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May 2009 Archive for U.S. Farm Report Mailbag

RSS By: U.S. Farm Report, US Farm Report

Comments, questions, opinions...this is your chance to speak out regarding anything and everything reported on U.S. Farm Report. Viewer feedback updated regularly.

Questions, Comments and John's Response

May 29, 2009
   Do you have any information where I can get realistic cash rent prices? I am renegotiating my farm rental agreements this fall and know I am way below average currently.  Thanks for your time.  Deb
John's Response: 
   Thanks for watching USFR and for your feedback.  You are in luck - the USDA just started publishing county-level cash rent data this spring.  You can read more about it on my blog by clicking 
here .

John,
    You and others on U.S. Farm Report continue to be a highly rated TV program at our house.
When the need presents itself, I always encourage folks to watch your program. From time
to time I also mention it in my outdoor column which appears in the Geneseo Republic.
    It was nice what you mentioned about rural cemetaries, and the unknown person(s) who
care for those final resting places. I have always admired those nicely kept areas as I
travel through Henry County and other counties, as well. Keep up the great work! 
Sincerely,
Dan & Lorna Dauw
Colona, IL

John's Response:  
   Thank you for watching USFR and for your gracious and frankly immensely cheering support.  This spring has been a struggle to smile about.  I hope yours is going well.
 

Say NO to Wind Turbines

May 18, 2009
Placing wind turbines on flat black Muscatine and Tama soil in Illinois is not the best use of the land.  Property values of all homes within the footprint of a project will be drastically reduced resulting in less county revenue. These concrete and steel noisy jungles belong on crap ground in North Dakota, not in my backyard. Promises of money for schools, townships, and county are driving these monsters. Schools are asked to abate taxes for 3 years while the farmer and company CEO rake in the cash. Give me another nuclear reactor any day…for each tower on this highly productive soil two more children will starve to death and company CEO’s will gain 4 LBS. We cannot feed the increasing population now, what will happen when we take these additional acres out of production?  These are not wind turbines but tombstones...please do your own research.
Gary 
Farmer / Licensed Realtor

Lots of Letters

May 13, 2009
*The May 9-10, 2009, edition of "U.S. Farm Report" drew quite a bit of viewer response on a variety of topics...

John,
 
You are absolutely right about this country's stubborn refusal to switch to the metric system.  I am now 53, but when I was in 7th grade, we were taught the basics of the metric system, and they built on it every year through high school.  Our teachers kept telling us that the US would be switching within 5 to 10 years.
 
I now work within the university system, and it is a constant "sandburr under the saddle" to have to constantly switch back and forth between metric (nice, easy base ten conversions) and our outdated Old English (do any two measurements use a common unit?).
 
I truly hope this country makes the switch sometime before I die!
 
Sincerely,
Kent Wagoner
Parma, Idaho


   I attended a land auction yesterday and was shocked at what it sold at.   A 180 acre plot sold for $8000.00 an acre, an 80 acre field sold for $8025.00 an acre.  It is very good land, level, etc.    Please explain to me how a farmer can make any money with $4.00 corn and $10.00 beans.  Even if it made 250 bushel corn and 50 bushel beans.  I just don't get it, why is ground going for so much?
Shirley Weaver
Illinois


   I just watched your editorial on agricultural measurement on RFD TV. I found myself yelling at the TV, "Yeah, right on!" You are absolutely correct that our measurement system is confusing, but more importantly, self defeating.
   When I was in grade school, up through 5th grade, the only measurement system I was exposed to was the "standard" U. S. system; pecks, bushels, rods, furlongs, fathoms, etc. Then toward the end of 5th grade, our teacher told us about this other system, used by every country in the world except the U.S., in which there were just 3 units (meters, liters, grams), and to scale up or down, all you did was multiply or divide by factors of 10. I am still angry that the existence of the metric system was presented to me so late in my schooling life (and I just turned 60 this year).
    In 1982, I read Dan Morgan's book "Merchants of Grain," which covers the world food storage and transportation system. Morgan writes extensively about Cargill, Continental Grain, Bunge, Louis Dreyfus, and Andre.  The book contains many references to bushels, but most references are to "tonnes" (metric tons). This led me to believe that the conversion of American farming to metric units was a "done deal." But, your editorial points out that there is still significant resistance. "Merchants of Grain" contains a quote that may be of use to overcome the resistance. Socrates said, "No man qualifies as a statesman who is entirely ignorant of the problems of wheat." One of the biggest "problems" is how a harvest is measured.
    One last thing. A few years ago, NASA lost a spacecraft at Mars because of a misunderstanding between two engineering groups -- one group thought a particular measurement was in feet and the other thought it was meters. The misunderstanding was only discovered during the investigation of the disappearance of the spacecraft. Confusing and self defeating to the tune of millions of dollars.
Keep up the good work!
Ed Jones
Palmdale, CA


Mr. Phipps,
   I enjoyed your weekend report on Ukraine. I have been in Ukraine since
1994. From 1994 until 2003, I was there every summer working with a
friend doing custom harvesting. We had combines and also sold machinery.
In 2003 I started farming in Cherkasy oblast. By 2006 we had 7,00 ha.
In the spring of 2006 we sold our farming enterprise to a large company
and then began to work with them to grow to 300,000 ha. I was
responsible for starting all new farms and getting them to use western
methods in farming.  Now I am working with some Dutch people to get involved again with just
5,00 ha.
   The reason I write is to just give you some highlights of what is
actually happening now in Ukraine. The past 3 years has seen a lot of
money and companies buying up the leases on large tracts of land. They
are all having the same problems. Plenty of money, plenty of business
knowledge, severe shortage of farmers that know how to farm. Most are
relying on the local agronomes to do the farming. Since the crash of
capital last September there has been a general problem all over
Ukraine. This spring has seen dry weather and freezing temps, causing
the rapeseed to die. Winter wheat lacks fertilizer and chemicals. There
will be a lot of barley planted because it grows cheap.
 Last year corn was the big item, but a lot stayed in the field because
it cost more to dry it then they could sell it for. In November corn was
$50 metric ton.  For Ukraine to get going again will take a lot more money and more
expertise.  Little farmers ( 100 to 1,000 ha.) generally lack access to stable
capital and fair interest rates. The large companies are more like the
old Russian style agronomy. The decisions are made in large offices and
the leaders do not get their hands dirty and really do not know how to
farm.
   If Ukraine would make money available to the small people, I think
that they would see in 5 to 10 years a real farm boom. These little
farmers love the soil, and would make a good job of it if given some
govt. long term loans. Unfortunately this will not happen.
   All of the things that were taken over during the switch from socialism
to capitalism (factories, mines,utilities, etc.) were stolen by the
powerful. The only thing left to steal is the land from the little
villagers. That is why you will find out that almost all of the members
of the Rada ( US senators equivalent) have farming operations.
   When you farm over there you have to get leases signed from the locals
into your control. They were easy and cheap to get 5 years back. Some
just for coming in and beginning to farm the fields. 2006 and 2007 saw a
number of companies formed and getting the lease rights to large tracts.
For most of these companies it was to have the right to purchase the
land when the laws are changed to allow this. It got to be so
competitive that they started to buy from someone that had organized a
village $300-500 per ha. just for the lease rights. Some even went to
$1,000 per ha. Now with the crash, you can get land again for free if
you will farm. Now this is just to have the right to get the lease. You
will still pay to the little ladies in the village a yearly fee for
renting. Usually a ton of wheat per Pie, which is around 4 to 5 ha.
Jeffrey L. Rechkemmer    
 

Health Care Comments

May 05, 2009

*On the May 2-3, 2009 edition of U.S. Farm Report, host John Phipps commented on health care in rural America - perspective that generated quite a bit of viewer response.  We are posting John's comments in full, followed by the viewer reaction...

John's World Commentary:
    THIS WEEK I HAD A VISIT ON OUR FARM FROM AN OLD FRIEND PASSING THROUGH. HE USED TO BE MY FERTILIZER AND SEED SALESMAN BEFORE HE MOVED BACK HOME TO BE CLOSER TO HIS FAMILY FARM. 
    NOW HE AND HIS BROTHER ARE BOTH WORKING OFF-FARM JOBS AND TRYING TO GROW THEIR OPERATION. IN DESCRIBING THEIR PLANS, HE CASUALLY SAID SOMETHING THAT NEARLY BROKE MY HEART.  WE'RE HOPING TO ADD SOME RENTED GROUND SO WE CAN BRING DAD BACK TO THE FARM, HE SAID. HIS FATHER, WHO IS ABOUT MY AGE, HAD TO LEAVE THE FARM TO WORK IN A FACTORY TO GET AFFORDABLE HEALTH INSURANCE AFTER HAVING HEALTH PROBLEMS.
    THE DEVOTION OF THE BROTHERS WAS PROFOUNDLY TOUCHING, AS WAS THE PREDICAMENT OF THE PARENTS. INDIVIDUAL HEALTH INSURANCE IS BECOMING ALMOST IMPOSSIBLE TO OBTAIN AT ANY PRICE AFTER AGE 50. BEING GROUPLESS CHAINS TOO MANY TO OFF-FARM JOBS. STATE PROGRAMS TO ASSIST SUCH UNINSURABLES ARE OVERWHELMED.
     I FAVOR FREE MARKET SOLUTIONS AS A RULE, BUT THIS MARKET IS BROKEN. AS THE NUMBER OF UNINSURED GROWS AND EMPLOYER COVERAGE DECREASES, THE LINKAGE BETWEEN EMPLOYMENT AND HEALTH INSURANCE BECOMES MORE UNWORKABLE.
     AMERICA CAN DO BETTER THAN THIS. WHILE I OPPOSE FIRST DOLLAR COVERAGE AND SINGLE PAYER PROGRAMS, HEALTH CARE REFORM, INCLUDING COST CONTAINMENT AND UNIVERSAL ACCESS SHOULD BE A TOP PRIORITY FOR FARMERS AND NON-FARMERS ALIKE.

*Viewer Comments:
   I believe you are right that health care needs repair.  However I believe that it has to be a overall that makes sense.  First we need to have a meaningful tort reform.  When we have 10 lawyer commercials to 1 on health products their is a problem.  With that we need some control on profits by drug companies, hospitals, doctors and other health care services.  I do not want the government to run banks, car companies and health care.  They are not very efficient.  I hope they leave this to meaningful thought.
Delwyn E Larson
Phoenix, AZ


   Glad to see  john  can  use an isolated incident to promote socialism
the  health industry would not  be  served if  we  had  to  go  through  a bureaucrat  to  get  an appointment  to  see  a  doctor----and  can you  imagine  how  much  graft  would  be  built into  that  industry if  the  politicians  were  allow  to  infiltrate it???
Don Beaver


   We are farmers here in central Ohio and our OPPOSED to a Government run health care system !! We are on Medi-Gold and it is an EXCELLENT health care system !! If Obama gets a government run health care system it will be VERY COSTLEY and will be POORLEY RUN !!! KEEP the Government OUT of health care !! People from other countries with Gov. run health care come to the U.S. when they can NOT get treated in their country !!! 
Joe Fox family 
Lancaster, Ohio


   John, are you a conservative or a liberal? If this is your first time to comment on national health care, what took you so long? First Lady of the United States Hillary Rodham Clinton was trying to do something 16 years ago in January 1993. The conservatives killed it with the "Harry and Louise" television ad. Shame on them!
   I know and you probably know of people our age waiting to get surgery done after they are old enough to get it paid for with Medicare. You and I should be mortified to live in the wealthiest country in the world with this poor of national health care.
   We should immediately support a Medicare buy in for those of us over age 50. A rate similar to the cost of health care at a very large profitable corporation health group would be fair. Eventually something like this should be available to everyone. Medicare is not perfect, but I don't hear many conservatives attacking it. This could be done without raising taxes!
Chuck Gensler
Shullsburg, WI

 

Death Tax Debate

May 05, 2009
Editor's Note:  John's mailbag segment focusing on the "death tax" created quite a bit of viewer feedback...below are his comments in full, followed by viewer reaction:

*Farm Report Mailbag from May 2-3, 2009:     
    TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAIL BAG...
    THIS WEEK I THOUGHT I WOULD ADDRESS A PERSISTENT TOPIC. THIS ONE IS FROM GARY WALKER IN PUEBLO, COLORADO.
     "CONGRESS IS PONDERING WHAT TO DO WITH THE AGRICULTURAL DEATH TAX. THE LOOMING CRISIS IS HOW TO KEEP THE FAMILY FARM OR RANCH."
     GARY, MANY FARMERS AND RANCHERS HAVE BEEN CONVINCED THIS TAX THREATENS THEM. BUT AFTER ADMINSTERING THREE FARM ESTATES, I THINK WE'RE BEING USED.
     FIRST, THERE IS NO AGRICULTURAL DEATH TAX. AFTER ALL, IF THERE WAS A DEATH TAX EVERYONE WOULD PAY IT. INSTEAD ONLY - ABOUT A QUARTER OF A PERCENT EVEN FILE AN ESTATE TAX RETURN. EVEN FEWER PAY ANY TAX.
     RIGHT NOW IT LOOKS LIKE THE ESTATE TAX COULD STAY AT 2009 LEVELS.
     UNDER THESE RULES, THE NONPARTISAN CENTER FOR TAX POLICY ESTIMATES ONLY ABOUT 100 SMALL BUSINESSES AND FARMS WOULD OWE ANY TAX IN 2009. BLUNTLY PUT, THE IDEA FAMILY FARMS ARE BEING DEVASTED BY ONEROUS DEATH TAXES IS A MYTH.

*Viewer Reaction:
John - Your comments seem to imply that keeping the 2009 death tax rates is acceptable. You are a farmer that is thinking wrong. A tax with a pulse will keep living. Have you forgotten that President Reagan lowered taxes from 70 percent to 28 percent? Have you forgotten that President Bush 43 lowered death taxes more? The death/gift tax is unfair and wrong. Stand up and get it abolished.
You may want to address the concentration of entities getting too large and hurting small business people, but don't fix it with death and gift taxes. Take a look at what happens to wealth in the third generation of a family. It is spent back into the economy.
Don't let us get back to 70 percent income tax when trying to pay for farms and 70 percent death tax when the next generation wants to farm.
Back to the top, you should be a compassionate conservative!
Chuck Gensler
Shullsburg WI


I am totally against this proposed estate tax.  Just another means the government wants to use to take money from the people that are the pillars of this society.  Our government is totally out of control with more strangling taxes. I am not impressed with the road our government is taking at present.  Just look at our inept government's way of handling info on the H1N1 virus with repeated request to not use swine flu as it's name. The CDC first said no, they would not change the name. They have to wait for a week or two before they do anything about changing that stance. That of course is after the swine industry in America takes a major financial downfall. Well, here we go again hurting the american farmer.  I am not surprised if they could care less about the welfare of our farming community, I am sure they are more interested in  loosing taxes from these businesses instead of the welfare of the families.  The powers that be in our congress and senate are crippling our country and I am just wondering when the real americans are going to wake up and do something about it. It is evident there are too many greedy people throughout our nation  Just like a statement from Abe Lincoln that he took from the bible " A house divided can not stand."  It seems like legislation in our government is designed around each legislator's agenda of power and how will this benefit me mentality Sad to see this getting worse every year in our government's leaders.
Thank you,
Frank Scott
Shullsburg, WI

The host is an idiot when it comes to estate taxes.  He said there is no such thing as a farm death tax, and after administering three estates himself, he knows that the death tax doesn't affect very many farms or ranches, and therefore is not a problem.
Although I live in PA now, our ranch, the ranch I grew up on, is in the Hill Country of South-Central Texas, about 45 miles northwest of San Antonio.  My dad never made more than possibly $12,000 or $14,000 a year off that place.  But because that area has become a very popular retirement and recreational area, the farms and ranches are worth a ton.
At current levels, the estate tax exemption is $3.5 million.  Our last 1,000 acres sold for almost $5.5 million.  That has not passed to us...the children...yet.
What that means for anyone trying to keep the place in the family, let's say a place our neighbor's size, which is 7,500 acres, is a taxable estate of over $41 million dollars.  Your host is going to tell me that isn't a problem???
I don't know where his experience handling a whole, whopping 3 estates took place, but it wasn't anywhere I'm familiar with.
In addition, although the estate tax exemption is unlimited in 2010, by 2011 it reverts to $1 million.  So my neighbor's parents would have to pass away in 2010, or else they're screwed!  And that's not taking into consideration any changes Congress may make to the estate tax laws.
In the Hill Country of Texas, 7,500 acres will be hard pressed to run 200 animal units.  It's canyons, rocks, and cedar, mostly, with some really pretty country interspersed.  But it's not good ranching country.  You can make a living, barely.
Assuming they run 200 mother cows, at current feeder calf prices, and average costs, with 80% production every year, you'd sell 160 calves (if you didn't keep any) for about $400 a head, after feed and upkeep.  $64,000 gross, before taxes.
Running 200 head of cattle is a lot of hard work, by yourself.  And you're not going to make anywheres near enough to pay the estate taxes on $41 million in value!  Even assuming a deduction for the parents' basis, the estate is going to be multiple tens of millions.  My dad's basis was less than $100 an acre, on land that sold for $5,500 per acre!
By the way, I have friends and relatives who have written some big checks to the IRS, and who only had the money to do so because they sold the place.  Couldn't keep it if they wanted to.  So tell your host he's way off the mark.  Estate taxes are a problem, when you're trying to hold on to the place.  And they're unfair when you sell it, too.
George Flach
Leechburg, PA
 
   I caught the very last part of your broadcast this morning, May 2, when you commented on the estate (or so-called "death" tax).  I appreciated your comments and agree completely.  The "death" tax is a myth as you pointed out and the estate tax is probably useful and productive at least in my understanding.  Thanks for brave and honest reporting.
Paul Coffman
South English, IA 


  I love your end of the show political comments.  Once again you are right on with your comment about the "death taxes".  I get the sense that you are neither Democrat or Republican but just plain Common Sense.   And you are not afraid to say what makes sense even though it might inflame your BASE. 
Even the two richest men in the world want to keep estate taxes in place.
I'm so sick of the attitude that we should get all the government payments and goodies but we don't want to pay any taxes.
Gary Vanderwerf
Windom, MN

 
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