The BioFuels seCToR offers potential to launch “another boom in agriculture,” a university of Illinois economist told farmers last week. ........................................5
The sloW paCe of U.S. corn exports is not the result of quality issues with the drought-stressed crop, according to a recent U.S. Grains Council report. .....................................8
FaRm ReTuRns are expected to remain strong in 2013 as far mers generally should have more bushels to sell, barring a repeat of this year’s weather. ......10
Monday, December 17, 2012
Two sections Volume 40, No. 50
Rock blasting imminent, seen as partial solution BY MARTIN ROSS FarmWeek
Periodicals: Time Valued
As contractors ready to pull rock out of the Upper Mississippi River, Illinois Farm Bureau pledges to “pull out all stops” to ensure grain and farm inputs continue to flow on the river. IFB President Philip Nelson hailed U.S. Army Corps of Engineers indications that rock blasting in the Thebes reach of the Upper Mississippi could begin this week. Removal of high rock pinnacles in the Thebes-Grand Tower area is seen as crucial to ensuring an adequate nine-foot navigation channel in the St. Louis to Cairo region. The Corps originally suggested work might not begin until February under the agency’s normal contractor bidding process, but U.S. Sen. Dick Durbin, Illinois Gov. Pat Quinn, and others, pushed to expedite rock blasting and removal. A pair of contractors has been selected to remove rock in a two-step process over the next 60 days, national Waterways Council Inc. (WCI) Vice President Paul Rohde told FarmWeek last week in St. Louis. IFB continues to seek expe-
dited pinnacle removal at a second Grand Tower site. WCI and the American Waterway Operators jointly argue rock blasting is “only a part of the solution to sustain shipping on the Mississippi River.” The Corps release of “sufficient water” from Missouri River reservoirs, in conjunction with pinnacle removal, is crucial to head off closure of the Mississippi possibly by Dec. 24, the groups maintained. Corps officials maintain they lack authority to deviate from winter water withdrawal guidelines for the Missouri River (see page 4). “We maintain they do, indeed, have the authority; they’ve done it before,” Rohde countered. IFB supports a presidential emergency declaration that would enable agencies to take needed steps to ensure an open navigation channel and White House authorization to “deviate” from the Corps’ Missouri River Master Water Control Manual. In Washington discussions
In Washington last week, Illinois Farm Bureau President Philip Nelson, left, discusses concerns about navigation on the Upper Mississippi River with U.S. Sen. Dick Durbin, a Springfield Democrat, who has intervened with the U.S. Army Corps of Engineers in the matter. Durbin is expected to provide an update on the situation today (Monday) in St. Louis. (Photo courtesy of Durbin staff)
with Durbin last week, Nelson prioritized the need to keep the Mississippi channel open for winter delivery of fertilizer supplies to ensure farmers are “prepared for the spring season.”
“We complimented the senator for pulling out the stops to try to make sure river traffic is not shut down on the Mississippi,” Nelson said. “We pointed out to him the tremendous amount of com-
merce that takes place on the river. This is a huge commerce issue, and he knows it. “Durbin hasn’t given up on (possible Missouri releases). He See Blasting, page 4
‘Fiscal cliff ’ uncertainties hinder farm planning Nearly two years after Congress pulled family farms and businesses from the brink of potentially staggering estate tax liability, producers are staring into the murky depths beyond the “fiscal cliff.” During last week’s Farm Economics Summit in Champaign, University of Illinois Extension ag tax specialist Gary Hoff noted the “fine mess” currently confronting Illinois farmers “because Congress hasn’t acted.” Hoff cited uncertainty about the future of bonus depreciation or Section 179 expensing, which he deemed “the taxpayerbusinessman’s best friend” in terms of enabling producers to reduce tax liability via investment in equipment. He noted one Illinois operation that was able to substantially offset 2011 income tax liability through a $3 million-plus bonus depreciation deduction. He said he is unsure where Section 179 proposals may fall (the maximum deduction is set to drop from a current $139,000 to $25,000 in 2013), and has heard no real indication whether bonus depreciation will
be extended. “That gives the (Internal Revenue Service) fits, it gives tax preparers fits, and it gives you fits, because you don’t know how to tax-plan,” Hoff told farmers. Of particular concern is Dec. 31 expiration of the $5 million estate tax exemption and 35 percent “death tax” rate. If Congress neither extends that exemption nor establishes a new one, the estate tax would fall back to a $1 million exemption and a 55 percent rate. According to Rick Morgan, Country Financial senior financial security consultant, that would result in “a significant increase” in the number of Illinois families exposed to tax liability in 2013. While Illinois’ estate tax is set to rise from a current $3.5 million exemption to a $4 million threshold on Jan. 1, many families would face dual liability given rising statewide farmland values, Morgan warned. He recommends farmers explore basic estate planning strategies that reduce exposure “regardless of what the exemption is.” In the event a family can’t avoid hitting tax
FarmWeek on the web: FarmWeekNow.com
thresholds, it should plan to ensure the death tax hits “the smallest percentage of the estate possible,” Morgan told FarmWeek. Each spouse receives the federal exemption, and estate planning often focuses on dividing property between spouses and distributing assets at the first spouse’s death to maximize use of exemptions. Producers also may use current “specialuse valuation” provisions that factor in the existing (and prospectively lower) production value of farm real estate rather than merely its conventional fair market value. Other strategies for discounting estate value include use of family limited partnerships or restructuring the percentage of interest various family members hold in a farm. Further, a farm owner currently can give up to $13,000 per year to as many people as he or she chooses without those gifts counting against a $5 million lifetime gift See Cliff, page 3
Illinois Farm Bureau®on the web: www.ilfb.org