Volume 12, Number 9 - September 2006

This Month in Ag Connection

• TMDL's - Coming To a Farm Near You!!
• New Generation Cooperative Investment: Gain or Loss on Disposal?
• Alfalfa Stand Evaluation Timing
• MoDOT, MDA Waive Fees For Hay Hauling Permits

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TMDL's -- Coming To a Farm Near You!!

Missouri has over 200 waterbodies subject to having Total Maximum Daily Load (TMDL) standards applied to them for a broad range of pollutants ranging from chemical contamination, to excessive sediment loads, to elevated nutrient and bacterial levels.

The Clean Water Act (CWA) and the Safe Drinking Water Act (SDWA) were both passed by congress in 1972. The Clean Water Act sets minimum standards for water body contamination. The Safe Drinking Water Act sets minimal standards for public drinking water supplies after the water has been through treatment.

Safe Drinking Water Act standards are expressed as Maximum Contaminant Levels (MCL's). MCL's are the amount of pollutant deemed acceptable in drinking water after it has been through treatment. The Environmental Protection Agency has set MCLs for literally hundreds of compounds that may be found in drinking water supplies.

From an agricultural perspective probably the most notable of these is the standard of three parts per billion (3ppb) for Atrazine. One of the most common analogies used to help visualize what is meant by three ppb is to compare it to three ounces in 7800 gallons of water.

All public drinking water supplies within the state of Missouri are monitored quarterly (or more) to assure compliance with the MCL's and other standards. With few exceptions this monitoring is accomplished by the utility's treatment plant operator collecting samples and submitting them to the Missouri Department of Natural Resources for analysis. This is where the Safe Drinking Water Act and the Clean Water Act intersect. Treatment to meet drinking water standards is easier with a cleaner water supply to start with, is more cost effective and provides a better final product.

One of the provisions in the Clean Water Act set minimum quality standards for raw water known as total maximum daily loads. Raw water can be defined as water that has not been treated. A TMDL is the acceptable level of a specified pollutant in un-treated water. These standards apply to most lakes and streams of any appreciable size within the state - both drinking water supplies and non-drinking water bodies.

The Missouri Department of Natural Resources is legally obligated to set these standards. To date DNR has chosen to work with local groups on developing the standards and voluntary implementation of practices to achieve compliance. This is where the private land owner has the opportunity to have major impact on the process by providing input by helping write the standards and determine what practices are most acceptable to local people within the watershed. The Central Missouri region has the following waterbodies out of compliance with DNR standards and will need your input as TMDL's are established:

Audrain	Vandalia Reservoir
Benton	Truman Lake
Boone	Lake of the Woods	Rocky Fork	Hinkson Creek	Grindstone Creek	Missouri River
Callaway	Cedar Creek, 2 reaches	Manacle Creek	Stintson Creek
Carrol	Missouri River
Chariton	Missouri River
Cole	Hough Park Lake	Missouri River
Cooper	Lamine River	Missouri River	Blackwater River
Howard	Missouri River
Moniteau	E. Brusy Creek	Missouri River
Morgan	Straight Fork
Osage	Ben Branch Lake	Osage River	Missouri River
Pettis	Brushy Creek	Little Muddy Creek	Hess Creek	Heath's Creek	Spring Fork Lake
Saline	Missouri River

For a complete and updated list see: http://www.dnr.mo.gov/env/wpp/waterquality/2002_303d_list.pdf

These guidelines have direct impact on agribusiness and farm operations. These are things that may affect your farming operation, whether you are a crop or livestock producer. Future articles will address these topics further. We all live within a watershed. What we do in that watershed will affect the waters in that watershed.

(Author: Dan Downing, Water Quality Associate, University of Missouri)

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New Generation Cooperative Investment: Gain or Loss on Disposal?

It is becoming increasingly common for producers to have investments in new generation cooperatives. From questions that are beginning to surface regarding the tax treatment of gain or loss if a producer sells some or all of their investment in a new generation cooperative, there appears to be some confusion on tax treatment of these sales.

Some tax preparers have suggested that if there is a requirement that investors have to be a producer - the gain or loss on disposal of the investment should be reported as a Section 1231 ordinary gain or loss (not Section 1221 capital gain or loss). Section 1221 provides for long-term capital gain or loss treatment.

Dr. Neil Harl, a noted ag economist and attorney, indicates in an Ag Decision Maker article that cooperative stock does not fall within the definition of 'property used in a trade or business'.

Code Section 1231 provides "The term 'property used in the trade or business' means property used in trade or business, of a character which is subject to the allowance of depreciation provided in section 167, held for more than 1 year, and real property used in the trade or business, held for more than 1 year ...."

Further, Harl reminds us the IRS Code provides that all assets are considered to be capital assets other than for specific exceptions. The exceptions are:

1. inventory property
2. property held by the taxpayer primarily for sale to customers in the ordinary course of a trade or business
3. depreciable property used in the trade or business
4. real property used in the trade or business
5. copyrights and compositions
6. U.S. Government publications

Given cooperative stock does not appear to fall within any of the above exceptions, gain or loss from the disposal of stock in new generation cooperatives should qualify for Section 1221 capital gain or loss treatment.

Dr. Harl's article can be read online at: http://www.extension.iastate.edu/AgDM/articles/harl/HarlFeb02.htm

(Author: Parman R. Green, Ag Business Management Specialist)

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Alfalfa Stand Evaluation Timing

Early September is a good time to make alfalfa stand replacement decisions on existing fields. The stand should be evaluated on plant density, stem density, weed competition and crown and root health.

Stem density is better than plant density as an estimator of yield. Stem density is easiest to count after plants are 4 to 5 inches tall. Make a one foot square out of wire or wood. Drop the square randomly in 10 to 15 places to get an average stem count and a plant count. Count only robust stems which will be cut by a mower. Ten stems per square foot have been shown to yield about 1.2 tons of dry matter per acre in University of Wisconsin trials. These researchers found an almost linear yield response to stem counts to 50 stems per square foot yielding 5.5 tons per acre.

To evaluate crown and root health, dig the top 6 inches of a crown at three random locations per ten acres. Evaluate the crowns for size, symmetry and split the root lengthwise. Use the following chart to categorize each plant.

Rating 0:	Rating 1:	Rating 2:	Rating 3:	Rating 4:	Rating 5:
large crown, symmetrical, many shoots	large crown, less symmetry, many shoots, some root discoloration	smaller crown, poor symmetry, fewer shoots, crown rot	Smaller crown, poor symmetry, significant crown rot, root discoloration	lack of symmetry, few shoots, 50% of root diameter rotted	dead plants

Individual plants approaching 50% root rot (rating 4) will probably not survive a normal winter. Healthy stands have fewer than 30% of the plants in categories 3 and 4. If you have a high percentage of these plants you should consider rotating the alfalfa stand.

In conclusion, plant counts decrease slowly as the stand ages. As stands thin, the crowns spread to produce more shoots. This partially offsets the loss of plants and maintains the stem density above 35 stems per square foot, which is a density sufficient to maintain high yield in Mid Missouri. However, as stands grow older and naturally thin, weed control and good fertility become increasingly important to maximize crown size and stem production, slow plant death, and maintain reasonable productivity. Scouting fields gives additional information to make informed decisions.

(Author: Rich Hoormann, Agronomy Specialist; Source: Southwest Center RUMINATIONS, Vol. 5, No. 1; University of Wisconsin-Extension Publication A3620.)

Stand Density Recommendations

Stand Density (stems per sq. ft.)	Action	Predicted Yield Potential
>55	Stem density not limiting yield	Same as current year
40-55	Some yield reduction expected	If good health, same as current year; if >30% crowns in category 4, significantly less
<39	Consider replacing stand	If good health, same as current year; if >30% crowns in category 4, significantly less.

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MoDOT, MDA Waive Fees For Hay Hauling Permits

Extreme weather conditions this summer have resulted in a widespread hay shortage. The Missouri Departments of Transportation and Agriculture are working to help Missouri's farmers cope with the situation.

At the request of MDA, MoDOT is waiving the fee for blanket permits to haul wide loads of hay. The fee will be waived statewide through December 31 on loads up to 12 feet, four inches wide that are of legal height, length and weight.

In addition to this savings of more than $60, the waiver will allow hay movements to take place over holidays and at night, a practice normally not allowed. Drivers are usually required to use a reflective, oversized load sign and clearance lights instead of flags at the edges of their loads when hauling at night or when visibility is less than 500 feet. When utilizing the provision for hauling at night, keep in mind that many Missouri highways are narrow, hilly and winding. Keep safety in mind when hauling at night. Use slow moving vehicle emblems, lighting, and possibly flag vehicles to reduce the chance for accidents.

(Author: Don Day, Natural Resource Engineer, Source, MoDOT News Release)

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