Values Available for End-of-Year Tax Considerations

Jan 12, 2023

By Alejandro Plastina and Ann Johanns et.al

Crop and livestock farmers who are working on preparing their 2022 income tax returns can review two useful documents for end-of-year determinations.

The article “Suggested Closing Inventory Prices for 2022 Records” provides suggested closing inventory prices for all major crop and livestock commodities produced in Iowa, and “Deductible Livestock Costs for Adjusting 2022 Income Tax Returns” provides cost estimates for farmers who consume food produced by their operation, which must be deducted from expense reporting.

Both documents are published by Iowa State University Extension and Outreach and are part of the December Ag Decision Maker.

“The closing inventory prices found in the ‘Suggested Closing Inventory Prices for 2022 Records’ document are used by farmers and farm business consultants to assign a consistent value to ending inventories of crops and livestock each year,” said Alejandro Plastina, associate professor in economics and extension economist at Iowa State.

The inventory prices are averages compiled by economists with ISU Extension and Outreach, using data from the United States Department of Agriculture, the Iowa State Cash Rental Rates Survey, and the Iowa Farm Business Association. The prices are used by consultants with the Farm Business Association and tax preparers across Iowa.

In addition to tax preparation, the prices can help farmers who simply want to track their inventory, or who are required to track and report inventory for lending or other business purposes.

“A net worth statement or balance sheet should be developed on or around Jan. 1, to measure the financial progress of the farm from year to year,” said Plastina. “This helps farmers make comparisons and estimate the net income for each year.

Home consumption

As Plastina explains, when farmers consume livestock or products that they have produced themselves, they are not allowed to include the costs of raising those livestock or products in their deductible expenses. Likewise, these products are also not taxed as income, because they are being consumed at home.

“Since most farmers would not be able to estimate their own costs for one unit of livestock or product, the document provides an estimated average cost, for common products produced and consumed at home,” said Plastina. “This report is particularly relevant to farm income tax preparers who attend the Farm income Tax Schools.”

Both reports use averages, based on credible data. Actual results per farm should be based on local markets, conditions of the crops and livestock marketed, and other pertinent factors. Farmers should consult with their accountant or tax professional on final determinations for their farm.

Source : iastate.edu

Video: Why Seed Analysts are Thriving Under Seeds Canada

Last month in Edmonton, Alta., industry leaders and stakeholders gathered to discuss the evolving landscape of the seed industry at Seeds Canada’s annual conference. Among them was Sarah Foster, president of 2020 Seed Labs and the new vice-president of Seeds Canada.

Foster, who has been on the board of Seeds Canada for over a year, has witnessed firsthand the challenges and opportunities that come with the formation of the organization. Seeds Canada was established just over three years ago through the merger of multiple seed industry groups, including the Commercial Seed Analysts Association of Canada (CSAAC). Since then, the organization has been working to define its priorities and solidify its role in the industry.

“The challenge has been allowing the dust to settle after the merger,” Foster explained. “We’ve been focused on identifying what our priorities should be and ensuring that our members, especially the seed analysts, are getting what they need to continue their professional work.”

One of the recent highlights was a pre-conference event where the three major seed labs in Alberta — 20/20 Seed Labs, SGS Canada and Seed Check — opened their doors to members. The event saw a record number of seed analysts and business professionals in attendance. Foster emphasized the importance of this transparency, stating, “It’s crucial for people to see what goes on behind the scenes. We’re an open book now, and that openness helps build trust and understanding within the industry.”

The event also featured an environmental scan and a series of discussions that fostered strong communication among attendees. According to Foster, the dialogue was both encouraging and inspiring.

“A lot of people were really inspired by the fact that Seeds Canada is moving ahead with its agenda. The seed analysts, who have always worked diligently in the background, are now being recognized more prominently,” she said.

Before the merger, seed analysts were represented by CSAAC. Now, as part of Seeds Canada, they are finding their place within the larger organization. Foster believes that the integration has been successful, noting, “I think we’re thriving. You only need to look south of the border, where similar consolidations are happening.”

As Seeds Canada continues to evolve, Foster remains optimistic about the future. “I want to be totally transparent with anyone who is a seed analyst — I’ve got your back. We’re moving in a positive direction, and we’ll do everything we can to meet the needs of our members,” she said.