Weather, tax laws force farmers to adapt
February 12, 2013
Alan Brugler of Brugler Marketing and Management in Omaha, Neb., explains trends in the market and the future outlook for the crop and cattle markets during a seminar at the Lincoln Club Monday afternoon. Daily Times Herald photo by Paige Godden
GLIDDEN - The drought that afflicted Iowa's corn and soybean crops in 2012 will likely continue this year but to a lesser degree, Iowa State University climatologist Elwynn Taylor told a group of local farmers on Monday.
Last year was one of the three lowest for precipitation since 1950, he said, and "they don't completely bounce back the next year" to typical crop yields.
Rain and snow this winter has pulled much of the state out of severe drought, the middle point of five classifications the U.S. Drought Monitor uses to measure drought severity across the country. Most of far eastern and southern Iowa suffers from moderate drought right now, but parts of Carroll County are still classified as severe and extreme.
Taylor warned that weather patterns have swung more wildly in recent years and will continue to do so for the next 25. He spoke to a group of about 60 local farmers at the Lincoln Club in Glidden on Monday, as part of a three-person panel that discussed the state's climate, the outlook for crop and cattle markets and tax law.
Taylor joined the discussion by telephone because he is recovering from a broken leg. Alan Brugler, of Brugler Marketing and Management of Omaha, Neb., and Michel Nelson, of Iowa Savings Bank in Carroll, also spoke.
Brugler spoke about price and risk-management strategies for 2013 and said the grain markets will depend heavily on South America, which is a major ethanol producer.
If South American countries boost their ethanol exports, it would drive down the value of Iowa-made ethanol, Brugler said. But he said Brazil has upped the amount of ethanol in its gasoline blends from 10 to 25 percent, which means it might export less.
Nelson warned that farmers will need to make new plans for passing their land and other assets to younger generations in light of a new 40-percent federal estate tax. A tax credit is available to offset that potential loss, but farm families must file for it within nine months of the death of a farm owner.
He also suggested that farmers update their current will or revocable trusts due to changes in law that eliminate the need to split assets among farm owners.
Iowa Savings Bank organized Monday's farm talk.
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