. I get to see new life come into this world, while taking on the challenge to continue feeding the world. The best part of farming are the days it doesn’t feel like work. I have been truly blessed to grow up on a family farm.

10. Work Ethic:
Rain, snow or shine you have to be ready to work. Sunup to sundown is a way of life. My dad has always worked long days. When we were young my dad would leave early and get home late, my mom would take us to the field to eat lunch with him. Sometimes this was the only time we saw him. My parents gave us responsibility early in life. As we aged, they added more chores and activities that we could manage. There are countless hours in the cab of a tractor or sitting in the lambing barn watching a laboring ewe. These lessons have served me well.

Eliza Hunzeker

 

Eliza Hunzeker is a senior at Pawnee City High School. After graduation, she plans on attending Northwest Missouri State University and majoring in Agronomy. Eliza stays busy working on the family farm and participating in 4-H, FFA, and school activities.

Downsizing Your Stuff Can Be Good Therapy Entering the New Year

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For most of us, losing weight, eating healthier and making more time for ourselves and family, is part of the promise we make as we start off the new year. If you want to make good quality family time, take on the challenge of decluttering your home. It can be good therapy. Not only will sorting through items and moving things around give you a physical workout, it will give you a chance to do some mental decluttering too. Continue reading

Agricultural Land Taxable Values Down . . .

Economic Tidbits 12.18.17

The taxable value on agricultural land declined 2.77 percent in 2018 according to the Nebraska Department of Revenue.  Taxable value for all real property increased 0.96 percent, with residential and recreational property value growing 3.66 percent, and commercial and industrial property growing 6.94 percent. The decline in agricultural land values marks the second consecutive year taxable values have shrunk.  Prior to last year, the taxable value on agricultural land had not declined since at least 1993, and perhaps as far back as the late 1980s.  It may seem like a distant memory, but just three years ago, the taxable value of agricultural land statewide increased almost 20 percent.  Since then, market values for land have declined between 15-20 percent and these declines are now being reflected in taxable values.  Expect taxable values to continue to decline over the next few years due to the lag effect in how taxable values are set.  Values are set using data on sales prices from the three years prior to the tax year for which the taxable values are being set.

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Spring Had Sprung

garden lanscape toolsEvery year when spring arrives the heart races a bit faster for every gardener and landscaper. The return of spring brings warmer temperatures, longer days, and a time for a fresh start. And, while last year it arrived rather early, this year it seems Mother Nature has decided to sleep in a bit longer.

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Trade Deficits: Good or Bad?

Economic Tidbits 12.18.17

The U.S. trade deficit with the rest of the world has been getting a lot of attention lately.  In January, the deficit was estimated to be $56.6 billion, the highest level in nearly a decade.  President Trump believes the trade deficit is bad and argues the U.S. is losing to other countries with which it trades.  Accordingly, he believes the U.S. must renegotiate trade agreements and enact tariffs on imported goods to rectify the large deficits.  The President’s arguments raise two questions:  Are trade deficits inherently bad? And, is the U.S. losing to the rest of the world by having such large trade deficits?  Continue reading

The Big Mac and the Dollar . . .

Economic Tidbits 12.18.17

“The Big Mac and the Dollar” may read a bit like the title of a children’s fairy tale (i.e. Jack and the Beanstalk), but it isn’t.  Instead, it’s an agricultural economist’s not-so-clever way of introducing a discussion on the value of the dollar.  Nebraska agriculture relies on exports, and the value of the dollar is a key determinant in determining the competitiveness of Nebraska agricultural products in international markets.

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To Sell, or Not to Sell to Coops, That is the Question

Economic Tidbits 12.18.17

Two tax code changes in the tax package passed last December by Congress are receiving much attention in the countryside.  The first change concerns the tax treatment of producers’ sales to coops.  The second concerns the loss of the Section 1031 exchanges for farm machinery and equipment.  Let’s examine these changes in more detail.

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SALT & Taxes . . .

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The Chairman of the House Ways and Means Committee, the tax writing committee of the House of Representatives, announced a draft of the federal tax reform bill will be released November 1.   Leaders in both the House and Senate have expressed hope a tax package could be passed by Thanksgiving.  One taxing concern on the minds of many farmers and ranchers is the fate of the deduction for state and local taxes (SALT).  The concern is especially acute in Nebraska given the large amount of property taxes paid by agriculture, roughly $1.3 billion in 2016.

 

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Under the unified framework for tax reform, the Trump Administration and Republican Congressional leaders said they want to simplify the federal tax code by repealing all itemized deductions, except deductions for home mortgage interest and charitable contributions.  Itemized deductions are claimed by individuals on Schedule A filed with Form 1040.  Most farmers and ranchers file taxes as individuals-the 2012 USDA Census of Agriculture showed 85 percent of Nebraska farms filed taxes as either an individual or family.  Additionally, only 28 percent of farmers and ranchers itemize deductions.  It is these operations who itemize deductions the loss of the ability to deduct state and local taxes could affect.  The average annual deduction for state and local taxes reported by farm sole proprietors on Schedule A for 2009-2015 (excluding 2013) was $128.4 million.  Presumably, the deduction is for state income taxes, property taxes on farm residences, and taxes on personal vehicles.  For these operations, the loss of the deduction could increase federal income taxes an estimated $18 million per year if not offset by other changes.

Corn harvest in Illinois - SeptemberFarmers and ranchers also deduct state and local taxes paid as a business expense for their operations, be it as sole proprietors, partnerships, or corporations.  It is here where most of the property taxes paid by agriculture on land and machinery are likely reported and losing the ability to expense state and local taxes would result in a significant increase in federal taxes.  Fortunately, according to the lobbyist for American Farm Bureau, the ability to expense state and local taxes as a business expense will continue.  Congressional leaders have indicated the repeal of the state and local taxes deduction would only apply on individual returns, and not affect the expensing of taxes by businesses.  But stay tuned, the reform discussions are now beginning in earnest, and no one can predict what might happen.

 

Jay RempeJay Rempe is the senior economist for Nebraska Farm Bureau. Rempe’s background in agricultural economics, years of experience in advocating at the state capitol, and firm grasp of issues allow him to quantify the fiscal impact of a regulatory proposal, and provide in-depth examination of key issues affecting Nebraska’s farmers and ranchers.

Latest Crop Production Estimates . . .

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This year’s Nebraska corn production is forecast to be 1 percent less than last year, and soybean production is forecast to be 1 percent more, according to the latest USDA- NASS estimates released on Thursday.  The latest estimates peg Nebraska corn production at 1.683 billion bushels and soybean production at 316.4 million bushels, a record for the state.  U.S. corn production is forecast at 14.3 billion bushels, down 6 percent from last year, while soybean production is forecast at a record 4.43 billion bushels, up 3 percent from last year.  The percentage changes in production for Nebraska crops are shown in Table 1.
Table 1. Percentage Change in Crop Production, 2016 to 2017

 Corn  -1 %
 Soybeans  +1 %
 Sorghum  – 19 %
 Dry Edible Beans  +49 %
 Sugar beets  +1 %
 Sunflowers  – 4 %
 Alfalfa Hay  + 4 %

Corn and soybeans together typically account for 90 percent of Nebraska’s total crop cash receipts.  As such, changes in revenues for these commodities, along with changes in beef sector revenue, will dictate the overall health of the state’s agricultural economy.  Calculations using the latest USDA production and price estimates suggest cash receipts received by corn and soybean producers could be less for this year’s crop.  Combined receipts for the two crops are estimated to decrease $389 million, or 4.48 percent from last year.  Revenue for the 2017 corn crop is estimated to be $325 million less, or 5.69 percent; revenue for the 2017 soybean crop will be $64 million less, or 2.16 percent less. The reduction in revenue would result in an estimated 0.61 percent reduction in net farm income, or $30.7 million, assuming corn and soybean receipts as a percentage of net farm income is the same as the average from 2008 to 2015.  The decline doesn’t necessarily mean total net farm income for the state will be down, as the beef feedlot sector has enjoyed positive returns for awhile this year.  But any positive returns in the beef industry or other commodity sectors must overcome the declines in corn and soybeans revenues to result in an uptick in income for the state.

 

Jay RempeJay Rempe is the senior economist for Nebraska Farm Bureau. Rempe’s background in agricultural economics, years of experience in advocating at the state capitol, and firm grasp of issues allow him to quantify the fiscal impact of a regulatory proposal, and provide in-depth examination of key issues affecting Nebraska’s farmers and ranchers.

Federal tax reform-a first impression . . .

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The Trump Administration, the House Ways and Means Committee, and the Senate Finance Committee announced last week they have agreed to a unified framework for federal tax reform.  The framework outlines several tax proposals for both business and individual filers.  Many details remain to be filled in, and legislation needs to be written, but the unified framework does provide some guidance for farmers and ranchers on issues they should monitor as the tax discussion evolves.

Most farm and ranch operations in Nebraska file federal taxes as individuals (Form 1040).  The 2012 USDA Census of Agriculture reported that 85 percent of Nebraska farms claimed the legal status of a family or individual for tax purposes.  The average annual federal income tax after credits reported on returns filed by Nebraska farm sole proprietors was $443 million for 2009-2015 according to the Internal Revenue Service (IRS) data (2013 was not included as data was not readily available).  The average annual effective rate of taxation on farm returns over this period was 14 percent, which was two percentage points higher than the effective rate for all Nebraska individual returns over the same period.

For individual filers, the unified framework proposes to double the standard deduction, consolidate tax brackets from seven to three, lower the top rate from 39.6 percent to 35 percent, eliminate itemized deductions except for mortgage interest and charitable deductions, repeal personal exemptions for dependents but increase the child tax credit, and repeal the alternative minimum tax.  So, what are the tax implications for farmers and ranchers?

Like most Nebraskans, most producers claim the standard deduction on their individual returns.  In 2015, according to IRS, 72 percent of Nebraska farm returns claimed the standard deduction.  Thus, doubling the standard deduction has the potential to reduce taxes for these filers subject to other changes in tax brackets and rates, which are not known now.  For producers who itemize, total Schedule A deductions amounted to $196 million in 2015, excluding home mortgage and charitable contributions.  Losing these deductions, and what it means in ultimate taxes paid, will depend on individual filer’s amount of itemized deductions relative to the increase in the standard deduction, and ultimately, the changes in tax brackets and rates.  The proposals addressing the child tax credit and repealing the alternative minimum tax will have little impact on farm and ranch taxes.  Combined, the two provisions amounted to $23 million for farm tax filers in 2015, or 0.7 percent of reported adjusted gross income that year.

At this point, because all the details on tax brackets and rates are not known, the implications of federal tax reform for farmers and ranchers are difficult to grasp.  The changes to business taxes will also have implications for farm and ranch operations.  Future Tidbits will highlight provisions in the unified framework for businesses and other taxes that might impact farmers and ranchers.  Tidbits will also return to the topic of changes for individual filers when more is known on changes to brackets and tax rates.

 

Jay RempeJay Rempe is the senior economist for Nebraska Farm Bureau. Rempe’s background in agricultural economics, years of experience in advocating at the state capitol, and firm grasp of issues allow him to quantify the fiscal impact of a regulatory proposal, and provide in-depth examination of key issues affecting Nebraska’s farmers and ranchers.