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

Feb 09, 2018

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.

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.