Arkansas Agriculture Magazine - Fall 2017

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Arkansas Agriculture

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Arkansas Agriculture

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FEATURES Exotic Farm Animals Keith Sutton | Page 6

COLUMNS

Farm Bureau Perspective Randy Veach | Page 3

Policy Update Michelle Kitchens | Page 24

Agriculture News Harrison Pittman | Page 26

Rural Reflections

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ON THE COVER All manner of livestock is raised on Arkansas farms and ranches, including exotic animals like the American bison, water buffalo and alpacas pictured on the cover.

Photos by Keith Sutton and Byran Pistole

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FALL 2017

Edition 47

Farm Bureau Perspective

by Randy Veach | President, Arkansas Farm Bureau Federation

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Rice is something that must be allowed to be traded everal important trade agreements are on the proverbial through a renegotiated KORUS. The U.S. and Korea must find “table,” which is fitting, because agriculture and food compromise, and ensure we don’t lose the open markets for often are the centerpiece of trade agreements with other other commodities in the original agreement. countries.

Of course, Cuba remains a potential market opportunity Most talk centers on renegotiating the North American for U.S. farm products. Arkansas is in a good position because Free Trade Agreement (NAFTA), a critical agreement involving of our relative proximity and the commodities we raise the United States, Canada and Mexico. I’ve been fortunate to here almost all appeal to Cuban tastes. However, the Cuban serve as a “trusted adviser” in my role with the USDA/USTR government must change its approach to basic human rights Agricultural Trade Advisory Committee. I sat in on round and also ensure the safety of visiting U.S. government officials 1 of the negotiations in Washington, D.C. and took part in and citizens. Without these safeguards, any trade expansion conference calls before and after rounds 2-4. with Cuba will be extremely difficult.

Canada and Mexico are our largest trading partners. These You will also remember that President Trump stopped the neighbors are vital to U.S. farmers and ranchers. We agree Trans Pacific Partnership, that some changes need to be insistent that the U.S. was made with NAFTA, but we’re Canada and Mexico are our largest giving away too much as part hesitant to disrupt the flow of trading partners. These neighbors are of this 11-nation agreement.

U.S. farm products to Canada Since the U.S. pulled out of that and Mexico. There are needed vital to U.S. farmers and ranchers. agreement, others have jumped adjustments in some areas, We agree that some changes need to in, making direct bilateral no doubt, with dairy, timber, fruits, vegetables, poultry be made with NAFTA, but we’re hesitant trade agreements (country to country) with many of those and eggs all requiring some to disrupt the flow of U.S. farm products countries, meaning the U.S. is attention. possibly squeezed out of those One-third of Arkansas’ to Canada and Mexico. markets. We must get to work agricultural economy (the on our own bilateral agreements, since country-to-country deals state’s largest industry) depends on successful negotiation of are easier to negotiate than complex, multination agreements. trade agreements. This means U.S. trade issues are broader than The most critical component of trade agreements with just NAFTA. other countries isn’t the revenue it provides to U.S. farm There are meaningful discussions surrounding the South markets. More important is the nutrition our agricultural Korea-U.S. Free Trade Agreement (KORUS), first enacted in products provide to the people of other countries. In my role at 2012. U.S. exports of agricultural products to Korea were $6.2 Arkansas Farm Bureau, I’ve been blessed to travel to Mexico, billion in 2016, our fifth-largest agricultural export market.

Panama, China (twice), Cuba, South Korea, Japan, Belgium, Leading export categories include: beef products ($1.1 billion), Switzerland and Japan. I’ve seen the need for U.S. farm corn ($865 million), fresh fruit ($389 million), prepared food products in those countries. Many can’t raise enough food ($370 million) and pork products ($365 million). In addition, to feed their people. timber products are also a large market with South Korea.

Trade of U.S. farm products provides a two-way benefit, for Korean Trade Minister Kim Hyun-Chong said South U.S. farmers and ranchers who have broader markets to sell Korea would “consider all possibilities, including no deal their products to, and the citizens of the countries with which being reached” after agreeing to begin the process of we do business. I’ve always been proud to be a U.S. farmer, amending KORUS. He also reported “communicating in because our goal is the feed, clothe and shelter the world. no uncertain terms to the U.S. that demands for additional God bless you and your families. God bless our farmers openness in the agricultural sector are our ‘red line’ and and ranchers. And God bless Arkansas Farm Bureau. * something completely unacceptable.”

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An official publication of Arkansas Farm Bureau Federation distributed to more than 43,000 farming and ranching households in Arkansas.

SUBSCRIPTIONS

Included in membership dues ARKANSAS FARM BUREAU OFFICERS:

President • Randy Veach, Manila Vice President • Rich Hillman, Carlisle Secretary/Treasurer • Joe Christian, Jonesboro Executive Vice President • Warren Carter, Little Rock DIRECTORS:

Troy Buck, Alpine Jon Carroll, Moro Terry Dabbs, Stuttgart Sherry Felts, Joiner Mike Freeze, Little Rock Bruce Jackson, Lockesburg Tom Jones, Pottsville Gene Pharr, Lincoln Caleb Plyler, Hope Rusty Smith, Des Arc Leo Sutterfield, Mountain View (in memoriam) Joe Thrash, Houston Dan Wright, Waldron EX OFFICIO

Donna Bemis, Little Rock Chase Groves, Garland Peggy Miller, Lake Village Mark Morgan, Clarksville Executive Editor • Steve Eddington Editor • Rob Anderson Contributing Writers • Ken Moore, Keith Sutton ADVERTISING

Contact Tom Kennedy at Publishing Concepts for advertising rates tkennedy@pcipublishing.com (501) 221-9986 Fax (501) 225-3735 Arkansas Agriculture is published quarterly by the Arkansas Farm Bureau Federation 10720 Kanis Rd., Little Rock, AR 72211 POSTMASTER: Send address changes to Arkansas Agriculture, P.O. Box 31, Little Rock, AR 72203 Issue #47 Publisher assumes no responsibility for any errors or omissions. All rights reserved. Reproduction without permission is prohibited.

The Arkansas Farm Bureau Federation reserves the right to accept or reject all advertising requests.

Send comments to: arkansasagriculture@arfb.com

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Exotic Farm Animals

Livestock you didn’t know were being raised on Arkansas

by Keith Sutton

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attle. Hogs. Horses. Goats. Sheep. Donkeys.

Drive across Arkansas and you’re likely to see all these farm animals. In fact, these types of livestock are so common and familiar, most of us hardly notice them.

In some parts of the state, however, the strange farm animals you see might cause you to do a double-take.

Alpacas in Conway? Yes, indeed.

Bison in Marshall? They’re there.

A herd of water buffalo in Texarkana? Who would have thought it?

While most Arkansas ranchers raise the kinds of

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animals you might hear on Old McDonald’s farm, a few have become enamored with beasts more likely to be seen in South America, Asia or the American prairies. Some are hobbyists indulging an interest in the unusual. But for most, raising exotic farm animals is a full-time business from which they derive all or most of their income. The stories of how those businesses were founded and operate are fascinating.

Turkey Creek Water Buffalo Ranch In a state where 2 million cattle graze, water buffalo are

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as farms

These animals look like something you might see on the plains of Africa or in an Asian rice paddy. But these water buffalo actually are part of a 250-animal herd on Tom and Shannon Olson’s Turkey Creek Ranch near Texarkana.

Photo by Keith Sutton

an unusual sight. But on 600-acre Turkey Creek Ranch near Texarkana, Tom and Shannon Olson own 250 water buffalo, one of the largest, most significant herds in North America.

The Olsons established the first water buffalo dairy in North America and helped the growing water buffalo industry gain a foothold on this continent.

“Originally, we raised beef cattle,” Tom said. “But in the 1980s, we wanted to try something different. That’s when we met Tony Leonards, who was raising water buffalo in northwest Arkansas. He was the first person to bring water buffalo to the United States from Trinidad and Guam. We Arkansas

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bought our first two bulls from him in 1985 and enjoyed them so much, we later bought four pregnant heifers.”

Water buffalo originated in eastern Asia and were domesticated 5,000 years ago for use as meat, milk and draught animals. According to the United Nations’ Food and Agriculture Organization, there are now 184 million worldwide, including 174 million in Asia, 5 million in Egypt, 459,000 in Europe and 4.2 million in the Americas, including 6,000 water buffalo in the U.S. The Olson’s buffalo were a novelty at first, but as their herd grew, they sold a few and decided to try milking the

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Starting with two bulls purchased in 1985, Tom and Shannon Olson of Texarkana have developed one of the largest water buffalo operations in North America. The Olsons were the first to establish a water buffalo dairy on the continent, selling the milk to a Dallas Photo by Keith Sutton firm that made it into authentic mozzarella cheese. cows. Buffalo milk, which is lower in cholesterol and much higher in butterfat and protein than the milk of dairy cows, is the primary ingredient in authentic mozzarella cheese – mozzarella di bufala – which creates high demand for it.

“We went to a congress of the International Buffalo Federation to learn more about water buffalo, and everyone told us we didn’t have the right animals to milk in the United States,” Tom said. “We decided to try it anyway. And although selling the milk wasn’t easy at first, we found a market with a mozzarella cheese company in Dallas and sold milk to them for several years. Eventually, our heifers came in demand for the dairy industry, so we quit milking and focused on selling those. Now we butcher some animals and sell the meat to family and friends who want a leaner alternative to beef, but primarily we sell registered heifers for dairy breeding stock.”

When you see Tom and Shannon standing beside their buffalo, scratching heads and rubbing sides, you quickly see these animals are more than a business. The Olsons know each buffalo, its routines and mannerisms. Their daily interactions with the animals create a mutual affection one rarely sees with cattle.

“Their uniqueness is what really appeals to me,” Shannon said. “They’re very gentle, intelligent and beautiful animals quite different from cattle. They’re long-lived, too,

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up to 25 years. So it’s easy to grow attached to them.”

“We really like how the buffalo respond to you on a personal basis,” Tom added. “You give them a little bit, and they return it fivefold.”

Sweet Clover Alpaca Farm Debbie Shannon works as a lab technician at Conway Regional Hospital. But since 2008, she’s had a second occupation, too – raising alpacas on two acres in Faulkner County.

“My sister prompted my interest in alpacas,” she said.

“She went to the Indiana State Fair around 2002 and saw them displayed there. She told me about them and suggested I think about getting some. At the time, however, even cheap alpacas cost $30,000 each. So while I was interested, I waited and bought my first alpacas in 2008.”

Alpacas are native to South America’s Andes Mountains where they were domesticated more than 5,000 years ago.

They are whimsical-looking animals with long legs and necks, big eyes, luxurious fur and two-toed feet. They often are confused with llamas, to which they are related.

But llamas often weigh twice the alpaca’s typical 100-200 pounds. And llamas are primarily used as pack animals.

Alpacas are raised for their cashmere-like fleece, which can be made into clothing, blankets and other textile products.

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“I raise breeding, production and show animals,” said Shannon, who presently has 12 alpacas with names like Zorro, Exquisite Bling and Mayday. “I keep my boys and girls separate until ready to breed them, and breeding is always planned – a specific boy with a specific girl – to produce the best animals.

“Many people want to buy alpacas for pets,” she continued. “But I don’t recommend that. Alpacas are very intelligent. They know the person who feeds them every day, but they’re not generally friendly or pettable and require special care. They’re also social creatures.

You can’t raise just one. You need at least three for them to thrive.”

Shannon’s alpacas are sheared once yearly to collect the fleece, which is recognized for its fineness, softness, light weight, durability, luster and excellent thermal and water-wicking qualities. Each animal typically produces 20-50 ounces of first-quality fiber and 50-100 ounces of second- and third-quality fiber.

“The fleece can be processed immediately after shearing, because it doesn’t have lanolin like sheep’s wool,” Shannon said. “I spin it into yarn using a spinning wheel I purchased and learned to use. Then I send the yarn to my aunt in Pennsylvania who is a magnificent knitter. She sends me back hats, mitts, scarves, shawls and other products I sell.”

For Shannon, this is all a labor of love.

“I love my alpacas,” she said. “They’re incredible animals, and working with them is great fun. I’ll always be glad I have them.”

Debbie Shannon’s Conway farm covers only two acres, but that’s plenty of room for the 12 alpacas she has there. She raises breeding, production and show animals, and sells clothing and other textile products made from the alpacas’ cashmere-like fleece. (sweetcloveralpaca.com) Photo by Keith Sutton

Drivers passing Debbie Shannon’s Faulkner County farm often stop for a better look when they see her unusual-looking alpacas. Alpacas resemble llamas, to which they are related.

Photo by Keith Sutton

Debbie Shannon shows a “batt” of alpaca fleece ready to be turned into yarn on a spinning wheel. Alpacas produce fleece in 22 officially recognized colors, ranging from solid black to solid white, and including subtle shades of browns and grays.

Photo by Keith Sutton

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L.C. Ratchford with one of his big bison bulls. The meat is flavorful and low in fat.

His bison products are available in 375 stores in Arkansas, Missouri and Oklahoma.

Photo by Bryan Pistole

Ratchford’s Buffalo Farm L.C. Ratchford, the youngest of six children, grew up on his family’s farm near Marshall. His great-grandfather drove a herd of cattle from Georgia and settled in Searcy County more than 150 years ago. L.C. lived on the farm established by his parents in the early 1950s where they raised cattle, pigs, strawberries, tomatoes and other commodities.

L.C. always knew he wanted to farm full time. But after watching a Public Broadcasting Service television special on the American bison when he was a child, he wanted more than anything to raise some of those massive, shaggy beasts of the Great Plains.

“After seeing that TV show, I was hooked,” he said. “I didn’t make plans to have buffalo for several years after that, but it was something I knew I wanted to do.”

To boost his income, L.C. learned welding. “I knew as a welder I could make enough money to pursue my dreams of being a full-time farmer,” he said. “So that’s what I did. After my father died and I took over day-to-day operations of the farm, I took my welding money and bought more land to increase the farm’s size. And I used my welding skills to start building the 8-foot-tall steel holding facilities and corrals I knew were needed for buffalo. Then 17 years ago, when everything was ready, I

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bought a bull, two cows and two calves. And my dream of raising buffalo finally became reality.”

Cattle are still part of the Ratchford family business, which L.C. runs with help from his brother, two sisters and their 92-year-old mother, Madge. They have 100 head on their 500acre ranch. But as L.C. envisioned, buffalo are now the focal point of their operations.

“We have 50,” said L.C. “Twenty-five are breeding animals, and the rest will be processed for the meat we sell, including a full variety of USDA-inspected steaks, tenderloin, roasts, stew meat and ground meat, and a popular line of jerky and snack sticks made not only with buffalo, but wild boar, elk and venison, too.”

Success didn’t come without hard work. “I had to develop my own markets going from one store to the next making sales,” L.C. said. “That paid off, though, as our products are now available in 375 stores throughout Arkansas and parts of Missouri and Oklahoma.

“You could say I’m living the dream,” he continued. “People talk about this country and all of its problems, all the things that are bad. They talk about Arkansas being a depressed economy.

But I was able to build a thriving business through hard work and tenacity. I built it, because I had a dream. And that shows that in this country, it’s still possible to live the American dream.” *

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One might expect to see a herd of bison out West or on the Great Plains. But these iconic mammals seem out of place on the Ozark Mountains farm where L.C. Ratchford and his family raise them. (On Facebook: Ratchfor Buffalo Farms)

Photo by Bryan Pistole

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Policy Update

A Taxing Process

by Michelle Kitchens

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oth federal and state elected officials are delving into the tax code, the latest effort to revise tax laws.

In Washington, D.C., Congress is attempting a significant overall of federal tax treatments. In September, House and Senate leadership released the “Unified Framework for Fixing our Broken Tax Code.” The so-called framework is unlikely to be the final product, but it includes a reduction of the corporate tax rate by 15 percent and caps the rate at 25 percent for businesses organized as pass-through entities. More than 94 percent of farms pay taxes as pass-through businesses. To offset the lost revenue from reducing tax rates, the proposal calls for the elimination of many itemized deductions. The proposal simplifies the tax code by reducing the number of tax brackets and would allow farmers to write off business investments over five years, including fixed assets such as buildings and machinery, but not land.

The framework also includes the permanent repeal of the federal estate tax (the so-called Death Tax), which agriculture has sought for years. Perhaps the most difficult part of any attempts at federal reform, is the country’s mounting debt – more than $20 trillion or about $60,000 for every living American. The White House is adamant that any tax reform package be revenue neutral. The tax debate in Congress will need to focus on spending cuts, as well as tax cuts if the U.S. ever hopes to conquer its debt. Passage of legislation is not imminent. It will take months to draft legislation and with so many stakeholders involved, it will be a laborious and time intensive task.

In Arkansas, the Legislative Tax Reform and Relief Task Force created by Act 78 of 2017 and comprised of 16 legislators is reviewing the state tax code. Its initial report is due Dec. 1 and the final report by Sept. 1, 2018.

The group recently hired Philadelphia-based PFM Group Consulting to help analyze and make recommendations for improving the state’s tax code. The task force will evaluate income tax rates (both individual and corporate), our tax treatments that spur or hinder job growth, and sales tax rates. Internet sales tax and property taxes will be discussed, too.

One idea discussed by task force members is the possibility of broadening the base for sales tax application by eliminating certain sales tax exemptions. This approach would allow the legislature to possibly lower the overall sales tax rate or lower income taxes. Agriculture benefits approximately $300 million annually from sales tax exemptions. This figure includes exemptions for integrators, processors and retail consumers. While not all agriculture exemptions benefit farmers directly, they do boost that

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sector. In 2012, we estimated that exemptions accounted for as much as 15 percent of farm income – an important component in farm profitability. The exempt status for agricultural input items keeps Arkansas farmers and ranchers competitive with counterparts in other states, globally and with other industries whose raw materials are tax exempt. The nature of farming and ranching prevents agriculture from leaving the state for better tax environments but leakage across state lines is a reality. While use tax is still technically owed on those items purchased across state lines, collection of use tax is spotty at best.

The importance of these exemptions and their role in maintaining a vibrant agricultural economy in Arkansas cannot be stressed enough. Removal of the existing exemptions would do harm to the state’s agricultural sector, which represents roughly 20 percent of Arkansas’ gross state product.

Farm Bureau’s role in any tax reform is to advocate for the best outcomes for agriculture. The organization will assist legislators by lending our expertise on how any changes might impact the industry. Tax reform is a complicated business and Farm Bureau applauds lawmakers’ efforts to improve tax law. We’ll be there every step of the way to ensure agriculture is well represented. *

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Agriculture News

Ag Law Update

by Harrison Pittman It’s farm bill time again Most provisions of the Agricultural Act of 2014, commonly referred to as the 2014 farm bill, are set to expire in 2018. Consequently, Congress must enact a new farm bill. Many hope this can be accomplished in 2018, before the present farm bill expires. It’s possible, but it will be a difficult process that could look a lot like the bumpy legislative ride the agriculture industry has had with the past two farm bills. Regardless of the outcome, the stakes for Arkansas’ economy and its agriculture industry are high, because the next farm bill will determine the future of the farm safety net for commodity crops, how the cotton sector will be treated over next few years and potentially, significant changes to federal crop insurance and conservation programs. All of this must be accomplished in an extremely difficult funding environment.

Dicamba In October 2017, the U.S. Environmental Protection Agency reached an agreement with DuPont, Monsanto and BASF to make dicamba a restricted-use pesticide.

This is one of many developments regarding dicamba.

Additionally, a number of lawsuits have been filed – one against the Arkansas State Plant Board and others against one or more manufacturers of dicamba. And all of this is occurring while the Arkansas State Plant Board is considering whether to institute a ban on dicamba for the 2018 crop year. This issue appears to be far from finished but certainly carries huge implications for Arkansas’ ag industry.

CAFO reporting Another issue to watch is whether farm owners and operators will have to begin reporting releases of hazardous substances from animal waste under two federal laws. These two laws, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and Emergency Planning and Community Right-to-Know Act (EPCRA) mandate facilities to report certain releases of hazardous substances occurring within a 24-hour period. When such a release happens, the facility owner or operator must notify federal, state and local authorities. Since December 2008, most farms have been exempt from the reporting requirements imposed by CERCLA and EPCRA. This exemption was challenged in court, and the court removed the exemption in April 2017. The litigation and regulatory process is still playing out on this issue, but it’s one to watch in the weeks ahead.

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Cutline: Harrison M. Pittman is director of the National Agricultural Law Center and an active member of the American Agricultural Law Association (AALA), the nation’s only professional organization focused on the legal needs of the agricultural community. He received the AALA’s Excellence in Agricultural Law Award in 2010. Pittman will provide regular updates on critical legal issues for the Arkansas agriculture industry.

Photo by Keith Sutton

Sounds funny, but …?

As funny as it may sound, several environmental groups filed suit in U.S. District Court in Colorado, alleging that the Colorado River “is capable of possessing rights similar to a person, including rights to exist, flourish, regenerate and naturally evolve.” The groups are arguing that ecosystems such as the Colorado River should have a right to bring a lawsuit to sue for their own protections. While the legal action may not survive, it goes to show the lengths some will go to test legal theories in court.

To learn more about these and other issues, be sure to visit the center’s website at www.nationalaglawcenter.org.

The National Agricultural Law Center at the University of Arkansas System Division of Agriculture serves as the nation’s leading source of agricultural and food law research and information. The center deals with legal issues around the country that impact agriculture at the state and federal levels. *

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RuralReflections

Photographer Keith Sutton took this photo of rice being harvested near Stuttgart. Arkansas is the No. 1 rice-producing state in the country.

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PRESORTED STANDARD U.S. POSTAGE PAID LITTLE ROCK, AR PERMIT NO. 1884