Menifee County Extension Office 140 Main Street P.O. Box 85 Frenchburg KY 40322 Phone: 606-768-3866

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Mary McCarty Menifee County Extension

4-H/Ag Agent

PRESORTED STANDARD

US POSTAGE PAID FRENCHBURG KY

PERMIT 16

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INS IDE

THIS

ISSUE:

Tax Law Changes 2

Feeder Cattle Mar-

ket

3

Bale Grazing 4

Weaning 5

4-H Cricut Club 6

About 4-H 7

Calendar of Events 8-9

4-H Cooking Club 10

4-H Cloverbuds

Club

11

Parent Health Bul-

letin

12-13

Bourbon Barrel Lid

Fundraiser

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4-H Lunch Fund-

raiser

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M E N I F E E C O U N T Y

C O O P E R A T V I E E X T E N S I O N

S E R V I C E

1 4 0 M A I N S T / P O B O X 8 5

F R E N C H B U R G , K Y 4 0 3 2 2

6 0 6 - 7 6 8 - 3 8 6 6

6 0 6 - 7 6 8 - 2 5 2 4 ( F A X )

W W W . C E S . U K Y . E D U /

M E N I F E E

Menifee County Extension

News N O V - D E C 2 0 1 8 V O L U M E 1 4

It’s hard to believe that it is already November! As I write this, we are expecting yet again...more rain! And, under an-other flood watch. I don’t know what the Chinese have named 2018, but I call it “A Year For Ducks!! Currently, our grain farmers are dealing with crops that have many issues. Farmers still have hay fields that may have not been cut yet. Cattle farmers are having a very muddy season. Most of these issues have been caused by all of the rain. We should have a new FCS agent in the office after our Thanksgiving break. We will have a welcoming at the office for her and invite you to come introduce yourselves. Please “like” our Facebook pages to keep you updated on what’s going on with our ex-tension office. Have a safe and happy holiday sea-son.!

Mary McCarty Menifee County Extension

4-H/Ag Agent

5-7 p.m.

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.In the past, personal property that was used as a trade-in on a purchased item was treated as a “like kind” exchange. The Tax Cuts and Jobs Act changed the wording to accommodate only real property as eligible for like kind exchanges. Starting in 2018, personal property (i.e., equipment and livestock) will be treated as being sold when a trade occurs. This could potentially have both good and bad conse-quences.

For example, let’s say you have Tractor A that you plan on purchasing. The full cost of Tractor A is $150,000. You are going to trade Tractor Z in and the trade allowance is $70,000. Under the old law you would not report the sale of Tractor Z, it would continue to depreciate out and be marked as a traded item on your asset schedule. Meanwhile, Tractor A would be put on your depreciation schedule with a cost (basis) of $80,000 ($150,000-70,000.) Under the new law, Tractor Z will be sold for $70,000. If there is any cost left to depreciate then that will reduce the amount of gain or recapture on Tractor Z. Tractor A will be put on the depreciation schedule at $150,000 cost (basis.) The sale of equipment and livestock is reported on a Form 4797 on the income tax return. The sale gen-erally results in gain being reported as recaptured depreciation (taxed at ordinary income tax rates) or capital gain (taxed at capital gain rates.) Neither of which are subject to self-employment tax. Let’s as-sume that Tractor Z was depreciated out, the entire sales price of $70,000 would be income reported on the Form 4797, under the new law. The entire cost of $150,000 of Tractor A is available for depreciation on your Schedule F (farm income and expenses.) Most likely some combination of depreciation allowances like Section 179 and/or Bonus Depreciation will be used to get the Schedule F to the net amount preferred. Keep in mind that the goal of tax planning is not to avoid taxes but rather to be consistent in the income tax brackets and avoid large swings in income levels from one year to the next. Continuing the example above, let’s assume the taxpayer has no other means of income and generally keeps the amount of ad-justed gross income in the area of $75,000. The gain on the sale of the tractor was $70,000 on the Form 4797. Ideally, the taxpayer would then have a Schedule F net income of $5,000 to be consistent on the overall amount of adjusted gross income. Remember, self-employment tax is only on earned income such as the schedule F and not Form 4797. On the positive side, taxpayers could pay less in self-employment tax than they have in previous years. In the example, the taxpayer is paying self-employment tax on $5,000 rather than $75,000. The flip side of that argument is that taxpayers need to keep in mind that paying less (or zero) amounts of self-employment tax could have a negative impact of future retirement earnings or even qualified quarters for disability payments. Another factor to consider is the difference between federal and state depreciation laws. Kentucky has lim-ited the Section 179 deduction to $25,000 and the deduction gets phased out if the equipment purchases are greater than $225,000. Kentucky also does not allow for bonus depreciation. This means that there will like-ly be substantial differences in gain between the Kentucky and federal income tax returns. Taxpayers will need to let their tax preparers know when items have been traded and how much was allowed on the trade-in. As always, taxpayers need to plan ahead and visit with their tax preparers before the end of the year to avoid any surprises when they file their returns.

Tax Law Changes for Traded Items Suzy Martin

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employment tax than they have in previous years. In employment tax on $5,000 rather than $75,000. The flip side of that

employment tax

Another factor to consider is the difference between federal and state depreciation laws. Kentucky has lim-ited the Section 179 deduction to $25,000 and the deduction gets phased out if the equipment purchases are greater than $225,000. Kentucky also does not allow for bonus depreciation. This means that there will like-

Taxpayers will need to let their tax preparers know when items have been traded and how much was allowed

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Sometimes it’s necessary to step back and access where the market is, without getting distracted with the constant changes that are happening on a daily basis. If you had asked me this time last year, how I thought fall 2018 cattle prices would compare to fall 2017, I would have very quickly told you that I thought price levels would be lower in 2018. The primary reason for this expectation was supply. Those increased supply expectations have come to fruition, but prices have largely held near last year’s levels. While production forecasts have evolved throughout the year, production levels of all major meats have been moderately higher for 2018. Beef, pork, and broiler production is forecast by USDA to be up by 2.9%, 3.3%, and 2.2%, respectively, for 2018. Holding everything else constant, this is typically a recipe for lower prices. But, the market has largely absorbed these production increases. Part of the reason has been strong export levels. Despite some trade barriers that have been in place since summer, beef exports have been above 2017 levels all year. This, coupled with a relatively strong US economy, has largely supported beef prices, and in turn cattle prices. Figure 1 depicts state average price levels for Medium and Large Frame 550 lb feed-er steers in Kentucky auction markets. In addition to what was mentioned previous-ly, calf markets have also benefited from good fall forage growth, which has spread fall calf runs out more than usual. When this article was written, I just had three weeks of October prices to include, but I did go ahead and include October in the chart. You will notice about a $3 per cwt drop in prices from September to October, which puts October 2018 prices within $0.50 per cwt of October 2017.

In many ways, I have actually been more surprised by how high heavy feeder cattle prices have been. A lot of large groups of 800-900 lb steers are still moving in the $150’s and I would make an important point that applies very often in the fall. Heavy feeders moving now, are still being sold based on spring CME© Live Cattle futures prices. At the time this was written (October 23, 2018), April CME© Live Cattle futures were trading at about an $8 premium over the June contract. As we move towards the end of the year, June will become the driver of our heavy feeder cattle market, rather than April. And, unless something else fundamen-tally changes in the market, the current prices levels are likely to be unsustainable for heavy feed-ers as their expected sale price when they come off feed will be much lower.

Feeder Cattle Market Continues to Hold Steady Kenny Burdine

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. Winter feeding areas for beef cattle were quagmires of mud that I cannot get out of my head. These muddy areas turned into to this year’s crabgrass-ragweed pastures. Are we destined to repeat this scenario? If nothing changes, probably so.

Bale grazing may be a practice worth considering to help address the issues of mud. Depending on your con-ditions, it might even save money in the process.

Bale grazing is the practice of putting out bales in the fall for feeding later on in the winter. These bales are spaced so they can be allocated using temporary electric fencing and portable hay rings. This practice has been used for years in areas further north.

The advantages of bale grazing include less traffic damage due to moving hay across saturated access points, spacing out the hoof damage across a greater area, improving soil fertility and organic matter, reducing mud and lessening runoff of nutrients into streams and ponds. The negatives include the potential of having to re-seed larger areas of ground and the need for large areas of upland well drained soils to feed on.

Fred Thomas in Adair County has been using bale grazing for a few years. He has seen an improvement in soil fertility from bale grazing and spends a lot less time on a tractor in the bitter weather of winter. In fact, Fred knows that he saves $30 per month by not having to keep his tractor block heater on during the winter.

Fred Thomas placed bales 50 feet apart the first year, and needed to reseed the area completely. He used this as an opportunity to reseed novel endophyte tall fescue the following fall after growing a crop of Sudan grass and sorghum-Sudan grass. No additional fertility was needed for the summer grazing due to the nutrients left behind from bale grazing. Thomas is planning for more space between bales (150 feet) this winter to lessen the forage damage.

Before and after soil tests showed Thomas improved both his P and K status of the areas where he bale grazed, especially the K. Roy figures that Thomas saved at least $20 per acre in fertilizer costs due to one winter of bale grazing.

Here are some tips for bale grazing:

Locate bales on well drained soils

Keep bales away from surface water and creeks

Allocate about 1 bale per 10 cows per feeding so each has room to eat

Limit bale feeding time to about 3 days per spot

Be prepared to reseed in spring

High quality hay will work better because animals clean it up and leave less residual to limit grass growth next spring.

Bale grazing might not be right for you, but it is an intriguing option. Happy foraging. ~ Dr. Jimmy Henning, Farmer’s Pride Sept.

Bale Grazing is it for You?

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Stirring the Pot at Weaning Jeff Lemkuhler

The many challenges facing the beef industry today sometimes can seem a bit overwhelming. Issues such as lab grown meat, trade negotiations, genomics, antibiotic utilization, sustainability, and so many other issues are thrown into the stone soup of beef production. At some point you have to wonder when will the soup be spoiled by so many spices. The best thing you can do is be familiar with the components you are adding. This means we need to be as informed as we possibly can about our in-dustry’s driving forces.

What main ingredient is stirred into the industry “soup pot” every fall? This time of year folks are weaning and marketing their spring-born calf crop. Weaning is a transition phase for calves and, to keep our “soup” from spoiling, we need to be knowledgeable of management practices that can reduce the stress that calves experience due to the many changes during this period. Stressors a calf may expe-rience at this time include dam and herd separation, diet change from milk and grass to hay and grain, castration / dehorning, and altering the physical location of calf from pasture to a drylot pen. All these factors can stress the calf (add spice to the soup pot) especially if another “spice” is added. A major spice that can ruin the weaning soup is weather. The drastic weather changes we experienced this past week (daily average temperature dropped 30-35 degrees F in one week) add a major “spice” to the stressed-calf soup pot. The weather impacts our markets that were a bit soft the other week as yards had muddy pen conditions and perhaps were reluctant to place bawling calves. You can’t control the weather, but you can control when and how you market the calf crop.

What is the normal “recipe” for weaning soup? 1) Abruptly remove calves from their dams, 2) load them into a trailer to transport them to market facility, 3) separate them from herd mates, 4) haul them to an unfamiliar location and commingling with strange calves, and 5) transport them several hours to a completely different state with different climate conditions and surroundings. No wonder this soup often spoils?! We have all seen this recipe before. The question is how long will we be allowed to make this entrée?

Change is hard and replicating the perfect recipe often never happens. However, the more care we take to follow the recipe the greater the chance the results will be similar to the last time. Vaccinating calves prior to weaning will boost immunity. Weaning on pasture eliminates the physical location change. Fenceline weaning may ease dam separation and allow calves to rebound quicker. Castrating and dehorning at a young age is one more element that does not have to be associated with this time of year. By planning and applying simple management practices and making slight alterations, we have changed our recipe and in many instances simplified our weaning recipe.

Less stress on the calf, means less stress on you. This is not the only reward. In many markets this fall it appears that the value of a weaned calf is being communicated and higher prices are being paid. I will argue that sometimes you shouldn’t have to be rewarded for doing what is right, but that’s an ar-gument we can have over dinner sometime.

The Cooperative Extension Service's educational programs serve all people regardless of economic or social status and will not discriminate on the basis of race, color, ethnic origin, national origin, creed, religion, political belief, sex, sexual orientation, gen-der identity, gender expression, pregnancy, marital statis, genetic information, age, veteran's status or physical or mental disabil-ity. To file a complaint of discrimination, contact Tim West, UK College of Agriculture, 859-257-3879; Terry Allen or Patty Bender, UK Office of Institutional Equity and Equal Opportunity, 859-257-8927; or the USDA, Director Office of Civil Rights, Room 326-W Whitten Bldg., 14th & Independence Ave. SW, Washington, DC 20250-9410 (202-720-5964).

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November 13th @ 5

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What Does 4-H Have to Offer

4-H is the nations largest youth organization committed to building outstanding leaders. 4-H members are organized in project and school clubs that meet monthly. 4-H is open to anyone that is 9-18 (Jan 1). New opportunities are always available thru 4-H.

Is overnight camping for members 9-15 as of the day of camp. We camp in London, KY at Camp Felt-ner for 3 days and 4 nights. June 3-6, 2019 is this years dates. There is a cost to 4-H Camp. However, fundraiser are held through out the year and sponsorship are received to give scholarships to 90% of Menifee County campers. Junior Counselors 16-18 and adult volunteers are needed to make 4-H Camp a success.

4-H is in 4th and 5th grade school clubs with hopes to add more grades to the list. Students learn Rob-erts Rules of Order and also get a monthly lesson on 4-H Core area that is chosen by their teacher. Stu-dents also do a class project of either a speech or an demonstration.

4-Hers use computers and a Cricut (die cutting machine) to design gifts, room décor, cups, and other projects. Depending on the project most classes are free. Homeschool club is open to any homeschool student to participate in 4-H school club like activities.

Activities for school club will give an introduction to everything that 4-H has to offer. Meetings are held at the Extension Office.

Robotics is held afterschool at the 4-Her school or at the Extension Office in the evenings or on Satur-day morning. 4-Hers use laptops to program EV3 robots to perform different challenges.

4-Her learn skills to cook meals and dessert at home. Members have fun whipping up their own sweet treats, healthy snacks, and meal ideals.

This club offers youth the opportunity to learn safely and properly shoot archery, shotgun, and rifle. Look for new disciplines to be added in the future. This club meets March—September. Members have the opportunity to compete in shoot matches in surrounding counties and at state.

Teen Club will learn leadership and team building skills through outdoor adventure activities. They will meet monthly the Extension Office.

Members will learn about breeds, parts, systems, ID, and other important facts about animals. Mem-bers have the opportunity to participate in the country ham project, skeletons, judging contest, and rais-ing and showing animals at 4-H events.

4-H Camp

4-H School Enrichment

4-H Cricut Club

Homeschool 4-H Club

4-H Robotics

4-H Cooking Club

4-H Shooting Sports

4-H Teen Club

4-H Animal Science Club

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November 2018 Sun Mon Tue Wed Thu Fri Sat

1 2 3

4 5 6 7 8 9 10 4-H

Robotics 10-2

11 12 BQA

6:00pm

Home and Hearth

Korea 6:00

13 Cricut Club

5:00pm

14 15 Cooking

Club 5:30pm Cabin

Country 11 Big Woods

16 17

18 19 Homemaker

Planter 3:30

First Club

6:00p

20 Camp

Fundraiser

CloverBuds 5:30

21 22 Thanksgiv-

ing Office Closed

23

Office Closed

24

25 26 District

Horse Meet-ing 6:30

27 28 29 Barrel Lid Painting

Class 6:00pm

30

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December 2018 Sun Mon Tue Wed Thu Fri Sat

1 Horse Vol-

unteer Training

2 3 4 5 6 7 Xmas

Parade

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9 10 Botts After

School Home and

Hearth Korea 6:00

11 Botts After

School

12 Botts After

School

13 Botts After

School Beef

Producers 6Pm

14 Botts After

School

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16 17 First Club

6:00p

18 19 20 Cabin

Country 11 Big Woods

21 22

23 24 25 Christmas

Office Closed

26 Office Closed

27 Office Closed

28 Office Closed

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30 31 Office Closed

1 Office Closed