Tag Archive for: Landowners

How the Election of Trump will affect Landowners and Farmers

 

Election effect on Nebraska landowners

After a stunning upset, Republican Presidential candidate Donald Trump is preparing to take the reins from President Obama in January. His election was propelled by overwhelming support from rural voters—many among them farmers and landowners, who hold out hope for policies that may help ease the burdens that are falling on themselves and their fellow agriculture producers. Rural voters backed Trump over Clinton 62 percent to 34 percent, at the same time rural voters increased in this election. That, combined with the depressed urban turnout, sealed the deal for the business magnate.

Now, as Trump is picking out his cabinet members and preparing for his Inauguration, the same farmers and landowners are wondering how  a Trump presidency will play out not only in terms of agriculture policy, but in others such as immigration reform, trade, regulations, and healthcare.

While obviously there is only conjecture at this point, farmers and landowners can look to a few key points that Trump spelled out during his campaign and in an interview with Farm Futures magazine.

First, the President-Elect was quite clear in stating his support for agriculture, saying, “The Trump Administration will be a pro-agriculture administration.” He went on to state that he has assembled an Agriculture Advisory Committee comprised of top leaders in agriculture communities, who will provide key insight into the specific needs unique to farmers and landowners in rural areas.

Another issue that may impact large-scale farms deals with the many illegal immigrants who are employed by them. Noting concern that such a workforce may suddenly be taken away, Trump responded by emphasizing the perils of the Obama system of open borders on rural communities. “I recognize the unique labor challenges facing the American farm community and will include farmers and ranchers in the process of determining the best possible immigration policies. Enormous stresses are being placed on state and local government services, while jobs for American citizens and wages for American workers are in decline,” Trump said.

Additionally, many farmers are hoping for a new farm bill that addresses unpopular terms of the current bill, passed in 2014. Among them, the disparities associated with the Agricultural Risk Coverage payments are cited as a top concern. While this may be prioritized, farmers and landowners should be cautioned, as many conservative lawmakers are urging cutbacks on agricultural subsidies —about which many farmers may think twice, although many see the reasoning behind such a move.

Similarly, conservation programs and efforts may be altered, as well as the recently passed legislations regarding GMOs and food labeling.

Most importantly, perhaps, is that Trump’s election may spell the end of the regulations that burden both small- and large-scale farmers and landowners, a hope that the agricultural community immediately expressed the morning of November 9th.  Trump had strong words regarding these burdensome regulations, saying, “Terrible rules are written by unelected, unaccountable bureaucrats who often know nothing about the people they are regulating. The regulators have all of the power, and our nation’s farmers are often forced to endure costly, burdensome and unwise regulations that are bad for American farmers and consumers.”

Landowners and their families will welcome Trump’s proposed end to the controversial estate tax.  The double taxation this law causes has been a burden for many families.

Looking forward, America’s farmers and landowners are cautiously optimistic in the face of Trump’s forthcoming term, but will have to wait and see if the Trump administration will deliver on those promises.

UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. If you have questions about yields and productivity on your rented farmland, give the UFARM managers contact us today!

Sources consulted:  Clayton, Chris. “Farm Voters’ Expectations of Trump Presidency Face Hard Realities.” Agfax.com. Agfax. 10 Nov. 2016. Web. 21 Nov. 2016.
Spangler, Holly, and John Vogel. “Clinton and Trump: Where They Stand on Ag.” FarmFutures.com. Penton. 20 Sep. 2016. Web. 21 Nov. 2016.

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How Will The Recent Interest Rate Increase Affect Farmers And Landowners?

Nebraska Landowners

It has long been anticipated that the Federal Reserve would be raising the interest rate in the foreseeable future, and last month it finally actualized. Federal Reserve Chairwoman Janet Yellen announced in December that the interest rate would increase from 0-0.25 percent to 0 .25-0.50 percent. While not a large increase, the raise will still impact a great portion of industries across the US. How will the recent increase affect US farmers, landowners, and the agriculture industry?

First, and most obviously, the hike will increase the cost of borrowing money—something with which most farmers are well acquainted. With the current rate increase, producers borrowing money based on prime would pay 0.25 percent more interest annually on their short-term loans, including operating and vehicle loans.

Secondly, the rate increase will add to the downward pressure on the price of farmland.

Lastly, interest rate increases may also contribute to a stronger US dollar. For those in agriculture, this translates to less competitive commodity prices in the world market.

According to Jeffery Dorfman, an agricultural economist at the University of Georgia, one percentage point rise in the interest rate can translate into as much as a 6 percent drop in commodities prices. On the low end, such a move could push prices down by 2 percent, which translates into “a dime or so per bushel for corn and wheat and maybe a quarter for soybeans,” he says.

While that information is sobering, Dorfman is quick to reassure farmers.

“I would not expect the inevitable increase in interest rates to be positive for commodity prices, but the magnitude of the negative impact should be relatively small and fairly evenly spread across the major row crops.”

With all this in mind, it’s important to take into account that more increases are on the horizon. In September of 2015, Yellen said that the rate will likely rise to 1.5 % by late 2016, 2.5 % in late 2017, and 3.5 % in 2018.

The good news is that the very gradual increases will soften the blow for most producers, depending upon their current financial situation.

What is the best course of action for farmers and landowners in response to rising interest rates? It’s best to continually strive to make improvements in efficiency and productivity, both in the fields and financially. Being able to provide detailed cost projections and yield estimates to your lender will put you in a much better position to negotiate better interest rates.

Creighton University economics professor Ernie Goss has his own suggestion.

“If I were a farmer, I would protect myself against rising short-term rates by locking in these very low long-term rates. I would take out equity on the farm, understanding that I may be using the funds for operating,” Goss said.

Do you have concerns about what the interest rate hike will mean for your farming operation? Feel free to contact us with your concerns. We are glad to work with you to keep your operation running strong.

Source consulted: Anderson, Ken. “The Impact of Higher Interest Rates on Agriculture.” Brownfield Ag News. Brownfield Ag News for America. 03 Nov. 2016. Web. 21 Jan. 2016. Howard, Fran. “How a Rise in Interest Rates Could Affect Farmers.” AgWeb.com. Farm Journal. 05 Aug. 2015. Web. 21 Jan. 2016.  Rice, Allison. “If Interest Rates Rise, What Happens to Crop Prices?” Agweb.com. Farm Journal. 15 Dec. 2015. 21 Jan. 2016.

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Why Is Farmland a Good Long Term Investment?

Farmland investment

It’s no secret that farmland values have boomed over the last decade. Many farmers and outside investors have bought and continue to buy up land to pad their investment portfolios. Despite the decreasing commodity values of the last year, many economists continue to be optimistic about buying land as a long-term investment.

Commodities investor Jim Rogers, who founded the Rogers International Commodities Index, is part of an increasing number of farmland investors hoping to benefit from the growing world population’s need for food. With a world population that is expected to grow from 7 billion to 9 billion by the year 2050, and the projected arable land to decrease steadily in the same time span, the case for farmland investment worldwide is a good one.

Says Rogers, “More people need to get into farming; otherwise, we won’t have any food. I’m still wildly optimistic about the future of agriculture worldwide.”

There are many other factors contributing to the desirability of quality farmland. One is that the increase in population will occur largely in the developing world, where rising incomes will contribute to higher meat consumption. Increasing livestock consumption creates a demand for grain and water, so farmers worldwide will rise to the demand by putting out more crops and farming more acres. Another driver of the farmland market boom is the demand for biofuels, such as ethanol.

These factors, combined with a worldwide leveling off of yields after the many advances of the last 40 years, put owners of quality farmland into excellent position to benefit financially in the long-term.

While outside investors continue to be bullish about quality farmland, others emphasize the need use caution before jumping headfirst into the farmland market. While land values have risen dramatically over the last decade, they are set to level off as commodity prices do the same.

Purdue University Extension agriculture economist Craig Dobbins says, “The next couple of years for farmland values are going to be a little less certain than the last few years have been. Commodity prices have come down significantly in the last year, so these large returns we’ve kind of become accustomed to for the last few years have now shrunk.The probability of short-term farmland values staying flat or seeing a small decrease is much bigger than the probability that we’re going to see another double-digit increase.”

While farmland continues to be a solid way to invest your capital for the long-run, it’s important to evaluate your financial situation carefully before buying land in 2015.

Are you considering buying land, or do you have concerns about the value of your farmland going forward? Contact UFARM—we’re happy to talk with you about your land asset. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

 

Sources consulted: Murphy, Richard McGill. “The best long-term real estate investment: Farmland.” CNBC.com. CNBC. 24 Mar. 2014. Web. 16 Dec. 2014. Stewart, Jennifer. “Farmland value shift signals need for cautious purchasing.” Purdue University News. Purdue University. 13 Feb. 2014. Web. 16 Dec. 2014.

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Land Managers: Helping Both Landowners and Tenants

Land managers help landowners and tenantsWith volatile grain markets and land values, and with increasing amounts of landowners acquiring land as part of an inheritance, or solely as an investment with very little agriculture experience, many are hiring professional land managers to help them run their farming operations. Even farmers with experience and close ties to the land often turn to land managers to help them negotiate fairly with tenants, or to ask their advice about any number of farming issues—be it the cost of fertilizer or news about the latest farm bill programs.

Despite the overall value that many see in maintaining a relationship with a land manager, there are still pockets of resistance, especially among those who hold the impression that land managers work only for the landowner, and not the tenant who farms the land. Land managers work continually to dispel this myth, and hold their legal fiduciary duty to put their clients’ interests ahead of their own in high regard. This duty applies not only to the landowner, but to the farmer as well.

Resistance to land managers on the part of tenants is something that UFARM managers are familiar with. Their advice to landowners is; if your tenant dislikes the idea of the involvement of a land manager, then you should run, not walk to hire a manager, because something may be amuck. While this may not be the case in every instance, land managers hold their responsibilities to all their clients—be they landowners or tenants—in high regard, and are able to sort out complicated farming situations if the need arises.

Often, this is in helping to negotiate rental agreements between landowners and tenants that are mutually agreeable to each party. In these situations, farm managers are able to act as an impartial third party, and for those who desire it, can keep such relationships at arm’s length. Even in good landlord/tenant relationships, a third party is sought simply to keep the relationship running smoothly, which is often the case when it takes place between family members.

UFARM managers feel like an important liaison with both owners and tenants. Some tenants contact UFARM managers to check fertilizer prices, chemical prices, and new technologies. A qualified land manager holds value for not only the landowner, but can be an important resource for tenants as well.

If you are considering hiring a land manager for your farm, contact UFARM for a free consultation. We are glad to help you determine if our services are right for you. United Farm and Ranch Management (UFARM) is a Nebraska-based company devoted to meeting landowners’ needs. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

 

Source consulted: Knutson, Jonathan. “Hiring Expert Help.” Agweek. Agweek.com. 18 Feb. 2013. Web. 03 Nov. 2014.

 

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1031 Exchanges Coming to an End?

1031 ExchangeAt some point during any farmer or landowner’s lifetime, they will likely be involved with the sale and acquisition of land. Deferring the capital gains tax on the sale of land to a later date by purchasing more land—in what is known as a 1031 exchange—is a common practice that has been employed for many years. Several proposals by the federal government to significantly alter the 1031 Section of the IRS code have many in the real estate business wondering about the future of 1031 exchanges, and how this might affect multiple industries, including farmers and landowners.

A 1031 exchange is a very useful tool for investors. In technical terms, “A 1031 exchange allows an investor to defer the recognition of capital gains when exchanging one appreciated investment property (the ‘relinquished property’) for another ‘like-kind’ investment property (the ‘replacement property.’)” In most 1031 transactions today, the investor employs a qualified intermediary (QI) to facilitate the sale of the relinquished property to one party and the purchase of a replacement property from another party. The replacement property must be equal to or greater in value to the relinquished property. The capital gains are thus deferred to a later date, when the replacement property is sold or transferred with non-like-kind property.

As such, 1031 exchanges are not tax loopholes; they are merely a deferred payment of taxes. Commercial real estate expert Scott Saunders explains, “The essential logic is that the investor, in exchanging one appreciated property for another like-kind property, has not realized the gain inherent in the relinquished property. The investor has merely changed the form of his investment.” Thus, since no profit is realized in the transaction, there is no premise for taxation.

It is no secret that 1031 exchanges are friendly to investors, businesses and business owners, farmers, and landowners. The advantages of 1031 exchanges are numerous. They make sound business sense, helping investors grow, change locations, diversify and expand, thereby creating jobs, further financial opportunities and economic stimulus to a wide array of other economic sectors.

Consequently, it is troubling to many that the federal government is looking to alter—and in some cases, eliminate—1031 exchanges, in order to increase federal tax income. Two separate proposals, one by former Democratic Senator and current China Ambassador Max Baucus and another by US Rep. Dave Camp (R-MI), would eliminate all 1031 tax exchanges. President Obama’s latest budget proposal would limit the deferred taxes in a 1031 exchange to $1 million dollars per taxpayer per taxable year beginning January 1, 2015.

Of course, should these proposals pass, the effect would not, in fact, produce more federal tax revenue. In reality, the likelihood that investors would simply hold onto properties rather than sell without the ability to defer tax payment through 1031 exchanges would greatly increase. Accordingly, the beneficial economic ripple effects to other financial sectors would lessen as well.

Saunders urges taxpayers and voters to educate legislators on the many benefits that 1031 exchanges offer in order to put a stop to the potential elimination of 1031 exchanges.

Are you looking to sell land, and are wondering about how a 1031 exchange would work for you? Are you concerned about how these potential tax changes might affect you and your land? Contact a UFARM representative with your concerns—they are glad to help.

United Farm and Ranch Management (UFARM) is a Nebraska-based company devoted to meeting landowners’ needs. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact Us.

 

Sources consulted:  Saunders, Scott. “1031 Exchanges Face Uncertain Future.” Rebusiness Online. 06 May 2014. Web. 02 Sep. 2014.

 

 

 

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Should Landowners Consider a Trust During Estate Planning?

Estate Planning for LandownersAmong the many decisions farmers and landowners make, the most important deal with estate planning. Unfortunately, estate planning often gets pushed to the back burner, and the wide array of options available to landowners is left unexplored. Being proactive in exploring these options can pave the way for a peaceful estate settlement that retains and passes on the assets in a mutually satisfying way for all involved parties.

Among the many estate planning options available to landowners is a trust. Trusts are an estate management tool that offer landowners flexibility and lots of customizable options. Ironically, the trust is also the least utilized estate management tool.

A trust is an artificial entity, created by means of a legal document, consisting of four basic elements: the trustee, the trust property, the trust document, and the trust beneficiaries. A trust allows a third party to hold assets on behalf of a beneficiary. The trust document specifies the rules of operation for the trust, the powers of the trustee, the beneficiaries to share in the income and principal from the trust, and instructions for distribution of the trust property.

How do you know if a trust is the right option for you and your land? The answer depends on a variety of factors, but as a landowner, you are already a good candidate, as trusts are ideal for those whose assets are largely in land. In addition, a trust might be a good fit for you if you meet one of the following conditions:

1)     You want to leave your estate to your heirs in a way that is not directly and immediately payable to them upon your death. For example, you may want to stipulate that they receive their inheritance in three parts, or upon certain conditions being met, such as graduating from college;

2)     You want to support your surviving spouse, but also want to ensure that the principal or remainder of your estate goes to your chosen heirs (e.g., your children from a first marriage) after your spouse dies;

3)     You and your spouse want to maximize your estate-tax exemptions;

4)     You have a disabled relative whom you would like to provide for without disqualifying him or her from Medicaid or other government assistance.

You may be asking why a trust is that different from a will. One difference is that assets may be gained sooner by beneficiaries, and that estate taxes may be significantly less or avoided altogether, depending upon the type of trust that is set up. Other benefits of establishing a trust include retaining control over your wealth, protecting your legacy, and retaining privacy by avoiding a public probate, saving costs and taxes along the way.

There are many types of trusts, and if you are considering one for your business assets and family, it’s important to discuss your options at length with an experienced attorney and estate planner before setting one up.

You’ve worked hard to get where you are – protect those assets for the next generation. If you are interested in exploring the estate planning options available to you, feel free to contact one of the experienced land managers at UFARM to help guide you.

United Farm and Ranch Management (UFARM) is a Nebraska-based company devoted to meeting landowners’ needs. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s.

 

Sources consulted:

“Estate Planning: Is a Trust Beneficial?” CNN Money. CNN.com. Web. 10 Jul. 2014.

Leibold, Kelvin, and Melissa O’Rourke. “Trusts as an Estate Management Tool.” Iowa State University Extension and Outreach. Iowa State University. May 2014. Web. 10 Jul. 2014.

“What is a Trust?” Fidelity Investments. Fidelity. Web. 10 Jul. 2014.

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New Farm Bill Ends Direct Payments to Farmers

Farm Bill Effects of LandownersAfter multiple extensions and delays, the Agricultural Act of 2014—more widely known as the Farm Bill—was finally passed by Congress and signed into law by the president in February. Since then, it has been up to the USDA and other agencies to integrate the changes the bill contains, to work through the specific rules for the programs, and to oversee its implementation at ground level. Farmers themselves are interested in the portions of the bill that have changed in regard to agriculture policy and how these changes may affect them.

The vast majority of the Farm Bill costs still fall to the Nutrition program, also known as the Supplemental Nutrition Assistance Program (SNAP), at 80 percent. After that, 8 percent goes to expanded crop insurance programs, 6 percent to conservation programs, 5 percent commodities, and 1 percent “other.”

However, the end of direct payments has garnered the most attention on the agricultural scene. These payments were known as the Direct and Counter-cyclical Program (DCP) and the Average Crop Revenue Program (ACRE). These direct payments to farmers, first instated as a temporary program in the 1996 farm bill but retained in subsequent bills since, were the object of bipartisan ire for many years, since the payments didn’t depend on need or the condition of the crop, but solely on the number of acres owned, sometimes even if those acres did not grow an actual crop.

As a result, lawmakers backing the final iteration of the bill touted a victory in managing to pass something that affected such a wide array of interest groups, and that is expected to cut the budget by $17 billion over a decade.

While direct payments have come to an end, the bill does offer more robust insurance and revenue protection systems instead. In place of DCP and ACRE programs, the new farm bill will offer:

• Price Loss Coverage (PLC), a price protection program that triggers payments when market year average prices fall below target levels, which are called reference prices.

• Agricultural Risk Coverage County (ARC-C), a revenue protection program that triggers payments when the county revenue per acre falls below a benchmark revenue guarantee per acre set for the county.

• Agricultural Risk Coverage Individual (ARC-I), a revenue protection program that triggers payments when there is a revenue-per-acre shortfall on the individual farm that falls below a benchmark revenue guarantee per acre for that farm.

Dwight Aakre, North Dakota State University Extension Service farm management specialist, says this of the new ARC programs: “Unlike the ACRE program, where the entire state had to experience a revenue shortfall in the current year, the ARC program will use the county or the individual farm as the benchmark. This results in support payments when the revenue is less than the benchmark for either the county or the farm, which more closely reflects the actual condition an individual producer experiences.”

Producers taking advantage of the program will have to choose either the county or farm option. The county option pays up to 85 percent of the base acres, while the farm option is limited to a maximum of 65 percent of base acres.

The PLC option will work much like the previous DCP program. The PLC payment results when the covered commodity’s marketing price falls below the reference price.

The latest farm bill brings some significant changes to the programs offered to farmers. Do you need help further understanding these changes, and how they may affect you as a landowner? Let UFARM help you navigate the options available to you.

United Farm and Ranch Management (UFARM) is a Nebraska-based company devoted to meeting landowners’ needs. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s.

 

Sources:
“2014 Farm Bill Eliminates Direct Payments.” North Dakota State University Agricultural Communication. NDSU Extension Service. 31 Jan. 2014. Web. 05 Jun. 2014.
Stewart, Jennifer. “Purdue Ag Economist Offers Insights to Latest Farm Bill.” The Prairie Star. The Prairie Star. 04 Jun. 2014. Web. 05 Jun. 2014.

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Demand for Quality Farmland Remains Strong in 2014

Real Estate Auction Sign-croppedDespite a downturn in grain prices and lower net farm income expectations among farmers and investors across the Midwest, demand for high quality farmland remains strong. A limited supply of such quality ground is contributing to a healthy demand for premium farm acres, even though prices for farmland in general seem to be moderating following the five year boom in land values.

While the primary competitors for such ground are farmers themselves, local investors seeking to expand their portfolios continue to show great interest in obtaining these valuable parcels of ground. When such land become available, both parties show healthy interest and appear willing to pay top dollar for it.

Even with this stable demand, landowners and farmers themselves remain cautious when it comes to investing in more ground. While many are better positioned now, with less debt, than during the 80’s land bust, they are seeking to invest smartly. For many, this means putting more effort into finding only the best quality farmland.

Mike Walsten, editor at Landowner, projects that farmland values in general will fall about 10% this year, based on current expectations. He says that demand for quality farmland will remain fairly stable, while demand for less quality farmland will continue to weaken, especially should profit margins further weaken at the same time.

In the longer term, Walsten is confident that farmers and landowners will weather these market corrections if they show restraint in adding more debt. He cautions that adding more debt to maintain spending will create problems—something that many producers learned the hard way during the 80s land boom and bust. Another factor that could greatly influence landowner decisions are rising interest rates, especially in the latter half of 2015. Higher interest rates would further dampen land values.

Still, investing in farmland remains one of the best and safest long term investments—something that landowners and especially outside investors recognize. One of the main drivers of recent interest in investing in farmland is based on the burgeoning world population, which is expected to peak at 9 billion by 2050, up from 7 billion today. Growth, especially in developing nations, will substantially drive up demand for food. In addition, the quest for biofuels remains a contributing factor to the high demand for quality farmland. In the US, for example, corn grown to produce ethanol accounts for 23 percent of total corn use.

It’s no secret that owners of quality farmland are poised to benefit from such trends, and while land values are currently softening, many experts remain bullish on land values going forward, especially for high quality farmland.

Are you seeking to make the most of your farmland, or are you looking to expand your portfolio and think that land ownership would be a good fit for you? Let the experienced professionals at United Farm and Ranch Management help you determine the best plan of action to benefit your unique situation.

Sources:

Birt, Nate. “Farmland Prices: Demand Ticks Up for Good-Quality Ground.” Agweb.com. Farm Journal. 07 Apr. 2014. Web. 24 Apr. 2014.

Murphy, Richard McGill. “The Best Long-Term Real Estate Investment: Farmland.” CNBC.com. CNBC. 24 Mar. 2014. Web. 24 Apr. 2014.

 

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What do 2014 Farm Bill negotations hold for landowners?

After multiple short-term extensions on the Farm Bill—the latest of which expired on December 31st—lawmakers are set to resume the next legislative session, and USDA secretary Tom Vilsack is confident that a deal can be reached on an updated version, and that it can be put up to a vote this month. Conferees on the committee have been working on a new iteration of the Farm Bill for the last three months.

The multiple delays are largely the result of disagreement over potential cuts to the federal Supplemental Nutrition Assistance Program (SNAP), which comprises a large portion of the Farm Bill. Last summer, both the House and the Senate proposed changes to the current law, with the House suggesting larger cuts to the Food Stamp program and also passing a separate piece of legislation that would separate the SNAP program from the Farm Bill altogether. With three bills to reconcile, the conference committee has had its hands full.

2014 Farm Bill While most national headlines have focused on the more politically polarizing SNAP cuts proposed, the likely elimination of direct payments to farmers is attracting the focus of farmers and landowners. The direct payment program has its roots in the 1996 Farm Bill, and has received bipartisan criticism for a number of years. Critics argue that these payments—regardless of crop prices, and often paid to those who haven’t even grown a crop—are costing taxpayers too much. But sources reveal other portions of the newly proposed bill that would expand other protections for farmers. “Negotiators say they are trying to modernize the system by balancing the needs of farmers with the interests of taxpayers,” writes Kristina Peterson. “But the emerging compromise, which would replace direct payments with beefed-up crop insurance and other protections for farmers, has already triggered criticism from outside groups who say it won’t radically reduce the amount of risk the federal government assumes in the agriculture industry.” While the end to direct payments might sound dismaying to many producers, the newly proposed expanded crop insurance protections, as well as new programs to help cover losses not addressed by insurance and other forms of assistance for farmers, may soften the blow to a certain extent. In statements made last Friday, Vilsack noted that whatever form of the Farm Bill is passed by Congress, the USDA is trying to ensure that they are able to put the new measures into effect in an expeditious manner. “Obviously we want to be in position … once the President signs the farm bill to be able to begin the process of implementation as quickly as possible,” Vilsack said.

In the meantime, farmers and landowners are still faced with some uncertainty until a final bill is successfully reconciled in Conference Committee and passed by Congress. Producers are already making their 2014 planting decisions, and even if a bill is successfully reconciled and passed with new farmer protections, it is unlikely that they will have much of an effect in 2014. In this way, it is likely that farmers and landowners will face similar uncertainties as they did in 2013.

The professional land managers at United Farm and Ranch Management stay on top of the changes happening in agriculture, from legislation, tax laws to farming practices.  If you would like to discuss how they can maximize your land’s potential, contact UFARM today.

Sources: (Peterson, Kristina. “Direct Payments to End, But Farm-Bill Policy Questioned.” The Wall Street Journal. 02 Jan. 2014. Web. 06 Jan. 2014.)  (Baum, Janelle. “Farm Bill Process Far From Over.” Prairie Farmer. Farm Progress. 06 Jan. 2014. Web. 06 Jan. 2014.)

Estate Planning: Successfully Transferring Land to the Next Generation

Estate Planning: Successful Transferring Land to the Next GenerationWhen it comes to land management, one aspect that many landowners often put off for “tomorrow” is planning their estate’s transfer to future generations. However, estate planning is one of the most important actions landowners can take to ensure that one of their greatest assets is handled in a smooth manner once retirement age is reached or in the event of unexpected death or injury. It is essential for all parties involved to know what to expect, and having a plan in place offers peace of mind for both benefactors and those who will inherit land in the future.

There are many factors that must be taken into account when estate planning. Most obviously, experts emphasize the importance of having a legal plan in place, no matter how “settled” the land’s future is among the family. If there isn’t an actual legal document outlining the transfer, the state has the authority to allocate the assets according to state law. Having an estate plan that both outlines the distribution of assets as well as addresses business organization issues is essential for the successful transfer of the land to the final beneficiaries.

When estate planning, it is important to know how best to allocate farm ground among on-farm and off-farm children. Many initially conclude that the most equitable solution is to divide assets equally among all children. However, this avenue fails to take into account the difficulty the on-farm child would have in having enough money to buy-out his siblings, and often results in the land having to be sold to an outside party. Estate planning can address this situation, and allow the family farmland to remain in the family, as well as for all children to benefit as well.

In addition to the transfer of ownership, good estate planning helps reduce and avoid unnecessary taxes. Here it is especially important to have a trusted and competent advisor who is well-versed in tax law to avoid the considerable transfer taxes that can be incurred if not overseen carefully.

An estate plan also addresses many other key issues. It ensures practical ways to generate retirement income. It addresses how a spouse will be supported in the event of an unexpected death or injury, and covers medical and/or funeral costs. It also provides ways to secure a solid financial future for the next generation, including living and educational costs.

Experts agree: It’s never too early to establish an estate plan. In fact, waiting until retirement age can limit the ability to address tax concerns that may arise for heirs should they suddenly find themselves inheriting a large portion of land or other farm-related asset.

Ideally, estate planning is revisited often, since tax laws change frequently, and other factors such as land values can change greatly from year to year. It is important that landowners have trusted advisors to work with through the years in order to help them make these important decisions and to decide how best to manage the transfer of assets to the next generation.

United Farm and Ranch Management can provide complete solutions for your land.  Whether you need assistance with day-to-day management or long-term planning, our farm mangers can help.  Contact UFARM today for a free consultation.