Two heads of organizations say tax bill ‘nice’ – but not farm bill replacement

The U.S. Cattlemen's Association (USCA) President Justin Tupper and North Dakota Farmers Union President Mark Watne said the passage of the recent federal bill had provisions in it that improve crop insurance and the livestock indemnity and forage disaster programs, but it isn't a substitute for a new farm bill.

"We still need a farm bill, but the continuation of the farm and livestock programs were nice because they could have been stopped. But I was surprised to see them in the tax bill," Watne said.

"It was really kind of unique way to help livestock producers because the livestock industry has really benefited from these programs. We have had extreme weather as of late that has impacted livestock producers, and that bill has been a real saver to the livestock industry, so it's good that we have them to continue going forward," he added.

Also in the federal bill, Watne said there were increased estate and gift tax exemption amounts, crop insurance premiums cut, producers provided with the higher calculated payment rate for ARC or PLC, and the 45Z tax credit, which gives incentives for the production of low carbon emission fuels and provides support for domestic biodiesel and renewable diesel production.

Tupper agreed that while the provisions for livestock were nice, he hopes Congress will focus on the farm bill.

"They have kicked the can down the road for so long on the farm bill, it needs to get done. Now that the tax bill is passed, I hope Congress can focus on some of the things that need to happen within the farm bill," he said.

Tupper said the USCA believes they could get many new, important provisions for livestock producers in the farm bill.

While the tax bill did include some disaster payments, they want disaster payments to be permanent, so they don't have to ask for help every time a disaster occurs and then wait for years, in some cases, to receive payments. In addition, Tupper said they want the payments to reflect where the markets are.

"The market changes so much, so it can be very different, especially in indemnity-type payments from year to year, so we need to be able to have the flexibilities in there to adjust for what the market is paying," Tupper said. "We're at the highest prices we've ever seen, so disaster payments need to correlate with how the market goes, too, not just be a direct one-time type of payment."

Tupper said there were real benefits for the livestock industry in the recently passed tax bill, especially the estate tax provision.

"I think one of the biggest things (that was in the bill) is the taxes. We would've had the largest tax increase, and if we want to continue to pass these ranches down, we've got to be able to figure out ways to get these young people to come back to the ranch," he said. "Some of the tax breaks and the way the structure is on the tax system, we have to continue to work on that, too. This bill was big and helpful, but we've got to incentivize this older generation of ranchers to continue to want to sell the ranch to a younger generation, not Corporate America."

The bill establishes a payment rate for losses due to predation at 100 percent of the market value and losses due to adverse weather or disease at 75 percent of the market value.

It introduces additional payments for unborn livestock death losses incurred on or after January 1, 2024, at a rate determined by the Secretary, not exceeding 85 percent of the payment rate for the lowest weight class of livestock.

The bill addresses the Livestock Forage Disaster Program, allowing for two monthly payments and specifying eligibility criteria based on grazing periods; the Emergency Assistance Program, providing emergency assistance for cattle with specific payment rates and eligibility criteria; the Death Tax, increasing the estate and gift tax exemption amounts, changing the exemption amount from $5 million to $15 million and updates the applicable years for the exemption; and the Foreign Animal Disease Prevention, specifying funding allocations for foreign animal disease prevention programs.

In addition, the tax bill allowed farmers to deduct the full cost of new buildings and structures in the year they were purchased and extended key biofuel and renewable energy credits. It included higher threshholds for 1099-K reporting, and strengthened crop safety nets.

Tupper said he and his wife, Brooke, run about 600 mother cows and some yearlings near St. Onge, S.D, which is about 60 miles north of Rapid City. He is also owner and manager of St. Onge Livestock sales barn. The couple has four children, and Tupper has been president of the USCA for three years.

"The U.S. Cattlemen's has been an organization that works for the independent cattle producers, and it has been good," Tupper said. "I think it's always hard to get some of the things we believe in across the finish line. It's not always the same as the corporate world, but I think we have stood our ground and worked hard to try to be the best for the independent producers."

Tupper said independent cattle producers do not want the government paying for everything for them. The want the market to work for them, but disasters are something that no one can forsee or pay for by themselves.

On the other hand, Tupper feels that the tax bill was an expensive bill and that's bad for future generations, too.

"It would be nice to cap some spending down the road here and get the budget in line," he said.

Tupper also spoke about herd expansion, something that hasn't happened yet, mainly due to disasters and no emergency payments going to producers because there was no permanent disaster program in the farm bill.

"Farmers and ranchers are the backbone of the country and food security is national security. We need to make sure that we can produce what we need within the borders of this country. We're definitely for exports and markets, but we have to make sure we can take care of ourselves first."

Meanwhile, USCA is concerned about the USDA's decision to reopen southern ports into Mexico while there is still a screwworm outbreak. The USDA just announced the groundbreaking of a domestic sterile fly dispersal facility in south Texas, and it is not built yet.

The phased reopening began with Douglas, Ariz., on July 7, and will continue with Columbus, N.M., on July 14, and Santa Teresa, N.M., on July 21. Other ports, including those in Texas, are under consideration for reopening contingent on continued monitoring and compliance with safety protocols.

"Until APHIS has full confidence in sustained containment and eradication of these outbreaks, and all necessary safeguards have been independently verified and communicated to the industry, USCA urges USDA to maintain full restrictions on southern port entries for susceptible livestock," Tupper said.