Third Annual Mid-South Agricultural and Environmental Law Conference, April 21-22

Posted February 18, 2016

Agriculture in the Mid-South is uniquely impacted by changes and developments in state, federal, and international laws and policies. Hosted by the Agricultural & Food Law Consortium, the Third Annual Mid-South Agricultural and Environmental Law Conference, April 21-22 in Memphis, TN, is part of a long-term effort to provide relevant and timely agricultural and environmental legal research and information to attorneys, lenders, accountants, tax consultants, students and other agricultural professionals involved in the agriculture and aquaculture industries in the southern U.S.   

Conference highlights and panel discussions include:

- Agricultural & Environmental Law Updates

- Managing Risk in a Faltering Ag Economy

- Handling an Ag Bankruptcy

- Navigating Wetlands Issues

- Legal Issues & Liability in Agricultural Nutrient Management

This year's program is approved for six hours of CLE credit in Alabama, Mississippi, and Tennessee, including one hour of ethics. Further, it has been submitted for CLE credit in Arkansas and for real estate continuing education in Arkansas.

The conference kicks off Thursday, April 21, with a “BBQ & Beer” reception at Memphis' famous Rendezvous barbecue restaurant. 

To register for the conference, please click here. 

Agribusiness conference at Arkansas State University February 10

Posted January 21, 2016

Arkansas State University’s 22nd annual Agribusiness Conference will be held Wednesday, February  10. 

The conference provides information and education outreach to farmers, agribusiness professionals and educators across the Mid-South. This year’s conference focuses on the agricultural economy, environmental law and regulation, business transition planning, trade policy and the commodity market outlook. On-site registration begins at 7:45 a.m. in the Fowler Center at Arkansas State. Lunch will be served in the Convocation Center at noon. Afternoon sessions will follow and the conference concludes at 4 p.m.

The morning general session features five speakers and a panel discussion:

- Stan Miller, an attorney and partner with ILP+McChain, Miller and Nissman, will discuss succession and estate-planning issues for agribusiness owners.

- Harrison Pittman, director of the National Agricultural Law Center, will describe how the regulation of crop agriculture is evolving and discuss other environmental law issues.

- Bob Cummings, COO of the USA Rice Federation, will give an update on agricultural and trade policy and how it is impacting the rice industry.

- David Schweikhardt from Michigan State University will explain the economics and politics of the Trans-Pacific Partnership and how it will impact U.S. agriculture.

- Jason Henderson, director of Extension at Purdue University, will review the agricultural finance situation and the outlook for the farm economy.

Luncheon speaker John Phipps is a farmer and commentator on the U.S. Farm Report, America's longest-running farm television program.

Afternoon special-interest sessions include an update on Arkansas Department of Agriculture programs by the state’s Agriculture Secretary Wes Ward, three speakers on commodity market trends, and three presentations on poultry and beef industry issues.

Admission to the conference and luncheon is free, but pre-registration is encouraged. Detailed conference information and online registration is available here.

Missouri sues USDA over crop insurance deadlines

Posted July 22, 2015

 
Missouri filed a lawsuit pushing the federal government to extend a key agricultural deadline, which is necessary to keep many of the state's farmers eligible for crop insurance, according to a News Leader article available here. Insurance Journal also published an article available here and KSPR here.

Attorney General Chris Koster filed the federal lawsuit against Tom Vilsack, U.S. Secretary of Agriculture.

"Missouri farmers rely on the availability of insurance to guard their crops against events beyond their control," Koster said a press release. "The USDA should not punish farmers whose planting was delayed by unexpected rain and flooding by enforcing an arbitrary deadline. Millions of dollars in Missouri agriculture is at risk, and we will fight to make sure these resources are protected."

Sixty percent of Missouri farmers could be ineligible for crop insurance this year, because heavy rainfalls and floods will prevent them from meeting the reporting deadline.

The USDA requires farmers to report their planted acreage each year by a fixed deadline, which is July 15 for farmers in northwest Missouri. Rainfall over the past two months caused severe flooding so severe that the Governor declared a state of emergency. Many farmers were unable to plant their crops in time to get accurate acreage reports filed, even with the five-day grace period normally allowed by the USDA, according to KSPR.

His lawsuit asks a federal court to require that the agriculture agency give farmers 15 additional days to file reports, according to Insurance Journal.

The federal agriculture department says by law it cannot extend the deadline, but said it will work with farmers to help them maintain coverage.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

Bigger Subsidies Projected Under Farm Bill Program

Posted March 10, 2015

The new farm programs for grain and oilseed farmers will pay them up to $7 billion annually over the next few years, according to an Agri-Pulse available here. Politico also published an article available here.

The Congressional Budget Office and the University of Missouri's Food and Agriculture Policy Research Institute (FAPRI) that provides analysis to the congressional agriculture committees prepared the forecasts.

Corn growers will receive the lion's share of payments, due to the sharp decline in market prices over the past two years.

CBO projects that total payments to corn and soybean producers from Agricultural Risk Coverage alone will be $3.37 billion in fiscal 2017, according to Politico.

With corn and soybeans enjoying record prices while the rest of the country struggled under the Great Recession, the House and Senate Agriculture Committees developed two substitute programs more sensitive to real needs and market changes.

ARC had an early-in, early-out approach, intended to buy time for a farmer to adjust to markets falling. The second program, Price Loss Coverage or PLC, followed the more traditional target price approach, slower to trigger but then defining a more permanent floor for producers.

Farmers have until the end of this month to sign up for one of the programs, according to Agri-Pulse.

Sixty percent of wheat growers nationwide are expected to choose PLC, while most soybean growers will choose ARC.

After 2018, ARC payments will decline dramatically as the five-year moving average begins to reflect the drop in commodity prices. FAPRI economists estimate that ARC payments will drop from $3.1 billion in fiscal 2018 to $1.8 billion in 2019 and then to $1.2 billion the following year.

For more information on commodity programs, please visit the National Agricultural Law Center’s website here.

Leasing, Conditional Sales Agreements, and the Future of Section 179

Posted February 10, 2015

The Ohio State University’s Agricultural Law & Taxation blog published an article on Leasing, Conditional Sales Agreements, and the Future of Section 179.

The Internal Revenue Code (Code) allows an annual deduction of a portion of the cost of the property. This deduction may be a deduction for depreciation, amortization or depletion. There are two exceptions to the aforementioned rule. The first exception is the section 179 expense deduction and the other exception is the Accelerated First Year Depreciation (AFYD).

For lease payments to be deductible as a business expense, the lease agreement must be a Tax-Oriented True Lease. If there are any factors present that show that the payments are intended to be creating equity in the equipment, the agreement will be deemed to be a conditional sales agreement. The payments pursuant to a conditional sales agreement are not deductible business expenses and the equipment is not depreciable unless the purchaser is considered the owner.

The importance of this issue depends on when Congress addresses the section 179 expense deduction and AFYD. If Congress’ inaction in 2013 and 2014 is any indication, farmers may very well find themselves in the same position of not knowing whether or not to make capital expenditures in 2015. The best possible scenario would be for Congress to permanently establish section 179 at $500,000 and AFYD at 50% to provide farmers with the certainty that they need to make wise business decisions. However, this is unlikely to happen. If a lease is a viable alternative for the farmer, make sure that it is a Tax-Oriented True Lease.

For more information on Leasing, Conditional Sales Agreements, and the Future of Section 179, please visit OSU’s Ag Law and Taxation Blog here.

Two Indicted in Organic Tomato Farm Case, Multiple Fraud Charges

Posted December 17, 2014

The Alabama Securities Commission has indicted James Albert Lawhorne and Jacqueline Wilson in multiple counts of stock fraud, according to an article by Alabama Media Group available here. WAFF also published an article available here.

Lawhorne was arrested in Tennessee, and his bond has been set at $600,000.

Wilson turned herself in to authorities, and she was released after posting an $80,000 bond.

James Lawhorne faces 24 charges, including theft by deception, misrepresentation of sale, and sale of unregistered securities, according to WAFF.

The pair attempted to attract investors to the business, Cypress Creek Organic Farms, with a claim that the farm would provide all testing, materials, supplies, equipment, training, and support for growing organic tomatoes. Additionally, Lawhorne would provide “USDA organic certification and a guaranteed buyback of the produce," according to Alabama Media Group.

Lawhorne and Wilson previously defend their Better Business Bureau F-rating in an interview available on WAFF’s site here.

The pair is also tied to another business in North Carolina known as Wormz Organic.

For more information on agricultural finance and credit, please visit the National Agricultural Law Center’s website here.

FCA Proposing to Amend Regulations

Posted July 28, 2014

The Farm Credit Administration (FCA) is proposing to amend the regulations governing the eligibility of investments held by Farm Credit banks.

These regulations would be improved by reinforcing that only high quality investments may be purchased and held, and the regulations will comply with section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The FCA also proposes to revise the regulatory approach to Farm Credit System association investments to limit the type and amount of investments that an association may hold.

Comments are accepted until October 23, 2014.

The Federal Register is available here.

CoBank Partners with USDA to Create Infrastructure Investment Fund

Posted July 25, 2014

CoBank announced that it has joined with the U.S. Department of Agriculture (USDA) to create a new public-private partnership focused on infrastructure investment in rural America, according to a press release. The New York Times also publishes an article available here, Agri-Pulse here, and Farm Futures here.

The new “U.S. Rural Infrastructure Opportunity Fund” will serve as a private-sector capital source to partner with USDA on various infrastructure projects in rural communities. CoBank will serve as anchor investor and has committed $10 billion of balance sheet capacity to co-lend with the fund.

“We’re the eHarmony.com of infrastructure and business investment,” the agriculture secretary, Tom Vilsack, said, referencing the online dating service. “We’re going to be a connector,” he added. “This is a new role for the [USDA],” according to The New York Times.

The funds will distribute loans to improve infrastructure in rural communities such as wastewater treatment, roads and bridges, rural broadband and conservation projects. Capitol Peak Asset Management Company is also managing the fund, and loans will be distributed and repaid with the intent of creating an ongoing fund for rural infrastructure improvements, according to Agri-Pulse.

The loans will be offered with market conditions and will be implemented in the similar ways that USDA and CoBank already independently operate, but Vilsack and CoBank CEO Robert Engel both said the partnership will allow the companies to “break down the silos” that previously stood in the way of collaboration.

The goal is "building a network that reaches and expands our reach and resources more effectively," said Engel. The need and profit opportunity are out there, but investors have to be aware of it, he added, according to Farm Futures.

“The continued success of the U.S. rural economy and the improvement of rural communities depend on the strength of our infrastructure,” Engel said. “To remain competitive, we must develop innovative financing strategies that will ensure infrastructure investment keeps pace with the needs of agriculture and other key rural industries. We strongly believe this public-private partnership will facilitate the flow of capital to deserving projects and promote the health of rural America,” according to
The New York Times.

For more information on agricultural finance and credit, please visit the National Agricultural Law Center here.
  
 

FCA Reducing Regulatory Burdens for FCS

Posted July 22, 2014

Several System institutions responded to the Farm Credit Administration's (FCA) July 2013 request for comments on the initiative to reduce regulatory burden for Farm Credit System (FCS) institutions by identifying regulations that they considered burdensome, ineffective, or duplicative, and the FCA has responded to those comments.

The effective date is July 21, 2014.

The Federal Register is available here.

For more information on agricultural finance and credit, please visit the National Agricultural Law Center here.

AFPC Released Farm Bill Decision-Aid Tool

Posted July 3, 2014

The Agricultural and Food Policy Center (AFPC) at Texas A&M University released a preliminary version of a 2014 Farm Bill decision-aid tool for farmers, according to Texas Corn Producers (TCP) press release available here. Agri-Pulse also published an article available here. A previous blog post on the tool is available here.

The AFPC developed the tool with financial assistance from Texas Corn Producers, U.S. Department of Agriculture (USDA), and others.

Stephanie Pruitt, TCP communications director, said some farmers are excited about the product, according to Agri-Pulse.

“It's really giving farmers the opportunity to see how farm programs will impact their operations,” Pruitt said. “It gives them a chance to weigh their options.”

TCP urges farmers to remember that this is only a preliminary version, and it has not been finalized to incorporate the final rules, which have not yet been released by USDA Farm Service Agency, according to TCP statement.

TCP encourages farmers to watch two instructional videos prior to using the tool. The videos can be found on the AFPC website here.

The decision-aid tool is available on the AFPC website here.

For more information on farm bills, please visit the National Agricultural Law Center’s website here.

Tyson Bids to Acquire Hillshire Farms

Posted May 29, 2014

Tyson Foods, Inc. has announced its proposal to acquire The Hillshire Brands Company for $50 per share in cash, according to a news release by Tyson available here. The New York Times also published an article available here, Fortune here, and Bloomberg here.

This proposal would provide Hillshire shareholders with an immediate and significant return on their investment. Tyson’s proposal represents a 35% premium to the unaffected closing price per share of the Company’s common stock on May 9, 2014, a day prior to Hillshire’s announcement to acquire Pinnacle Foods Inc. The Tyson proposal represents a multiple of 13.4x Hillshire’s trailing LTM adjusted EBITDA at a total value of $6.8 billion.

Tyson’s bid also exceeded a previous offer by Pilgrim’s Pride Corp., according to Fortune.

If an offer is successful, by Tyson Foods or Pilgrim’s Pride, it would result in the termination of Hillshire’s $6.6 billion deal, which includes debt to acquire Pinnacle Foods.

“Tyson’s shareholders will benefit from the considerable new opportunities that come with this extraordinary strategic fit. We stand ready to work together with Hillshire’s leadership to quickly reach an acceptable definitive merger agreement, and look forward to being able to welcome Hillshire’s communities, employees and business partners to the Tyson family,” said Donnie Smith, Tyson Foods President and Chief Executive Officer, in a news release.

“Our interest is in the company on its own, and not as combined with Pinnacle,” Smith wrote in a letter to Hillshire’s chief executive, Sean Connolly. “Accordingly, the termination of the Pinnacle merger agreement would be a condition to our proposed transaction.”

Pilgrim’s Pride is reviewing its options, following today’s bid from Tyson, according to Bloomberg.

Tyson, one of the largest producers of chicken, pork, and beef, has more than $34 billion in annual revenue and a market capitalization of more than $14 billion, according to NY Times.

Hillshire shares were up 16 percent at $52.18, Tyson shares were up 6.8 percent at $43.52, and Pilgrim’s Pride fell 1.1 percent to $25.10, according to midmorning trading on Thursday.

Tyson said there was no financing condition to the offer, and that they secured a bridge loan to pay for the all-cash deal.

For more information on agricultural finance and credit, please visit the National Agricultural Law Center’s website here.