Volume 11, Number 7 - July 2005

This Month in Ag Connection

• Taxation Tidbits: Farm Labor Tax
• Dung Beetle
• Private Applicators Spraying for Others
• Plan Now for Winter Grazing
• West Nile Virus

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Taxation Tidbits: Farm Labor Tax

Many farmers only hire part-time employees or hire help for special projects. Keeping current on the labor tax regulations can be especially difficult for these farmers. As a general rule, Social Security and Medicare must be withheld and matched on wages paid to employees of your business. Additionally, wages subject to Social Security and Medicare taxes are also subject to income tax withholding. Here are some of the basic rules for farm labor taxes.

The $150 or the $2,500 Test:
Wages paid during the year for farm work are subject to Social Security and Medicare taxes and income tax withholding if either of the following two tests is met:

• You pay wages to an employee totaling $150 or more for the year for farm work, or
• The total wages (cash and noncash) paid during the year for farm work to all your employees is $2,500 or more.

Wages Paid-in-Kind:
Commodity wages are not considered cash wages and are therefore not subject to Social Security and Medicare taxes or income tax withholding. Several i's must be dotted and t's crossed in order to insure commodity wages are not reclassified by the IRS as cash wages. Work with a tax specialist if you desire to utilize commodity wages in your employees' compensation package.

Employment of Family Members:
Wages paid to your children under age 18 are exempt from income tax withholding, Social Security and Medicare taxes. If your child becomes 18 during the year, wages paid following that date are not exempt. Wages paid to your children are included in calculating the $2,500 test.

Compensation paid to your parents is exempt from income tax withholding, Social Security and Medicare taxes, if the work:

• is for domestic services in or about the private home of the son or daughter,
  or
• is performed outside of the son's or daughter's trade or business.

Payment of Labor Taxes:
Labor taxes need to be deposited monthly or semiweekly. If your total labor tax for 2003 (the lookback period for 2005) was less than $50,000 - you should deposit your labor taxes monthly. However, if you are sure your 2005 labor taxes will be less than $2,500 - you are not required to make deposits and can send your total labor tax payment with Form 943 "Employer's Annual Tax Return for Agricultural Employees".

As an agricultural employer you need to have a basic understanding of the labor tax regulations. Withholding labor taxes correct is the best policy for you and your employees. Explaining the reason for corrective withholdings later in the year can be embarrassing for you and might create financial concerns for your employees.

Source: IRS Circular A, "Agricultural Employer's Tax Guide"
This publication is available online at: http://www.irs.ustreas.gov/pub/irs-pdf/p51.pdf

(Author: Parman R. Green, MU Extension Ag Business Mgmt. Specialist)

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Dung Beetle

When listing beneficial insects, dung beetles or tumblebugs would not make most people's long list. This is unfortunate since dung beetles can have a significant positive impact. It has to be from their habit of literally diving in and savoring something we try to stay as far from as possible.

The diet of both adult and larval dung beetles consists mostly of manure. Although, all manures are "ripe" for dung beetle activity, those from large plant eaters, like cattle, seem to be preferred. Where dung beetles are numerous and active, manure pats from cattle rarely last more than 24 to 36 hours. On an Oklahoma ranch it was estimated dung beetles following the herd buried a ton of wet manure per acre per day and remove 90% of the surface material.

Most of us think of the rollers. Dung beetles using balls of manure rolled away from the pat are actually the minority. Tunneling beetles make up the greater percent of species. They dive in and make tunnels under the manure pat where one to several manure balls are placed from an inch or two below the soil surface to several feet down.

The benefits of dung beetles include:

• Increased grazing - by accelerating the degradation of dung, dung beetles return areas of pasture to grazing that would otherwise have been covered by dung.
• Nitrogen recycling - by incorporating the dung back into the soil, dung beetles return tons of nitrogen to the pasture ecosystem that otherwise would have been lost into the atmosphere.
• Reduced parasitism - by feeding in the dung pat and causing it to dry out more quickly, dung beetles disrupt the lifecycle of gastrointestinal and other parasites hatching in the pat, and thereby reduce their incidence in cattle.
• Reduced pest flies - by drying out the dung pat, dung beetles also reduce its suitability as an egg laying (breeding) site for pest flies. Some dung beetles will feed on fly eggs and small fly larvae.

The potential economic benefits that could be derived from rapid burial of livestock feces by dung beetles could be considerable. This can include increased grazing, more efficient nitrogen recycling, reduced parasitism, and reduced fly pests.

Other benefits include:

• Increased forage yields arising from the incorporation of organic matter into the soil
• A resulting increase in water retention, aeration, and soil friability
• Reduction of other livestock pests breeding in cattle dung
• Reduction of animal diseases by removing contaminated dung from the surface of the pasture
• Return of nutrients other than nitrogen to the pasture ecosystem
• Increased aesthetic value of the countryside.

Dung beetle larvae are susceptible to some insecticides used for fly and internal parasite control for cattle. Ivermectin injectable, used at the recommended dose, reduced survival for 1 to 2 weeks. Ivermectin pour-on reduced survival of the larvae for 1 to 3 weeks. Most detrimental was Ivermectin administered as a bolus, with effects lasting up to 20 weeks. In contrast, moxidectin is less toxic to dung beetles and did not reduce dung beetle survival. Occasionally, horn fly and/or face fly pressure on the cattle will require treatment to provide relief to the cattle, so some impact on dung beetle populations may be unavoidable.

Backrubbers, ear tags, and the use of insecticide dusts and sprays only when needed are alternatives having little or no effect on dung beetles. Another option is to treat cattle during the coolest months of the year, as the beetles and larvae are inactive at those times.

Controlled grazing systems increase dung beetle populations and varieties by concentrating the manure in smaller areas, thus reducing the time beetles must spend in search of food. Also, manage pastures to improve dung quality. If pastures are productive with high quality forage, it will enhance dung beetle populations from better quality manure.

(Author: Jim Jarman, Agronomy Specialist)

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Private Applicators Spraying for Others

Certified Private Pesticide Applicators have asked if there is a crunch with soybean rust (SBR), can they legally spray fields of others. These applicators are worried about neighbors who may not be able to get commercial applicators to apply SBR fungicides in a timely manner.

The Missouri's pesticide use regulations say private pesticide applicators can not take money or any legal tender for applying pesticides on the lands of another. This includes commodities that can be turned directly into cash. Only services can be traded for pesticide applications. To make sure the regulations are not broken, a private applicator can call the Missouri Department of Agriculture, (573) 751-2462, to ask for a clarification for specific situations.

(Author: Jim Jarman, Agronomy Specialist)

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Plan Now for Winter Grazing

This seems like a strange time to be talking about winter grazing, but developing winter grazing programs takes time and planning. Stockpiled pastures can provide very high quality feed late into the fall and early winter. In fact, I have collected some non-grazed stockpiled fescue forage in mid-January at the University of Missouri Thompson Farm near Spickard that tested 17 percent crude protein and 57 percent TDN.

In addition to the high quality, it is also much less expensive to have cattle grazing compared to hauling them hay. Typical costs for grazing stockpiled fescue range from 25 to 35 cents per head per day. Typical costs for hay feeding run upwards of 75 cents per head per day, depending upon the amount and type of supplement needed.

Stockpiling systems require the removal of spring growth, either by hay harvest or grazing. This should be accomplished by late July or early August and prior to nitrogen fertilization. In a newsletter, Jim Gerrish, formerly of the Forage Systems Research Center at Linneus, MO makes the following additional key points for successful stockpiling.

1. Choose the best fields. In the lower midwest and upper south, tall fescue dominant fields remain the best choice for stockpiling. Usually mixed pastures weather better than monocultures, with the exception of fescue. Orchardgrass by itself does not stockpile well, but in a mixture may be a very satisfactory component. In areas where the soil does not remain frozen all winter, avoid wet sites and low lying fields.
2. Timing. Having enough late season growing period to allow good yields but not too long to allow deterioration of feed quality is critical. We estimate that the maximum per acre yield is achieved with about 75 days of growth in the late summer-fall growing season. Stockpiling longer than this will not result in any more stored feed per acre but will result in lower quality forage. To determine when to begin stockpiling pasture, estimate your last day of active growth in the fall and back up about 75 days. In mid-Missouri, we consider November 15 to be the end of our growing season, so we target August 15 as the beginning of the stockpiling season.
3. Fertilization. Applying 40 to 60 pounds of N per acre at the beginning of the stockpiling period is usually a cost-effective practice. If soil moisture is favorable, use the higher rate. If conditions have been dry, use the lower rate. There is a question if fall N application will pay in pastures where at least 30-40% of the annual production has been coming from a legume.

Research done at FSRC and the fall grazing demonstrations I did at the Thompson Farm near Spickard show definite advantages to some type of strip-grazing program. Maximum forage allocations should be a week or less, depending on your situation and goals. Restricted access provides higher forage utilization, more even nutrient intake by the livestock and extends the grazing period of the fall stockpile without sacrificing animal performance.

Restricting animal access is easily accomplished with temporary electric fencing materials. Begin by fencing close to the water source and moving the fence out from there. Since we are not concerned with regrowth at this time of year, no back-fence is required to keep animals off previously grazed areas. These fences can be easily and quickly moved once or twice a week and no machinery is required.

Recent research has shown ergovaline concentrations in stockpiled tall fescue declined over time, see Figure 1. Forage quality declined slightly over time, but the benefit of lower ergovaline levels appears to offset this decline in forage quality. Stockpiled tall fescue still has, on average, higher energy and protein levels than fescue hay, see Figure 2.

If you're looking at reducing winter feeding costs, begin planning now for utilizing stockpiled forages. I'm confident you'll like the results.

(Author: Gene Schmitz, Livestock Specialist)

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West Nile Virus

There have been no reported cases of WNV in horses in Missouri in 2005, to date. We feel that it is likely that this year will be similar to 2004, in which very few equine cases of WNV were reported for Missouri. The decreased incidence of WNV in our horses is likely attributable to either the acquisition of general immunity in the horse population through natural exposure or the widespread use of vaccines against WNV (or a combination of both).

Veterinarians at the University of Missouri recommend that horses be vaccinated on a regular and appropriate basis by veterinarians and that a "booster" vaccine should be administered to previously-vaccinated horses ahead of the WNV "season" (typically June through October). For best results, a vaccinal booster should be given in Mid-May. If a booster was not administered earlier this year, it can still be given to provide some protection for the remainder of the season.

UMC diagnosticians will continue to monitor for new cases of WNV in horses. Anyone can follow the progress of this disease throughout the United States (on a county-by-county basis) by visiting the following website: http://diseasemaps.usgs.gov/

(Author: Philip J. Johnson, Professor and Instructional Leader, Equine Internal Medicine, UMC)

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