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    Recent Stories

    Hay Price Outlook

    The current outlook for horse hay supplies and prices in 2014 is more optimistic than last years due to: increasing hay acres in production and good spring rains in many areas, which should boost production.  As always, local growing conditions will have a big impact on what you will have to pay for hay.  It is always best to estimate your total annual hay needs early and contract to fill your needs during the production season.

    Expert Advice

    John CohanJohn Cohan

    Attorney at Law 

    Admin
    Monday
    Feb242014

    Knowing when to issue IRS Form 1099 can prevent problems at tax time

    By John Alan Cohan, Attorney at Law 

    The IRS Office of Chief Counsel recently issued a memorandum concerning the use of IRS Form 1099 (also known as “information returns”).  This form is important to taxpayers especially if you are audited in connection with horse activities, ranching or farming.

    Farmers, ranchers, owners and breeders regularly pay for services performed by vendors, veterinarians, and other nonemployees or independent contractors.  These payments typically include wages.  When payments are made, you are responsible for issuing a 1099 form to the extent the sum of the payments made to the payee amounts to $600 or more in the year.  These forms are required to be sent to each payee by January 31 for the previous calendar year.  The forms are designed to help the IRS keep track of income paid to self-employed workers and contractors.  You must also send the forms to the IRS by February 28 of each year.

    According to Terry Miller, CPA with Miller & Miller Associates of Fresno, California, IRS auditors will invariably fault taxpayers who fail to file 1099 forms.   Failure to prepare and file these forms, he says, could work against you in an audit because it may suggest you are not keeping accurate and businesslike records. 

    The 1099 forms pertain only to payments made for business or trade purposes.  So, for example, payments for veterinary services for horses used in the activity are subject to reporting on the form, but veterinary services to pet dogs or cats are not.  A 1099 form is required for payments to land owners for rent and/or services.  Payments to attorneys, accountants, mechanics, and laborers also require issuance of the 1099 form if the services pertain to the farming, ranching or horse activity in question.

    The recent IRS memo referred to above indicates that 1099 forms are required whether the veterinary service is rendered by a sole proprietor or an incorporated entity that provides veterinary services. 

    Some nonemployee income payments do not require issuance of the 1099 form.  Generally, payments to corporations – except for veterinary or legal services – do not require a 1099.  Payments for hauling livestock or grain do not require issuance of a 1099.  Other farm or ranch-related costs, such as for feed, fertilizer, chemicals, fuel or other non-service items, do not require a 1099 form.

    There seems to be an enhanced level of scrutiny in the IRS of taxpayers with a significant history of losses and deductions against other sources of income.  Thus, it is more important than ever to keep appropriate records to monitor the progress of your business, to show whether it is improving, which items are selling, or what changes you need to make.  Good records can help you make better decisions as well as help support your position in the event of an IRS examination.

    [John Alan Cohan is a lawyer who has served the horse, farming and ranching industries since l98l.  He can be reached at: (3l0) 278-0203, by e-mail at johnalancohan@aol.com, or you can see more at his website: www.johnalancohan.com.]

     

    Monday
    Jan272014

    Boarding stable owners produce fresh forage indoors all year long for 55 horses

    Brandi Widmer and Crimson Pulver produce about 1,150 lbs. of forage a day to feed horses in their  Wisconsin stable operation in just a little more than 220 square feet of space.

    Widmer and Pulver struggled to find enough affordable hay to feed the 55 horses under their care.  With only 14 acres, growing their own hay wasn’t an option.  They say they have found an answer to the problem.  They are growing grass (fodder) hydroponically in a greenhouse-like setting to replace some of the dry hay and supplement in their rations.  The FodderPro 2.0 system they purchased and installed is from FarmTek, located in Dyersville, IA.  It is actually three units running in combination.  FarmTek has since developed a single “commercial” system with the same capacity.

    Widmer says they have been operating their Fodder-Pro units for almost a year and are pleased with the results.  “Properly cleaning the system is the key.  It takes us about two hours a day to harvest, clean and reseed our three units.”

    Their operation, Country View Equestrian Center, Monroe, WI, provides boarding, training and lessons has been in business for 10 years. The facility consists of a 43-stall barn and indoor and outdoor riding arenas.  The horses they care for represent a variety of breeds and are ridden in many different disciplines. Widmer explains, “We had been going through three 900 lb. bales a day.  Now, we only feed about 1% of each horse’s body weight a day. We estimate the savings to be about $300 per day from hay cost alone.”  Feeding of grain has been almost eliminated, according to Widmer.

    The growing process consists of grass or grain seed planted in trays in a seven-day cycle from seeding to harvest.  Every day, seed is planted and soaked in trays and forage is harvested from trays planted seven days prior.  It grows in water, nothing else. No fertilizer or other nutrients are added.   Forage is usually fed the day it is harvested.  It can be refrigerated if necessary and fed later preferably within 48 hours.

    Harvesting consists of rolling up the growing grass like a roll of sod (except there is no dirt).   Rolls, often called “biscuits,” are fed in a variety of ways including just unrolling the product green grass-side up in feeders.  For in-stall feeding, the biscuits are ripped or cut into sections that will fit in feeders.

    Barley, oats, rye and wheat are commonly used as seed stock, although other seeds can be used as well.  Laboratory analyses performed by respect forage testing laboratories show good nutritional values comparable with horse-quality hay.  These analyses were done by Dairyland Labs., Arcadia, WI and Cumberland Valley Analytical Services, Maugansville, MD.

    Forage  type

    Crude protein %

    Dry matter %

    NDF Neutral detergent fiber %

    Wheat

    23.5

    8.4

    42.3

    Barley

    20.8

    11.8

    46.9

    Rye

    17.93

    9.04

    29.13

     

    The only inputs to the production system are seed, water, light and cooling or heating depending on climate.  Ambient temperature should be between 60 and 75 degrees Fahrenheit with a relative humidity in the 40-to 80% Water temperature also should be in the 60 to 75 degree range.  In climates like Florida cooling will need to be provided when needed.  In colder Northern states, heating will be needed.  Water needs to be between 6.2 and 6.4 Ph.  The biscuits have 86 to 92-percent moisture content.  As a result, heat is sometimes provided in colder climates. 

    A typical system will use 90 gallons of water per day, which is roughly equivalent to two showers.  Water cannot be reused but can be used for general cleanup purposes around the stable.

    Ordinary light is need for 6 to 18 hours per day.  Florescent tubes are typically used, but the light that comes through a typical fabric-covered building is enough.  Widmer and Pulver estimate they are spending about $140 per ton to grow the fodder.

    Many other stable owners are using the Fodder Pro technology.  Samuel Hershberger, a member of the Amish community, raises standard bred horses near Holton, MI.  He installed a FarmTek Fodder-Pro 2.0 system to replace some of the grain in his horse’s diet and replace it with green material. He sprouts oats and says his horses like the feed and are doing well on it.

    To get more information on FodderPro systems, visit www.FarmTek.com and click on “FodderPro Systems” or call 1-800-327-6835.

    Monday
    Jan202014

    Stable owner makes it easier to find horse hay for sale

    Horse stable operators in East Central Minnesota and Western Wisconsin have a new Facebook-based place to find horse hay for sale.  “Twin Cities Hay Exchange,” launched by John Strohfus of Hastings, MN, offers horse stable owners a choice several types of horse quality hay.

    It started like this: Strohfus began listing hay he had for sale on Facebook and encouraged other hay growers to do the same.  Gradually, people started contacting him via Facebook and buying hay. This gave him the idea to launch Twin Cities Hay Exchange on Facebook. To date, about 800 horse stable owners and hay growers have registered on the Twin Cities Hay Exchange.

    “A lot of people, myself included, were driving 150 miles or more to find hay, and not really very good hay either, and paying more than $300/ton for it. His Twin Cities Hay Exchange is designed to help stable owners find the hay they want closer to home.

    The hay is offered by growers in the Minnesota and Western Wisconsin and elsewhere.  Strohfus, who also runs a 60-plus horse boarding stable, grows about 50 acres of alfalfa-orchard grass hay on his farm near Hastings, MN. Most of his hay is fed in his stable but some is sold.  He also brokers in additional hay, some of which eventually is sold through the Twin Cities Hay Exchange.

    Now, Strohfus has another idea.  He is launching what is essentially a “hay depot” on his Hastings farm. It is designed for those who can’t afford or don’t need to buy hay by the semi-load.  Often, hay sellers are reluctant to split-deliver a semi load of hay between two or more buyers. “If they have to make several stops to deliver a complete load, it becomes a pain for the seller to coordinate things with the trucking company.”  In these cases, Strohfus acts as a “Hay Depot,” buying and taking delivery of remaining hay from partial loads.  He then sells this hay through Twin Cities Hay Exchange or other means.

    For more information, go to Facebook and search for Twin Cities Hay Exchange. Or, email to sales@strohfusstockfarm.com.  He can be reached by phone at 612-384-1892.

    Sunday
    Jan052014

    Is city water okay for horses?

    Water is an important part of good horse nutrition and since horse shows and other equine events often take place in municipalities where water is fluoridated, some horse and stable owners wonder if fluoridated water is a problem for horses.

    According Roy Johnson, Animal Nutritionist for Cargill says there is little reason for concern. Horses are less susceptible to fluoride toxicity than cattle or sheep.  The maximum dietary allowance for fluoride in water for horses is 4 to 8 mg/liter of water.  Fluoride levels in water are generally well below the maximum level horses can tolerate.  Typically, fluoride levels in treated water range from .5 to 1 mg/liter of water. Chances of over fluoridation of water are unlikely since cities water monitor closely.

    Even though horses typically drink about 10 gallons of water a day, fluoride intake is well within acceptable levels, according to Johnson. 

    Thursday
    Dec192013

    Federal Appeals Court clears the way to resume horse slaughter

    The 10th U.S. Circuit Court of Appeals in Denver cleared the way Friday for a return to domestic horse slaughter by granting a southeastern New Mexico company's application to convert its cattle facility into a horse processing plant.

    In approving Valley Meat Co.'s plans to produce horse meat, Department of Agriculture officials also indicated they would grant similar permits to companies in Iowa and Missouri as early as next week.

    With the action, the Roswell, N.M., company becomes the first operation in the nation licensed to process horses into meat since Congress effectively banned the practice seven years ago.

    But actual horse slaughter is not likely to begin anytime soon because the USDA must send an inspector to oversee operations and two animal rights groups have threatened lawsuits to block the opening.