At the 105th Annual Meeting of Sun-Maid, American Vineyard Publisher Dan Malcolm presented retiring Sun-Maid President Barry Kriebel with American Vineyard’s Outstanding Service Award, after 30+ years of dedicated service to Sun-Maid and the raisin industry. Watch his brief interview, and read more about Mr. Kriebel in the December Issue of American Vineyard Magazine.
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The December issue of California Dairy Magazine is now available to read online! Read the latest California Dairy & Feed industry news and technology. Here’s a peek of what’s inside:
Q&A with a Winery Tax Expert
The IRS has announced that individuals and businesses affected by the fires in California now have until January 31, 
2018 to file certain tax returns and make certain payments. There are currently seven counties eligible for relief: Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba. This list may continue to grow if the disaster continues to spread. Individuals, businesses, as well as visiting firefighters and relief workers, qualify for the extension.
Individual and business tax filings and payment deadlines that occurred starting on October 8, 2017 have been extended, giving those affected until January 31, 2018 to file returns and pay any taxes originally due during this period. The affected deadlines include:
for quarterly payroll and excise tax returnsThese two types of losses overlap. Every disaster loss is also a casualty loss, but not every casualty loss is a disaster loss.
Disaster Area Losses: a loss that occurred in an area declared by the President to be eligible for federal assistance— usually during a major disaster or emergency. The following website maintains an updated list of the disaster declarations by year and area: https://www.fema.gov/disasters/grid/year
Casualty Losses: the result of damage, destruction, or loss of property from any sudden, unexpected, or unusual event. This includes flood, hurricane, tornado, fire, earthquake, or volcanic eruption. Some losses due to vandalism, theft and human cause may also qualify. A casualty doesn’t include normal wear and tear or progressive deterioration.
The amount of loss not covered by insurance should be deductible as casualty losses for both your home and business — the difference is compliance or tax forms. For your home, you can claim casualty losses for any personal property on your individual tax return, Form 1040. Losses from the winery are business related and should therefore be claimed on the business return.
Yes, it is characterized as a non-cash donation. The value of the deduction will depend on whether the wine was an inventory item or wine collection. Typically, you will be limited to your cost basis. However, if you donate an inventory item, the amount of your deductible contribution is the fair market value (FMV) of the item minus any gain you would have realized if you had sold the item at its FMV on the date of the donation.
Note that depending on the value of the donated wine, additional information may be required. If the value of your non-cash donation exceeds $500, but is less than $5,000, you will need to include additional IRS tax forms with your tax return (Form 8283 Noncash Charitable Contributions). If the value of your non-cash donations exceeds $5,000 dollars, you will need to obtain an appraisal report from a qualified wine appraiser, unless it is inventory.
Most people think that R&D is only for tech and medical companies, but agriculture can also qualify for the Federal Research and Development Tax Credit. Eligible costs typically include employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent.
The Tax Credit allows a credit of up to 20% of the excess of qualified research expenses, which must meet the following criteria:
For wineries, the following processes may qualify for R&D Credit:
To claim the credit, a third party may be hired to perform a Research and Development study aimed at identifying qualifying processes and activities. If R&D efforts do not warrant a third party study, internal documentation with respect to innovative processes and activities should be maintained to support qualifying expenses for R&D credit calculation.
Any manufacturing, blending, and finishing of wine that is later poured into a bottle with a label for wholesale is considered an eligible production activity. IRC § 199 allows a business with “qualified production activities” to take a deduction equal to 9% of the lesser of (1) the qualified production activities income of the taxpayer for the tax year or (2) taxable income (determined without regard to Section 199) for the tax year. The deduction is also limited to 50% of the W-2 wages of the employer for the tax year. The IRC § 199 deduction is allowed for both the regular tax and the alternative minimum tax.
Bottom line, if you’re making wine and making money, there is 9% deduction in taxes that is available to you. Note that the Trump Administration’s tax reform proposal is seeking to eliminate this deduction, so take advantage of it while you can!
There are many special deductions available to agricultural businesses, here are a few that most wineries can benefit from:
Monic Ramirez is a Tax Partner at Sensiba San Filippo specializing in tax planning and compliance. She is an expert in multi-state taxation and foreign operations and works with a wide range of industries, including closely-held businesses, agriculture and manufacturing and distribution. Monic can be reached at mramirez@ssfllp.com or at 408.776.8900.
Tulare, Calif., (December 13, 2017) – May 2018 will bring elections for the Tulare County Farm Bureau board of directors. There will be terms ending in several of the district seats, and an election of new officers to be announced at the 101st Annual Meeting of the Members on May 1, 2018.
Interested candidates should contact the office, or the chair of the Nominating Committee, Joe Russell, to discuss their interest in serving. A brief application and interview are required of those interested in being nominated. The office can provide you the application.
The district seats match the Supervisorial Districts in the county (1,2,3,4,5).
District 2 (Tulare and the southwest corner of the County) will have two vacancies to be filled.
Other districts may also have vacancies with the rotation of officers or current directors moving into officer seats.
The board meets up to 10 times per year on the second Thursday of the month at 4:00 pm. Duties of the board include participation on one or more Farm Bureau committees, volunteering at a special event or taking part in fundraising efforts and membership recruitment efforts.
Call the office and discuss your interest. To be a candidate for the board you must be a Farm Bureau member in Tulare County, with an agricultural related occupation or income from farming. The director terms are for two years, and may be renewed up to eight years total.
Interviews with the nominating committee will be held in the next two months.
Sacramento, Calif., (December 13, 2017) – FELS’ Sacramento office has received inquiries concerning federal Occupational Safety and Health Administration (OSHA) regulations that became effective January 1, 2017. These regulations require employers in federal OSHA jurisdiction states to electronically submit Log 300 records of injuries and illnesses, with the intent of publishing these reports on OSHA’s Internet page. The new federal regulation also imposes new anti-discrimination requirements intended to prevent employers’ adoption of safety policies that could be construed to discourage reporting of workplace injuries and illness.
California is one of 26 U.S. states to exercise the option provided in the federal Occupational Safety and Health Act of 1970 allowing states to establish their own regulatory plans for occupational safety and health. These plans generally call for state-plan states to establish their own regulatory agency (Cal/OSHA, in California’s case), to promulgate regulations that protect employees as effectively as federal regulations and to operate enforcement programs that are as effective as federal enforcement. States that have not done so are under the jurisdiction of federal OSHA.
Employers in state-plan states are not obliged to comply with new federal occupational safety and health rules until their state’s regulatory process establishes regulations that are comparable to federal regulations.
Since Cal/OSHA has not yet adopted a regulation to implement the federal Log 300 reporting and anti-discrimination regulation, California employers do not need to comply with the federal regulation.
This regulation is the subject of ongoing litigation and federal OSHA has indicated it is reconsidering certain aspects of the rule. FELS will inform members of future developments.
Source: FELS, eNews, December 1, 2017
Parlier, Calif., (December 13, 2017) – Most California forests have too many trees, so carefully selecting pines, cedars or firs in natural areas to enjoy for the Christmas season is good for the mountain landscape.
“It’s a great idea to cut down young trees for fire safety and vegetation management,” said Susie Kocher, UC Cooperative Extension forestryadvisor in the Central Sierra. “The earlier you do it, the less work it is to manage the trees in the long run.”
Kocher lives and works in Lake Tahoe. Every year, she gathers her family and friends to find forest-fresh Christmas trees in the Lake Tahoe Management Area. Of the 18 national forests in California, 11 allow Christmas tree cutting with the purchase of a $10 permit. (See the list below.) People who own mountain cabins or other forestland may invite family and friends to help thin trees on their personal property, which can then be used for the holiday season. However, never harvest trees on public or private property without permission.
“We have a lot of small trees on public and private forest lands because of fire suppression,” Kocher said. “They’re all competing with one another and many will ultimately die. A smart harvest of Christmas trees can improve the forest by helping with thinning.”
People with permits to cut down Christmas trees in national forests must follow strict guidelines. Follow the same guidelines on private land to ensure a smart harvest. Before chopping down the tree, be sure it is within 10 feet of another living tree, the trunk is no more than 6 inches in diameter and the stump left behind is no higher than 6 inches off the ground. Some national forests limit the harvest to certain tree species.
Despite committing to these guidelines when obtaining a permit, Kocher said she has seen some Christmas tree harvesters make ill-advised choices.
“Some people are too lazy to find a good tree and will cut the top off a large tree,” Kocher said. “You can be driving around and see what looks like a poor old Dr. Suess tree, which is what grows from the ugly remnant left behind in the forest.”
Such irresponsible Christmas tree cutting has led some forests to discontinue Christmas tree harvesting for personal use.
There has been ongoing debate about whether a fake tree or real tree is more environmentally friendly, but for Kocher, there is no question.
“Fresh real trees are a renewable resource, fake trees are not,” she said. “It’s an agricultural product. You can contribute to a local farmers’ income or you can help thin the forest. Picking and bringing home a fresh tree, decorating it and smelling it defines the season for me. Without it, I don’t think it would feel like Christmas.”
U.S. National Forests in California that allow Christmas tree cutting with a permit are:
Davis, Calif., (December 12, 2017) – Chowchilla dairy farmer Michael McRee has been named the 2017 Conservation Agriculture Farmer Innovator by the Conservation Agriculture Systems Innovation (CASI) Center for his innovation and leadership in the development and use of conservation agriculture systems on his farm.
“Mike McRee has been extremely willing to share his experiences with others and has graciously hosted numerous public field days at his dairy farm over the years,” said Jeffrey Mitchell, UC Cooperative Extension cropping systems specialist and CASI founder.
The dairy producer, who milks about 2,000 cows at his farm west of Chowchilla, double crops his own dairy forage along with tomatoes and alfalfa crops on about 850 acres. After his pioneering efforts with strip-till – some of the very earliest in the entire San Joaquin Valley – McRee soon found that the conservation agriculture practice saved him time and money as he had anticipated, and yielded other important benefits for his farm as well.
McRee noticed improved water-holding capacity of his soil since working with strip-tillage, as well as increased consistency in the soil’s ability to absorb water, mellower soil overall, and more consistent crop stands and yields overall.
Improved soil tilth, increased soil organic matter and earthworms give him consistent yields year to year without extreme highs or lows.
McRee’s quest to improve the performance of his silage production systems began back in 2007.
He readily admits that he faced challenges early on.
He tried no-till wheat, but was limited in this effort by hard, compacted soils. Having the right equipment is a key to the whole endeavor, McRee points out.
He has worked with local NRCS partners and the EQIP program, which assists growers with implementation of practices to improve our soil, water and air resources.
Following a great deal of consultation with other growers and experimentation, he developed a very successful strip-tillage system for his silage corps. The change was spurred initially by his interest in reducing the number of times he had to drive a tractor through his fields to save fuel and labor.
He now does fall primary tillage using a Wilcox 7-shank subsoil ripper with a crumbler. Vertical tillage has replaced disc plowing to achieve a smooth seedbed without turning the soil over.
After winter forage is harvested, preparation for corn silage planting begins. McRee explains that he rips the soil down 13 to 14 inches and uses coulters to prepare the seedbed. After pre-irrigation, he uses the Dawn Pluribus strip-till row unit, a tool that preps an eight-inch band of soil for planting. Using GPS, he can run his tractor 6 to 7 mph for this pass.
“With three passes, I can do everything,” McRee said.
“Additionally, McRee has recently installed subsurface drip irrigation that utilizes dairy lagoon water for his silage crops,” said Priscilla Baker, NRCS soil conservationist in Madera. “This project is in partnership with the organization Sustainable Conservation.”
McRee received the award Oct. 13 at the annual meeting of the San Joaquin Valley Resource Conservation Districts held at the Wool Growers’ Restaurant in Los Banos.
In 2005, the University of California, NRCS and the Conservation Agriculture Systems Innovation (CASI) Center established the Conservation Agriculture Farmer Innovator Award as a means for providing greater visibility to conservation agriculture pioneers in California. The criteria for this award are demonstrated innovation and leadership in the development, refinement and use of conservation agriculture systems within the California crop production environment.
For more information about conservation agriculture systems, visit http://casi.ucanr.edu.
Hilmar, Calif., (December 12, 2017) – Most real Christmas trees sold in California are raised on farms, creating jobs and boosting the economies in rural areas.
That’s just one reason UC Cooperative Extension advisor Lynn Wunderlich encourages the use of fresh-cut Christmas trees during the holiday season.
“This is an age-old debate,” Wunderlich said. The American Christmas Tree Association says that PVC used in artificial trees is recyclable. If a household decorates with the same artificial tree for at least four years, the carbon footprint will be smaller than that of a household that purchases a real tree every year.
But the impact goes deeper. Wunderlich points out that artificial trees are mainly made in Asia. They have to travel a great distance to the U.S. compared to an American-farmed tree, eating up natural resources during transport. “Buy American,” Wunderlich says.
Besides, there are the transcendent benefits of real Christmas trees. Farmed trees provide open space and wildlife habitat during the off-season, and fill the home with a natural pine scent during holidays.
Their role in sequestering carbon is aided by a production practice used by many farmers, called “stump culture.”
“They use the same root system to regrow another tree, so the trees are regenerated,” Wunderlich said. “Trees are replanted regularly in other farming culture. Christmas trees sequester carbon. Nearly a ton of carbon per acre of trees, depending on species and number of trees planted on the land.”
While artificial trees end up landfills or energy-intense recycling plants, live trees are biodegradable. They can be naturally recycled by composting or shredded to use as mulch. Many communities offer curb-side pickup in the days after Christmas.
While farmed trees can be purchased on tree lots, home improvement stores, even grocery and drug stores, Wunderlich says a trip to a choose-and-cut tree farm is an enchanting family outing. Many Christmas tree farmers also provide food, crafts, activities and visits with Santa.
“Families can visit the farmer year after year as their children grow, so that’s part of the experience,” Wunderlich said.
Resources:
The California Christmas Tree Association maintains a directory of choose-and-cut Christmas tree farms around state.
Some National Forests allow Christmas tree cutting with a permit. Read more here.
Sacramento, Calif., (December 12, 2017) – Dry conditions prevailed throughout the state for the past week as a strong ridge of high pressure slowly moved eastward toward the Great Basin. Mild afternoons and chilly nights were experienced for most of northern California due to the persistent ridge. Elsewhere, the area of high pressure led to the development of strong Santa Ana winds which brought very dry conditions and contributed to the development of the fires across parts of southwestern California.
Temperature highs were in the 50s to 60s in the mountains, 60s to 70s in the valley and along the coast, and 70s to 80s in the desert. Temperature lows were in the 20s to 30s in the mountains, 20s to 40s in the desert, and 30s to 40s in the valley, and along the coast.
Cotton harvest neared completion. Growers continued to prepare fields for fall planting of wheat, barley, and oats. Silage corn grew well and harvesting was ongoing. Black-eyed beans were being harvested and processed. Recent rain helped germinate planted forage.
The apple harvest was nearly complete. Pruning continued in some stone fruit orchards and old orchards were removed and prepared for replanting. Table grape harvest was almost finished. Some vineyards were sprayed for weeds. Pomegranates, kiwifruit, and persimmons were harvested. Navel orange harvest was ongoing. Lemon, grapefruit, mandarin and pomelo harvests continued. Young citrus trees were bagged to protect them from frost. The extent of the impact of the southern California wild fires and Santa Ana winds on avocado and citrus orchards has yet to be quantified.
Almond and pistachio harvests were complete. Walnut harvest was nearly complete. Soil amendments were applied in orchards.
Brussel sprouts were being harvested. Broccoli, carrots, and lettuce all have excellent stands for the winter season. Fall and winter vegetables were being harvested and available at roadside stands. Continued cultivating of organic garlic was ongoing. Fresh onions fields and tomato beds were being prepared for planting. Organic cantaloupe harvest ended. Organic broccoli, celery and spinach fields were growing nicely. Head, leaf, and romaine lettuce for the fall season grew nicely with many fields starting to be harvested.
Non-irrigated and foothill rangeland forage quality continued to improve with north and central state locations reporting fair to poor conditions. Earlier rains and warm weather stimulated germination and foothill range and non-irrigated fields were showing green. Dairy workers were cleaning out corrals in preparation for winter. Supplemental feeding of cattle was ongoing. Sheep grazed idle cropland, stubble fields and dormant alfalfa.
Visalia, Calif., (December 11, 2017) – Tulare County Agricultural Commissioner released the current status today of Major crops in the most valued county in the California Ag portfolio. They report that Cotton fields are being shredded and disked to comply with Cotton Plowdown Regulations. All fields must be brought into compliance prior to December 20th. Seed is being shipped in and planted to winter forage crops such as wheat, barley, and other cereal grains and forage mixes. Irrigation is going to be needed to maintain growth without rain.
Table grape harvest is coming to an end, and grapes are being exported to China, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Indonesia, Malaysia, New Zealand, Nicaragua, the Philippines, and the United Arab Emirates. Kiwifruit are being shipped to the Dominican Republic, French Polynesia, Honduras, and Mexico. Persimmons are being harvested and sold domestically and exported to Mexico. Pomegranates are being exported to Korea. Pistachio nuts are being exported to China, Hong Kong, India, the Netherlands, and the United Arab Emirates. Almonds are being exported to Belgium, Hong Kong, Israel, Jordan, Korea, Pakistan, South Africa, and Taiwan. Pruning continues in some stone fruit and nut orchards. Some older, poorly producing orchards and vineyards are being removed and prepared for replanting.
The navel orange harvest is well underway, with exports of early varieties to Australia, Chile, China, Japan, Korea, Myanmar, New Zealand, Singapore, and Taiwan. Mandarins are being packed and shipped to Saudi Arabia. Pomelos are being harvested and sold domestically, as well as exported to Australia and New Zealand. Melogold hybrid grapefruit are being exported to Japan. Lemons are being exported to Australia, El Salvador, and New Zealand. Limes are being shipped to New Zealand. Finger limes are being exported to France, the Netherlands, and Switzerland. Young citrus trees are being bagged to protect them from the recent frost.
Fall and winter vegetables are being harvested and available at roadside stands. Strawberries are growing at roadside stands.
Rangeland forage conditions are fair to poor. More rain is needed to help with germination and growth of rangeland forage. Some supplemental feeding is required. The fed cattle market price was steady this week at $124.00 per hundred weight.
Bare-root roses are being received and processed for reshipment out-of-state.