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Texas Agriculture Archive

March 5, 2004

Ranchers lose big with BSE incident
The Agriculture Department says U.S. beef producers will see a drop this year of $10,000 on average in their net cash farm income because of the Dec. 23 Washington state BSE incident. U.S. beef exports are projected to fall 90 percent this year.

Just as troubling is that producers can expect to pay up to 16 percent more for corn and soybean crops than they did in 2003. However, said USDA economists, the financial outlook for U.S. agriculture still remains strong in 2004 because of higher priced corn and soybeans and a strong demand for cotton.

Crop receipts are forecast to increase by more than $7 billion.
Source: AFBF Executive Newswatch, Feb. 19, 2004

Catfish value up slightly over 2002
Catfish growers in the 23 selected states had sales of $425 million during 2003, up 3 percent from the previous year. The top four states (Mississippi, Alabama, Arkansas, and Louisiana) accounted for 95 percent of the U. S. total sales.

Nationwide, sales of all food-size fish increased 4 percent from 2002 to $397 million. Fingerlings and fry sales totaled $21.2 million, an increase of 22 percent from 2002. Sales of stockers totaled $6.21 million in 2003, a 51 percent decrease from the previous year.

By point of first sale, direct sales to processors accounted for 94 percent of the total sales of food-size fish while 85 percent of the stocker sales were to other producers. Remaining sales were for recreational use, to live haulers, or for retail, government, or other uses.
Source: NASS; Catfish Production, Feb. 5, 2004

U.S. ag exports hit jackpot in 2003
For 2003, U.S. agricultural exports equaled $59.6 billion, a gain of $6.4 billion over 2002 and the second largest in U.S. history. Imports hit their 12^th consecutive record, reaching $47.3 billion for the year, up $5.4 billion from 2002. A depreciation of the U.S. dollar helped promote gains in export value and also restrained import growth.

The agricultural export surplus rose by $1 billion in 2003 to $12.2 billion.

Soybeans, cotton, and red meats showed the strongest gains in export value over 2002. Tropical products, such as cocoa, along with vegetables and preparations, and wine were responsible for the growth in imports. Value of imports of cocoa rose $670 million, vegetables $780 million, and wine $595 million.
Source: USDA; U.S. Agricultural Trade Update, Feb. 13, 2004

House looks at mandatory ID
A mandatory animal identification program has been introduced in the House of Representatives.

Under the bill, the government would buy tags and livestock producers would be required to attach them to animals. The new system could be used to trace the history of a diseased animal within 48 hours of discovery.

The bill provides $175 million to implement the program, and the program would have to be set up within 90 days after passage. Some program to trace animals will probably be passed by Congress this year.
Source: Doane's Agricultural Report, Feb. 13, 2004

Don't forget tax law changes
Here are this year's tax law changes of particular interest to farmers (beyond the bump in the personal exemption to $3,050):

• There are new capital gains rates for sales completed after May 5, 2003. The 10 percent rate dropped to 5 percent and the 20 percent rate fell to 15 percent.

• Certain dividend income is now taxed at the lower capital gains rate.

• The Section 179 expensing option is now $100,000 through 2005.

• The deduction for self-employed health insurance premiums was raised to 100 percent.

• 50 percent depreciation is allowed on some new property acquired after May 5, 2003.

• Income averaging is allowed again.

• Crop insurance proceeds received in 2003 can be deferred into 2004.

• Gains realized due to forced liquidation of livestock may be delayed.

If any of these apply to you, spending a little time with your tax advisor may save some money.
Source: Doane's Agricultural Report, Feb. 13, 2004

No farm bill after 2007?
The current farm program may be the "last of its kind" according to Rep. Marion Berry (D-AR).

Because of the huge and growing budget deficits, Berry doubts future farm bills will be funded anywhere near the levels of today. In fact, he recently told a group of Arkansas sorghum growers they should consider the possibility of "no farm bill" after the current one expires with the 2007 crop year.

Berry says that 10 years from now the government could be $10 trillion in debt. In that situation, spending on agriculture will be a big target for cuts.
Source: Doane's Agricultural Report, Feb. 20, 2004

Manure management gives value-added product
"Next generation manure management" is the term Premium Standard Farms, the nation's No. 2 hog producer, is giving to a new system.

The process, patented by Chrystal Peak Fertilizer Co., turns the nutrients in swine waste into a commercially viable, high-value commercial fertilizer.

It even captures dust and gases and recycles them back into the fertilizer, as well as generating the energy needed to dry the product.
Source: Doane's Agricultural Report, Feb. 20, 2004

Guess what? Property taxes again increase
According to the latest State Comptroller's report, in 2002, about 3,653 local taxing units levied more than $27 billion in property taxes, about 8 percent more than in 2001.

Local property taxes use appraised values established by county appraisal districts (CADs). CADs deduct exemptions from appraisal values to arrive at taxable values. Local taxing units include counties, school districts, cities and special districts such as junior colleges, hospitals, utilities, flood control and other special purpose districts. Exemption amounts and types offered by taxing units may vary.

School property taxes—imposed by 1,033 independent school districts (after consolidations) and representing about 60 percent of total property taxes—totaled more than $16.4 billion in 2002, about 8 percent more than in 2001. Local school taxable values (after exemptions) increased 6 percent to reach $1 trillion.

City property taxes also increased about 8 percent to more than $4 billion. Total city taxable property values for 1,031 cities increased 6.5 percent, to $736 billion.

County property taxes topped $3.8 billion in 2002, with an 8 percent increase. Looking at county general funds, county taxable values increased almost 6 percent to more than $1 trillion.

The levy of 1,337 special districts rose by 6 percent to total just under $2.9 billion.
Source: Statement, November 2003