A contemplated change in how the Renewable Fuel Standard (RFS) is implemented could cost Nebraska corn producers $421 million. A policy brief by the Iowa State University, Center for Agriculture and Rural Development (CARD), suggests the policy change, a cap on the prices of Renewable Identification Numbers (RINs), could result in a price loss for corn of 25 cents per bushel. A 25-cent loss in price would equate to a loss in the value of Nebraska’s corn crop of $421 million, or 7.6 percent, based on the 2017 estimated crop value of $5.5 billion.
The other day I decided to treat myself to a large bowl of ice cream. I was feeling like it needed a little extra something, so I decided to add some chocolate syrup and whipped cream. When I looked at the can of whipped cream, I had somewhat of an epiphany when I saw a bold label that said, “No Artificial Growth Hormones.” I stared at the label as an agriculturalist and an advocate for the industry and began to understand why there is such a distrust between consumers and producers.
Nebraska crop producers received $646 million in Price Loss Coverage (PLC) and Agriculture Risk Coverage—County (ARC-CO) payments last fall for the 2016 crop year. In total, the USDA distributed $6.9 billion in payments to participating producers under these two programs.
Lawmakers moved forward on federal tax reform after negotiators agreed to language in a conference report. Both the House and Senate are voted on the conference report this week. Many farmers and ranchers continue to ask whether property taxes paid on agricultural land, buildings, and equipment in their farm or ranch operations could still be deducted. Yes—the conference report does not change the ability to deduct property taxes as a business expense by farmers and ranchers on Schedule F, Schedule E, or Schedule C. The report does establish a $10,000 limit on the deduction for state and local income and property taxes, but the limit only applies to itemized deductions claimed on Schedule A filed by individual filers. Even though most farmers file income taxes as individuals, business income from a farm or ranch is reported on Schedule F, E, or C, where property taxes can still be deducted as a business expense.
The federal tax reform saga has turned a page and is moving into the next chapter in the U.S. Congress. On the House side, the Ways and Means Committee advanced H.R. 1, the Tax Cuts and Jobs Act, to the House floor with a committee amendment. The full House is expected to take up the bill later this week. On the Senate side, Senate Republicans last week released a draft of a reform proposal which differs markedly in some provisions with the House plan. The Senate plan will be taken up by Senate Finance Committee this week.
Last week the House Ways and Means Committee released its long-awaited federal tax reform proposal. The proposal would change how farmers and ranchers are taxed both as individuals and as businesses. Many farmers and ranchers are wondering if property taxes paid on land, buildings, and equipment could still be expensed as business expense under the proposal. Yes-the ability to deduct property taxes as a business expense by farmers and ranchers on Schedule F would continue.
The Nebraska Economic Forecasting Board (NEFAB) on Oct. 27 adjusted its state revenue forecasts downward resulting in a budget shortfall of roughly $195 million for the current budget biennium. NEFAB revenue forecasts are used by state senators to set the state spending. Senators adopted a biennial budget earlier this year, but because they are required by the constitution to balance the budget, the decrease in forecast revenue means budget adjustments will be necessary during the 2018 legislative session in order to balance.