$10,000 Investment in Henry County

US 40, Interstate 70, State Roads 38 and 234 and US 36 are each main roads, east to west, in rural Henry County, Indiana. The county is then divided right down the middle by State Road 3. But once you’re off the beaten, paved paths of these main routes, you’ll find narrow roads where our trucks and equipment travel to and from our Mt. Summit, Millville and Dunreith locations to meet the needs of area farmers and home heat customers.

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Harvest Land and Henry County have a strong, long-standing relationship. We made a move this week to ensure that well-working relationship continues.

Harvest Land partnered with CHS to contribute $10,000 towards the Grain Bin Safety and Rescue Training Area at the Henry County Emergency Services Training Center. 

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L – R: Scott Logue, Harvest Land President/CEO; Ron Huffman, Chairman, Henry County Local Emergency Planning Committee; Julie Lamberson, Harvest Land Risk Manager; and Brian Becker, Harvest Land Director and Henry County resident.

According to Purdue University research, in the last fifty years more than 900 cases of grain engulfment have been reported, with a fatality rate of 62 percent. In 2010, at least 26 U.S. workers were killed in grain engulfments − the highest number on record. The overall trend of increased on-farm grain storage only allows for more grain entrapments to happen around the family farm.

Every year accidents occur and responders are dispatched to assist, but most local responders arrive on scene with little to no training in the tactics or tools needed. The
intent of the grain entrapment addition to the Henry County Emergency Training Center is soybeanto add an option that addresses this issue. The completed grain portion of the center will provide responders and the ag community – including FFA members – a place to experience firsthand the dangers associated with entering into corn and soybeans. This training tool allows them to get a feel for both within minutes of each other, re-enforcing the differences in both commodities.

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A top down view of the proposed Grain Safety Training Area

At this time we know of no other facility that provides a place to practice real-world tactics
needed to rescue someone in trouble in both environments side by side. The layout of this
grain entrapment addition will also allow many viewers to see exactly what is taking place without need to share a viewport. It will truly be the first of its kind.

Perhaps most important: The Henry County Emergency Services Training Center is available to all those that wish to schedule its use for career, volunteer and agricultural trainings. Harvest Land is also going to use this facility to train employees and farmer-members, including students.

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We’re excited about this contribution to the Grain Bin Safety and Rescue Training Area at the Henry County Emergency Services Training Center and truly look forward to bringing dozens of employees, customers and students to this incredibly valuable site.

Together, we’re Cultivating Communities.

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Section 199A Update

Earlier in the year we shared with you the tax changes that accompanied Tax Cuts and Jobs Act of 2017, and, in particular, the new 199A deduction for farmer cooperatives and our members. Just weeks ago, lawmakers and tax experts introduced a “fix” to the unintended consequences included in the Section 199A provision of the Tax Cuts & Jobs Act. The proposal, which was signed into law by President Trump and will be retroactive to the start of the 2018 tax year on January 1, is intended to maintain tax relief for farmers as originally envisioned, while restoring to the greatest extent possible the competitive balance in the marketplace for cooperatives and non-cooperative ag businesses.

The National Council of Farmer Cooperatives, of which Harvest Land is a member, has issued an update and we’d like to share that with our farmer-members. Below, a list of frequently asked questions and answers:

Q: What is Section 199A?

A: Section 199A is a tax deduction that was included in the tax reform bill enacted in late December. Due to concerns that the provision would cause market disruptions, Section 199A has been amended with respect to transactions with cooperatives. The changes are retroactive to January 1.

Q: What does Section 199A do?

A: Section 199A has two purposes:

1. It provides a 20% tax deduction for all forms of businesses except C corporations. Because (most) C corporations received a 40% rate cut – from a top rate of 35% to a top rate of 21%, Congress recognized that other forms of business should receive tax relief. The 199A deduction applies to sole proprietorships, partnerships, S corporations, LLCs, etc.

2. It provides a replacement for prior-law Section 199 for cooperatives and their members.

Q: How does Section 199A apply to farmer cooperatives?

A: The calculation is the same as it was under prior-law Section 199 – it is 9% of the co-op’s qualified production activities income (QPAI). The deduction is limited to 50% of the co-op’s wages for the year that are allocable to domestic production gross receipts and may not exceed the co-op’s taxable income for the year. The co-op may choose to keep all or part of the deduction at the co-op level to offset tax liabilities; the remainder may be passed through to members.

 

Q:  How does the Section 199A deduction work for members of farmer cooperatives?

A: Farmers who transact with a cooperative on a patronage basis will calculate their 20% deduction on income from business conducted with the co-op, and will then perform the following calculation: Reduce the 20% deduction by the lesser of

(1) 9% of qualified production activities income allocable to such sales, or

(2) 50% of wages allocable to such sales.

A farmer’s Section 199A deduction will then equal the Section 199A deduction passed through to him or her by the cooperative plus the modi ed 20% deduction.

Q: Why is there a modification for farmers who do business with the cooperative?

A: The goal of Section 199A is to replicate prior-law section 199. Under “old” 199, the farmer would forego calculating his own 199 based on his on-farm wages, in exchange for using the co-op’s calculation and the possibility that the co-op would pass through its deduction. The reduction duplicates that dynamic in order to maintain the competitive balance that existed before tax reform.

Q: Could a farmer receive less than a 20% deduction when transacting with a cooperative?

A: Yes, if the cooperative has a low wage base relative to that of the patron or if the cooperative chooses to retain the deduction, the farmer’s total deduction may be less than 20%. Again, this reflects the dynamic in effect under old law Section 199.

Q: Could a co-op member receive a deduction in excess of 20%?

A: Yes, depending on how much deduction the cooperative passes through to its members. For example, a farmer with no wages (and joint taxable income less than $315,000) will receive a full 20% deduction on net income from sales to the cooperative, plus whatever deduction is passed through from the cooperative.

Q: Does the definition of “qualified business income” include crop payments (Per-Unit Retains Paid in Money).

A: Yes. PURPIMs were included under prior-law Section 199 and the IRS issued dozens of letter rulings af rming that treatment. The relevant language in Section 199A is identical to Section 199 and the Technical Explanation makes clear that any new regulations should be based on the Section 199 regulations.

Q: How is the provision of supplies treated under Section 199A?

A: The new law incorporates Section 199 Treasury regulations regarding supplies – namely, the definition of “agricultural or horticultural products” eligible for the deduction includes fertilizer, diesel fuel, and other supplies and products with respect to which the cooperative performs storage, handling, or other activities (see Reg. Sections 1.199-3(e)(1) and 1.199-6(f)).

Q: What if a farmer delivers product to a cooperative, but is not entitled to share in patronage dividends and is not otherwise entitled to participate on a patronage basis?

A: The farmer will receive the 20% deduction under Section 199A, but will not apply the reduction outlined above and will not be eligible for a pass-through deduction from the cooperative.

Q: What if a farmer’s operation is a C corporation?

A: C corporations are not eligible for any deduction under Section 199A. Lawmakers wanted to ensure that C corporations receive only the new, lower corporate rate, and not the additional 199A deduction. We are aware that some C corporation farms were taxed at 18% under prior law and are now taxed at 21%. Click here for a checklist for producers considering ownership restructuring in light of this restriction.

Q: What about Section 199 deductions generated in tax years beginning before the enactment of Section 199A?

A: A transition rule provides that Section 199 deductions attributable to taxable years beginning before January 1, 2018, may be utilized by taxpayers. The Technical Explanation specifies:

The proposal clarifies that the repeal of section 199 for taxable years beginning after December 31, 2017, does not apply to a qualified payment received by a patron from a specified agricultural or horticultural cooperative in a taxable year beginning after December 31, 2017, to the extent such qualified payment is attributable to qualified production activities income with respect to which a deduction is allowable to the cooperative under former section 199 for a taxable year of the cooperative beginning before January 1, 2018.

For more information on Section 199A, we suggest you consult your CPA or tax advisor for advice on your particular tax situation. In addition, the Joint Committee on Taxation issued a Technical Explanation of the bill and included over twenty pages on Section 199A.

All information provided as a resource from Land O’Lakes and the National Council of Farmer Cooperatives. You may print this full FAQ document here.

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A Pre-Plant Poem

A Pre-Plant Poem
by Harvest Land

Spring days are getting longer as we start to break the soil

Traffic slows behind equipment driven by local men of toil.

With a warm snap moving through you can almost cut the anticipation

Every move we’re about to make is a result deliberate conversation.

From plant to harvest, and plant again, we’re in a series of decisions

Analyzing data, selecting hybrids and programs and considering provisions.

Sometimes we forget how much promise can be in one tiny seed

Part of our job at Harvest Land is ensuring they get what they need.

We’ve been thinking about this crop since walking through the last

When time passes in seasons of work you come to realize just how fast.

Going forward our days will be designed around the warm sunshine or the rain

When you live your hours according to weather you come to terms with gain or pain.

And so we move into another planting season with anticipation far and wide

In high hopes that good help, weather, supply and parts all live in a time that coincide.

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Photo Friday: Investment in Eldorado Area

The small (some might say tiny) towns that dot the country side within our trade territory are special to us. Their small-scale grid of streets that travel out past the town limits eventually become the rural routes where our homes sit.

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The diners, post offices and parts stores that keep the commerce going are staffed with folks invested in these Midwestern burgs. The volunteers that give up their nights and weekends to answer the call of duty when an emergency erupts are our family, friends and former classmates. These are a few of the reasons why Harvest Land works to cultivate communities when we see an area of need.

Ohio has been a focus point for us to cultivate as of late.

Harvest Land recently donated a grain rescue tube to the Eldorado, Ohio fire department. The department needed the equipment to perform grain rescue should the emergency arise. Central Ohio manager, Adam Culy, organized the donation and also recognized a need for rescue training with multiple Ohio fire departments.

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Pictured from the right: Carlos Ramos, Adam Culy of Harvest Land, Atley Landes, Travis Simmons, Tom Evans, Stephen Evans, Bentley Evans, Wayne Rogers

So, in mid-March 35 firemen from the Eldorado, New Madison, West Manchester and New Paris fire departments performed a joint grain entrapment training at our Eldorado Ag Center. This Photo Friday includes some shots from that event.

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Seven Harvest Land employees were present for the training: Bob Brunk of Pitsburg, Gary Davis of Harvest Land Transportation, Adam Culy of Central Ohio Ag, Luke Dull of Eldorado, John Ott of Eldorado and Julie Lamberson and Nikki Pyott of Risk Management.

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We are thankful that our rural communities have so many volunteer firemen with courage to serve. Harvest Land is committed to providing resources to help our local departments.

 

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