" I heard it through the AgLine"

October 6, 2011

 

 

·       Kansas farmer outwits the IRS

·       Monsanto shrugs off SEC probe

·       Skin makes cantaloupes ‘risky’

·       New spud competes with the big boys

·       ‘Furious Five’ foods for cancer patients

 

 

Kansas farmer outwits the IRS

 

(Forbes.com) – Sometimes, the IRS claims what you’re doing is all about tax benefits so you shouldn’t get them.  Sometimes the U.S. Tax Court agrees.  Sometimes, though, taxpayers insist they’re right and won’t give up.  That’s what happened in Milo and Sharlyn Shellito v. Commissioner.

 

Tax Seed is Planted. The Shellitos are Kansas farmers who raise cattle, grow wheat, corn and soybeans.  Coincidence or not, they also grow milo—a type of sorghum I now think of as Milo Shellito’s namesake crop.  The Shellitos’ accountant told them about a great way to get tax benefits.

 

Sharilyn should become Milo’s employee, he advised.  Since they had large medical expenses, Milo could adopt a medical expense reimbursement plan so his wife Sharilyn’s medical expenses were paid by her “employer.”  The Shellitos did it, scrupulously kept track of expenses, filed all required tax withholdings and more.  Sherilyn’s medical expenses were paid and deducted by Milo, but were not income to Sharilyn.

 

This was pretty slick, but not to the IRS.  Sharilyn wasn’t really her husband’s employee, the IRS said.  The Tax Court agreed–even though the Shellitos signed contracts and made it all official.  This was all form over substance, said the court.

 

Undeterred, the Shellitos appealed to the Tenth Circuit Court of Appeals.  Appellate tax cases can be tough, and they had to show the Tax Court’s factual findings were clearly erroneous.  Could they do that here?  You bet.

 

There really was an employer-employee relationship here, the appeals court ruled.  The Shellitos “crossed all of the T’s and dotted all of the I’s,” the court said.  The Tenth Circuit wasn’t too happy with the IRS, which seemed to argue whatever it had to argue to trip up this farming couple.  The appellate court clearly didn’t like that one bit.

 

It’s nice to see the little guy win.  Still, be careful.  In the inevitable quest for ways to lawfully reduce tax bills, it’s no wonder Americans sometimes fall prey to tax deals that seem too good to be true.  Look at Wesley Snipes.  See Appeals Court Denies New Tax Trial For Wesley Snipes.  Tax law is  complex and shelters are defined to include any plan or arrangement having a significant purpose of avoiding or evading federal income tax.  But the fact that something is tax efficient doesn’t make it a shelter.

 

And sometimes, if you plant it, it will grow.

 

Return to Top

 

 

Monsanto shrugs off SEC probe

 

(Forbes.com) – Monsanto, one of the world’s largest seeds and agricultural products maker, posted fourth quarter earnings before the bell on Wednesday, beating Wall Street’s expectations and capping off a solid year, despite registering a loss.

 

Fourth quarter net loss for Monsanto totaled $112 million, or 21 cents per share.  Adjusted EPS came in at a loss of 22 cents per share, less than the 27 cents forecast by Wall Street analysts.

 

Revenue hit $2.25 billion for the company, driven by Latin American demand, particularly from Brazil and Argentina, which showed momentum and continued growth potential.  The company’s seeds and genomics division, its largest by far, saw revenues climb 39% to $1.4 billion.  Monsanto’s fourth quarter sales widely beat expectations of $1.9 billion.

 

The company’s full year results highlight its strength.  Revenues hit $11.82 billion, taking net income to $1.6 billion.  Despite a loss in the fourth quarter, full-year diluted EPS came in at $2.96.

 

Hugh Grant, Monsanto’s president and CEO, noted:

 

“As we bring this year to a very successful close and look at what’s to come, it’s clear that we have turned a corner and returned to growth mode.  We made a conscious effort to reconnect with our customers, and from that earned significant sales growth for seeds and traits and created positive momentum we carry into 2012.  Through the combination of advanced product platforms, a more balanced business and increasingly global opportunities, I believe we have the essential elements in place to achieve mid-teens growth in fiscal year 2012.

 

The company’s earnings were clouded by an ongoing investigation into incentive programs used in relation to their Roundup Herbicide product by the Securities and Exchange Commission (SEC).  Roundup was one of Monsanto’s strongest products, until it faced intense competition from generic brands, particularly from China.

 

Monsanto will be forced to restate earnings from the fourth quarter of 2009 to the third quarter of 2011.  Total revenues and costs will remain the same for the whole period, but timing and distribution would be corrected, the company explained.

 

In 2012, the company expects midteens earnings growth, putting EPS in the range of $3.34 to $3.44, compared with 2011’s EPS of $2.96.  Structural changes to earnings patterns, as Latin America delivers more growth, will change first quarter earnings, which are generally weak, as Brazil and Argentina’s share increases; EPS is now expected in the 10 to 15 cent range for the first quarter.

 

Shares in Monsanto rallied strongly in response to the earnings, indicating investors were pleased with the results.  By 11:19 AM in New York, the stock was up $2.10 or 3.34% to $65.05.

 

Return to Top

 

 

Skin makes cantaloupes ‘risky’

 

(USA Today) – Not all fruits are created equal. And that's proving to be a point of contention in the wake of the outbreak of listeriosis linked to cantaloupe from Jensen Farms in Colorado. Fifteen people have died from listeriosis, an infection brought on by the listeria bacteria.

 

Few outbreaks have been linked to produce. Hot dogs, deli meats and soft cheese are the usual culprits. The meat industry did a major revamp of its methods, and now outbreaks are down, but they seem to be climbing in produce.

 

It's well-known that rough-skinned cantaloupes "are inherently riskier" than a melon like a honeydew that has a smooth skin, says Jim Prevor, whose online column, The Perishable Pundit, is widely read in the industry.

 

That's probably something of a surprise to most Americans, who generally see cantaloupes as the quintessential healthy breakfast fruit.

 

"There are lots of places for bacteria to bind on the surface. It's like a mountain range under the microscope," says Doug Powell, a professor of food safety at Kansas State University in Manhattan. But there's not much consumers can do. If the listeria is on the rind, when you cut it open, "it's going to cross-contaminate."

 

Cantaloupe growers, packers and sellers are not unanimous in deciding the best way to reduce the risk of listeria contamination on cantaloupes.

 

About 85% of cantaloupes grown in the USA come from California and Arizona's arid high deserts, where they're watered using drip irrigation, which keeps them relatively clean. That means they don't need to be washed before being shipped, which experts say cuts down on the possibility of one contaminated melon tainting a whole vat of them as they're being washed.

 

The other 15% are grown in the South, where rain is more likely to splatter them with mud and make them impossible to sell without washing. In the winter season, November through April, cantaloupes come from Mexico and Central America, where they're also more likely to get wet.

 

Bringing cantaloupes into a packing shed, where they touch surfaces that have touched other melons and may be dunked in a tank of water to clean them, "has every opportunity to reduce risk but equal or greater opportunity to contaminate," says Trevor Suslow, a food-safety expert at the University of California-Davis who has done extensive research on cantaloupes.

 

Washing "is certainly a good practice, but you need to do that in an area that you won't introduce contamination" into other melons.

 

Listeria is an especially problematic bacteria because it exists in the environment, in dirt and animals; once a colony starts growing on processing equipment, it can form biofilms that are difficult to remove. "They hide in the nooks and crannies," Suslow says. "You've got to go in with steam and stronger chemicals" to get rid of them.

Washing may not be the only answer.

 

Craig Wilson, Costco's food-safety director, says his company does require sellers to wash their cantaloupes, but what he's moving toward "in the very near future" is a test-and-hold program. Growers and packers who want to sell him melons will need to test them for a broad range of potential pathogens such as "E. coli, salmonella, listeria" and not ship to him until the results come back negative, a process that takes eight to 48 hours.

 

"This not a bad industry, it's a good industry," Wilson says. "The cantaloupe folks are great, we just need to work together to get beyond this."

 

Return to Top

 

 

New spud competes with the big boys

 

(GrandForksHerald.com) FARGO - Will a newly discovered russet potato variety make the Red River Valley a yield contender with the vaunted Pacific Northwest?

 

Carl Hoverson of Larimore, N.D., thinks so. As one of the key growers for the J. R. Simplot Co. potato processing plant in Grand Forks, he should know.

 

Hoverson Farms hosts test plots that include trials by Asunta “Susie” Thompson, a potato breeder at North Dakota State University in Fargo. This year, one of Thompson’s new crosses, a variety called 4405-1 Russet, had an incredible yield of 777 hundredweights per acre. That's more than twice the average yield of russets in the state the past decade, according to U.S. Department of Agriculture statistics. Most russets in the state are raised under irrigation for the French fry market.

 

Hoverson was so impressed he put out his own press release.

 

“There were about nine very nice, uniformly shaped (potatoes under each hill) with light russeting tubers under each plant,” Hoverson says.

 

Each of the potatoes weighed about a pound.

 

The big news was that the clone was planted late, on May 24. Still, it bulked up by the harvest date of Sept. 17. Other Russet Burbank varieties in the same row were yielding 300 bags.

 

Hoverson says the selection has to go through many tests for processing quality, including solids, but the signs look good.

 

“It typically takes 400 (per hundredweight) of potatoes per acre on irrigation in North Dakota and Minnesota to cover input costs, so this would be great news for our potato farmers,” Hoverson says.

 

“If this variety does all of the qualities the processing industry wants,” it will rival the major potato producing areas of the Pacific Northwest, Hoverson says. The Red River Valley could again become the major supplier of potatoes in the United States and world markets, he says.

 

“Lower costs per acre combined with impressive yields will make the Red River Valley a powerhouse in potato production,” he said.

 

The Northern Plains Potato Growers Association thanked Thompson and her crew at NDSU for a “job well done.”

 

“It’s very early of course in that clone stage, but we do have other beautiful dual-purpose russets in our pipeline,” Thompson says. “In fact, one hopefully to be released this fall or winter that has excellent yield potential.”

 

She says one in trials at Inkster, N.D., and harvested Sept. 26 had a yield of 522 hundredweights per acre on a short dry season. It was planted on June 2.

 

Hoverson says he has already decided to invest several thousand dollars in the breeding effort.

 

Return to Top

 

 

‘Furious Five’ foods for cancer patients

 

(ArkLaTex.com) – In a new approach to illness and diet, cancer fighters are now advising their patients that certain foods can be life-savers.

 

Carolyn Katzin, a nutritionist at the Beverly Hills Cancer Center, has advised her patients to chow down on what she called the "furious five" of fighting cancer, common foods with uncommon abilities.

 

These included water cress, walnuts, avocado, guava juice and lots of berries.

 

The Center tries to be an "anti-hospital" where patients not only get treatment from state of the art equipment, but also massages in a hotel-like setting.

 

Katzin called water cress "a super, super food."

 

"It has twice the calcium of milk, twice the iron of spinach, and it is richer in folic acid, vitamins A, C, E and B6," she said.

 

The berries are particularly protective according to Katzin who said it's their dark blue coloring that holds free-radicals at bay.

 

The foods are both cancer-fighters and cancer preventers.

 

"The good thing about foods is you can't overdose on these foods," she said.

 

She is not opposed to vitamins and supplements, but she also tells patients what Hippocrates said so long ago: "Let food be your medicine and medicine be your food."

 

Return to Top

 

                                          

End Transmission