Farms.com Home   Ag Industry News

Farmer co-ops and private grain operators at odds over tax law

Farmer co-ops and private grain operators at odds over tax law

Section 199A gives farmers a 20 percent deduction on payments for crop sales

By Diego Flammini
News Reporter
Farms.com

U.S. legislators are trying to find a solution that will satisfy both farmer-led and privately owned grain operators.

Section 199A of the Tax Cuts and Jobs Act of 2017 gives farmers a 20 percent tax deduction of gross sales if they market their crops to a cooperative.

But the same deduction doesn’t apply to privately owned grain companies.

Lawmakers are trying to find a suitable middle ground between both parties, but that’s proving to be difficult.

“What we found was … trying to get both of them to agree on final language has been a real challenge,” South Dakota Senator John Thune told reporters yesterday, according to Reuters.

And grain organizations are encouraging Congress to find a solution sooner than later.

The National Grain and Feed Association, which represents both cooperatives and privately owned grain companies, continues to wait for a resolution.

“All concerned are very cognizant of the adverse and unforeseen disruptions Section 199A already is having in the marketplace and the perverse impacts it is having on companies’ business decisions,” said Randy Gordon, the organization’s president, according to Reuters.

And the National Council of Farmer Cooperatives hopes an agreement can be reached that “maximizes farmers’ economic returns during these trying times in rural America while maintaining the competitive balance that existed before passage of the tax reform bill,” Council president Chuck Conner said in a statement.

Farmers have inquired about transferring their crops from private elevators to cooperatives, Reuters reports.


Trending Video

US “Flash Drought” Worst in 133-160 Years + Disease taking a Bite out of US 2025 Corn/Soybean Crops

Video: US “Flash Drought” Worst in 133-160 Years + Disease taking a Bite out of US 2025 Corn/Soybean Crops


A dry August and a “flash drought” in the ECB (Eastern Corn Belt) the driest top 10 to 15 years in 150 to 160 years (Ohio the driest in 133 years) plus disease is taking a bite out of the 2025 U.S. corn and soybean crops.
It's going to be an early harvest. This could be the start of the 89-year drought cycle that may have been delayed until 2026 as La Nina maybe returning.
The USDA September crop report is all about record corn ears and record soybean counts but the October USDA crop report will be about pod and ear weights.
Stats Canada reported higher forecasts for the 2025 Canadian Prairies all wheat and canola crops vs. last year based on satellite imagery but are they overestimating production?
The 2025 Great ON Yield Tour and Quebec crop tours are projecting corn and soybean crops below the 10-year average.
China's Vice Commerce Ministry Li Chenggang visits Washington this week as we continue to connect the dots is a positive sign towards a China/U.S. trade deal. But will U.S. farmers have a winter without China as they buy more soybeans from Uruguay/Argentina? U.S. Northern Plain soybean farmers are seeing red with flat prices at $8.97/bu!
U.S. corn exports on record pace up 99% vs. last year.
Fund short covering continues in corn futures bottom is in!