Ag Insight

Behind all the statistics reporting on how many people have received shots of the COVID-19 vaccine, a federal government agency has been quietly assisting that effort. That role came to light recently when the U.S. Department of Agriculture announced that qualified staff members had reached the milestone of administering 1 million doses of the vaccine throughout the country.

In response to the Biden Administration call to designate federally supported community vaccination centers across the country, USDA has been offering its clinical staff, facilities, cold storage infrastructure, public health experts and disaster response specialists for the effort.

With many of its operations in rural areas, the agency has used that footprint to help expand the vaccination effort particularly among tribal communities and socially disadvantaged groups.

In a recent count, more than 1,000 USDA personnel had been deployed as part of the vaccination campaign.

To say the federal estate tax, derisively referred to as the “death tax” by many of its opponents, hasn’t enjoyed much popularity since it was made a part of the tax code more than 100 years ago would be a gross understatement.

But the tax, a levy on the transfer of property from a deceased person to the heirs at death, applies only to that portion of an estate’s value that exceeds an exemption amount. As a result, it has never applied to all estates and its impact has diminished due to legislative changes in the exemption.

The tax exemption has increased from $675,000 in 2000 to $11.58 million in 2020. Under present law, the estate of a person who at death owns assets in excess of the exemption amount must file a federal estate tax return. However, only returns that have an estate above the exemption after deductions for expenses, debts and bequests to a surviving spouse or charity are subject to tax at a rate of 40%.

Two additional provisions further reduce estate tax liability for those estates that must file an estate tax return: portability and special use valuation.

The portability provision applies specifically to married couples and allows a spouse whose taxable estate is less than the exemption amount ($11.58 million in 2020) to transfer any unused portion of their exemption to their surviving spouse. This unused portion is then added to the surviving spouse’s exemption amount, applicable at the time of their death. This provision allows married couples to more fully use their combined exemption amounts.

The special use valuation provision allows farmland to be taxed at its value under actual use, rather than its potential use, as long as the land will continue to be used in agriculture for the next 10 years. The

reduction in an estate’s value from the special use valuation provision was capped at $1.18 million in 2020.

Using the latest data from the 2019 Agricultural Resource Management Survey (ARMS) and actuarial tables that report the probability of death by age, USDA’s Economic Research Service (ERS) has provided detailed information on the application of federal estate taxes to agriculture on its Federal Estate Tax Topic Page.

ERS has estimated that approximately 31,000 principal farm operators died in 2020. Of those estates, an estimated 189 (0.6%) will be required to file an estate tax return, and only 50 (0.16%) will owe federal estate taxes.

Total federal estate tax liabilities from farm estates owing taxes were forecast to be $130.2 million in 2020 from a total estimated estate value of $56.3 billion. Total tax savings resulting from the special use valuation were predicted to be $20.7 million that year.

The share of farm estates required to file a tax return or owe taxes varies by farm size. ERS estimated that less than 0.05% of small family farm estates would owe federal estate taxes. Small family farms have gross cash farm income (GCFI) less than $350,000.

Of midsized and large farm estates – farms with GCFI between $350,000 and $5 million – an estimated 2% will owe federal estate taxes. Of very large farm estates, farms with GCFI over $5 million, about 8% will owe federal estate taxes.

USDA has announced the nationwide extension of several waivers that allow all children to continue to receive nutritious meals this summer when schools are out of session. The new provisions now will apply through Sept. 30. The waivers previously had been extended only through June 30.

USDA extended the waivers to provide assurances to local program operators about the summer months, when many children normally wouldn’t be able to access the school meals they depend on during the academic year.

According to U.S. Secretary of Agriculture Tom Vilsack, USDA is committed to providing local operators with the flexibilities and resources needed to continue offering the best meal service possible to children they serve.

The waivers allow for safe meal distribution sites that serve all children for free, regardless of income. Government estimates say up to 12 million children are living in households where they may not always have enough to eat. The summer meal program is designed to provide relief to many children in families hard-hit by the COVID-19 pandemic.

Summer meal sites may be located in a variety of settings such as schools, parks, community centers, libraries and churches.

The role of absent landlords – who live long distances from the land they rent out to farm operators – has captured the interest of policymakers and academics seeking to understand their role in farmland management and other aspects of local economies and resource management.

In response to a congressional request, researchers with USDA’s Economic Research Service (ERS) studied how longer-distance landlords affect the economic health of U.S. agricultural production.

A fundamental challenge of studying absent landlords is defining that group. Economists and other agricultural stakeholders do not have a specific definition for “absent landlord,” although some local studies refer to “out-of-state” landlords as absent landlords.

ERS considered two groups of absent landlords: those whose mailing address was more than 100 miles from their rented land and those residing more than 200 miles from their rented land. Data from 2014 was used as the base period. Among the study’s findings were these:

• There is greater prevalence of absent landlords in counties and states with lower rents and land values. At the same time, the study found no association between absent landlords and recent changes in rents or land values. The 2012-17 rate of gain in land values was relatively constant regardless of the prevalence of absent landlords.

• 83% of nonoperator landlords in 2014 lived within 200 miles of the parcels they rented out. The biggest part of that amount – 67% – was owned by landlords within 50 miles of their land.

• While some nonoperator landlords live in major U.S. coastal cities, most live in major cities in agricultural states and are more likely to be retired farm operators or descendants who inherited agricultural land, rather than investors from more distant parts of the country.

• Nonoperator landlords who lived farther away from their rented land tended to have larger holdings than those who lived nearby.

Grazing cattle are selective about where and which plants they will eat, an important factor for land managers to consider in deciding how to manage their herds, including how to prevent overgrazing for conserving biodiversity of the land.

With the primary goal of determining how factors like landscape topography and water availability affect cattle grazing distribution, USDA’s Agricultural Research Service (ARS) collected data from seven rangeland sites in Florida, Nebraska, New Mexico, Colorado and Idaho. Collars equipped with global positioning system (GPS) technology were used to measure cattle movement and activity.

One observation from these models is cattle prefer to graze low-lying locations in drier regions and more elevated locations in wetter regions, where flooding likely reduces selection.