Episode Transcript
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Speaker 1 (00:00):
The American Family Farmer podcast, sponsored in part by Caldron,
the Safe, proven Way to lose weight. Check it all
out at toploss dot com. I'm Doug Stephan. This is
the American Family Farmer for those of us who own
small family farms. Although even what eighty nine or ninety
percent of all the farms in America are owned by families,
(00:21):
and some of them are pretty big. There are people
that have six thousand and eight, ten thousand acres, but
still is a family farm. But the one thing that
I really wanted to focus on when I get started
doing this program is the folks who were like me.
Maybe you milk one hundred and fifty cows, maybe you've
got four hundred acres. Maybe there is a circumstance that
(00:44):
has gone on for years and years, and now you
can't quite figure out because things have changed so much,
how to do what it is that you love doing.
Speaker 2 (00:53):
I can certainly say that for myself.
Speaker 1 (00:54):
So that's why we put together The American Family Farmer
a number of years ago, and we start each program
Doug stefan with you as an overview of some of
the news from this past week that.
Speaker 2 (01:07):
Affects you on the farm.
Speaker 1 (01:09):
I guess I'm going to start with and yet another
piece of analysis for the One Big Beautiful Bill the
Act and how it affects farm and family and food.
There are some key estate planning and tax changes that
farmers need to know about. This comprehensive tax reform is
(01:29):
part of the Big Beautiful Bill. New opportunities for farm
family succession and agricultural business operations in general. So, looking
back on when the President signed the bill into law,
it was I think it was fourth of July. As
a matter of fact, boost farming succession planning. It's really
important that that be done. The death tax has killed
(01:53):
lots of farms in America, and so I want to
look at some of the things like tax exclusion. The
federalistate tax exclusion permanently increases to fifteen million dollars per
person next year. This amount will be indexed annually for inflation.
Without this increase, the exemption was set to drop to
(02:15):
seven million at the end of twenty twenty five. So
those of you who think the Democrats have the right idea, think.
Speaker 2 (02:21):
About that for a minute.
Speaker 1 (02:23):
Other things to think about in the One Big Beautiful
Bill Act. There's a new type of savings investment for children.
Government's going to give one thousand dollars bonus for children
born in the years twenty twenty five to twenty twenty eight.
The accounts can be set up for any child younger
than eighteen.
Speaker 2 (02:43):
Up to five thousand dollars.
Speaker 1 (02:44):
Will be contributed to the account of a year until
the child turns eighteen. The funds and the account will
grow free from taxes until the child turns eighteen. Next up,
bonus depreciation. This was made permanent for qualified property put
into service after January nineteenth of this year. Also, the
Section one seventy nine depreciation limit raised a two and
(03:07):
a half million. These depreciation options may be helpful for
those who put new equipment into service this year. And
then there's the energy situation. A lot of clean energy
credit programs where cut or being phased out. Actually, this
will affect the incentives of wind and solar projects that
are being placed on farmland. I have one of those
(03:30):
in process right now. As a matter of fact, and
let's see here the farm family payment limitations. For farms
running as a pass through like a limited liability company
or rest corporation are not taxed as C corporations. Will
be the same as those for general partnership. That sounds
kind of complicated, so I'm.
Speaker 2 (03:52):
Not going to dig into that too much.
Speaker 1 (03:54):
I do have an interest in you knowing more about
the capital gains situation with a big, beautiful bill. The
capital gains tax resulting from the sale of qualified farm
land to a qualified farmer can be paid out over
a four year period. There are some circumstances this will
be helpful in moving the seller.
Speaker 2 (04:14):
Into a lower tax bracket.
Speaker 1 (04:16):
When selling land to another farmer. It'll be helpful when
selling land that has a low basis, or for land
that does not have a step up in basis, a
land that's been in the same family for.
Speaker 2 (04:28):
A long long time.
Speaker 1 (04:30):
So I guess, in terms of finally looking at this,
if your family is thinking about how to transfer your
farming legacy to the next generation, this is a good
time for you to talk with your attorney, accountant, or appraiser.
The tax code may have changed, but the principles of
good planning have not. So my suggestion is you act
(04:50):
now while the enhanced deductions are permanent and there's a
lot of there's an ancillary job coming out of this,
like a career in rural appraisal, which might be interesting
for people to look at those who want to stay
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Speaker 1 (07:20):
Back now with some more news for the family farmers
on the American Family Farmer Program. I'm Doug Stephen with
something that is a part of the overall management I
think of farms and our health because trying to get
good food is part of what the folks in the
(07:41):
Health and Human Services Department, under the leadership mister Kennedy,
have come around. What does it make America healthy again?
Speaker 2 (07:48):
There is a.
Speaker 1 (07:49):
Draft of this highly anticipated blueprint on health policy. It
takes a softer approach to regulating companies than many had feared,
so it's not quite it's a relief for the industry
and kind of a setback for the environmental activists. I
(08:09):
think one of the things that's an example of this
is bringing back whole milk in schools. This is something
that no one that I know of ever could figure
out how it was and who it was that said, Okay,
we don't want to give the kids real milk, will
give them white water. So that has changed under Kennedy.
(08:31):
Next item is an update on the screwworm. Brooke rawlins
the Secretary, announcing yet another move. They are planning to
build a sterile fly production facility at More Air Force
Base in Edinburgh, Texas. When it's complete, it will enable
them to increase domestic sterile fly production by up to
(08:54):
three hundred million flies a week to combat.
Speaker 2 (08:57):
The spread of this new world screw work.
Speaker 1 (09:01):
It'll complement a sterile insect dispersal facility set up to
be completed at the same location later on this year.
So the government is spending seven hundred and fifty million
dollars on this project to triple the current output and
eliminate the soul reliance on Panama and Mexico for a
(09:21):
sterile fly supply. It's a tactical move that Miss Rolins said,
insure as we're prepared and not just reactive. This thing
is so damn dangerous. It's a horrible, horrible, horrible thing.
And Texas is what they're concerned about. First Governor Greg
Abbott of Texas commissioned a new state level response team
(09:44):
to address the screw worm as it may affect Texas
dire economic consequences for the state and for the country
in terms of agriculture and our health and well being.
Speaker 2 (09:56):
This is one of the most horrible things.
Speaker 1 (09:59):
And the threat came about ten years ago and they
did the same sort of thing, and it seems to
have contained it. But Rawlins and the first I think
reported on this first back in mid June. We talked
about it, and so the exact timeline for the construction
hasn't been announced, but she said Miss Rolins said fast
(10:22):
tracking is being done in every possible way. So anyway,
this is a screwworm. If you haven't seen a picture
of it, it's the grossest thing. It eats your flesh,
the flesh of your animals, cows, goats, pigs, whatever it is.
Laid larvae from the flies that have this lay into
(10:45):
an open wound, and we kill you.
Speaker 2 (10:50):
It'll kill them.
Speaker 1 (10:50):
It'll just it's one of the worst things. You wonder
how these things develop.
Speaker 2 (10:56):
It really is amazing sometimes.
Speaker 1 (10:59):
So that's why we've banned livestock imports from Mexico. This
is that third time that's happened in eight months. It's
good news for the folks who were raising beef in America.
Speaker 2 (11:10):
Although the other side of that is the essence of
the cost to the consumer because we don't have enough beef.
Look at it.
Speaker 1 (11:21):
I saw something in one of the trades this past
week that a replacement heffer on the dairy farm now
going for about four thousand dollars, isn't that amazing? And
it's all brought about by the amount of beef that
we don't have in our system. And one of the
things that we're worried about is we try to build
up the stock. Is the screwworm, so be careful about
(11:43):
that on your farm.
Speaker 2 (11:45):
All right.
Speaker 1 (11:46):
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Back on the American Family Farmer. The Big Beautiful Bill
is affecting a lot of things on farms. Most of
them seems to be better off under the rules and REGs,
(13:02):
including the death tax. But one of the things that
also is entering into why farming is different is because
the operations are owned and operated by bigger companies, sometimes
multiple extended family members, and that changes the context. Isn't
(13:22):
just father and mother and the kids. A lot of
sibling owned farms are maturing into what's become cousin owned farms.
A cousin owned farm as a sort of unique set
of challenges when it comes to running the farm and
working through a lot of the business problems. And this
is something that I think in how many years have
(13:45):
I been on the file, I've been in the farm
seventy years, so I've seen it change a lot before that,
or early on when I was a youngster, parents with
a lot of sons who wanted the farm to continue.
Speaker 2 (14:00):
They helped each other.
Speaker 1 (14:01):
And they purchased the farm, and then oftentimes they went
off on their own.
Speaker 2 (14:05):
That's what I remember.
Speaker 1 (14:07):
They went off on their own and started a farm
and helped the mom and dad, but they also had
their own operation. And so these cousin owned farms, they
often don't have the same number of shared experiences as
those who are brother and sister growing up on the farm,
and a cousin owned farm is often less feeling of
(14:29):
a need to take care of one another in the family.
Sometimes on sibling owned farms, the siblings don't lose the
sibling rivalries that developed while they were growing up together,
and a cousin owned farm cousins are unencumbered by these rivalries.
And then there's off farm workers who come, and then
(14:50):
there are the family members who have to work off
the farm. It's kind of like a vicious circle, isn't
it When we think about how many of the farms
have not Most of the farms require where the owners,
the parents, and some of the workers on the farm
to have jobs to sustain the farm and the off
farm children involved in farms have decreased over the years,
(15:15):
and that's why again the siblings have disappeared and the
cousins have come in. Is that good for diversity, I
don't know. It depends on how you define diversity and
what you think of it. The organization, the organized structure,
if you will, of the operation with a cousin owned
farm is probably different than if the farm were owned
(15:37):
by brothers and sisters.
Speaker 2 (15:39):
It gets complicated the.
Speaker 1 (15:41):
Manager who's in charge, who's got the authority, and that
oftentimes affects the rate of return, the increase.
Speaker 2 (15:49):
Of net worth for the owners.
Speaker 1 (15:52):
And so I find that for me anyway, I'm working
on a succession plan from farm to go to my
two children, and my son's working along with me quite
feverishly as a matter of fact, to make the farm
a sort of as a transitions a modern day farm
(16:13):
with all kinds of things that apply to the specific
area where I am in Massachusetts. We don't have to
worry about cousins because the cousins, well, actually there is
a cousin, a cousin of my children's who's interested in
the farmer husband as a farm in New York. Maybe
they will participate. It's probably not something that I should
(16:33):
be concerned about or worry about.
Speaker 2 (16:34):
But what keeps you awake at night, I guess, is
the question, right when you think about all the way
have you? Did you ever?
Speaker 1 (16:42):
Even I was thinking about some of the I worked
on three farms as a kid growing up here in
the town where I am, and I never thought, and
I never heard anybody really talk about the succession plan
because one of the farms didn't really belong to the
family that was working at it, and they all figured,
and they all did, they all left and went back
to Maine, and the farm is now the farm that
(17:05):
I'm making into an agrood. The other farms were protected.
The people who bought the farms from my second family
managed to protect it right off the value of the
land and protected so it can't be built on.
Speaker 2 (17:22):
So that's one of the farms.
Speaker 1 (17:24):
And then there's the farm that I own now that
I'm trying to protect, and I'm not sure where we're
going to be with that in a year.
Speaker 2 (17:30):
We'll have to I'll keep you informed.
Speaker 1 (17:32):
It's part of the story that makes what I'm doing
relevant to telling things that are going on on the
American Family Farm. I'm Doug Stephen here on the American
Family Farmer.
Speaker 3 (17:44):
This program was produced at bob k Sound and Recording.
Speaker 1 (17:47):
Please visit bobksound dot com. The American Family Farmer podcast
sponsored in part by Caldron, which is the safe way
for you to lose weight and keep it off