The year-end spending and tax legislation approved by Congress in the waning days of 2015 contained three crucial items that National Milk Producers Federation (NMPF) had been pushing Congress to include in the measure.
According to a statement released by the NMPF, all of the following items will help improve the economic conditions of the dairy industry in the New Year. They include:
· Resolution of the WTO Country-of-Origin Labeling case for beef and pork, which threatened to generate new tariffs on U.S. dairy products exported to Canada and Mexico unless portions of the U.S. law were repealed by the year-end package.
· A permanent extension of the Section 179 tax credit, which allows farmers and other small businesses to write off capital purchases immediately, instead of over time. The Section 179 provision will permanently allow a business to expense up to $500,000, up from a limit of $25,000.
· A five-year extension of the 50 percent bonus depreciation, which allows companies to lower the cost of capital for investment in qualified assets while increasing the cash flow for their businesses. The bill extends the bonus depreciation for property acquired and placed in service during 2015 through 2019.
In addition to these measures that were included in the $18 trillion spending and tax package signed into law on Dec. 18, 2015, a new multi-year highway transportation bill approved December 3rd contained an NMPF-backed measure to allow states to permit milk haulers to increase their truck weights beyond interstate highway system limits. This will allow milk trucks in some states to carry more product without being forced to offload portions of it at state borders. The truck provision, fought for by NMPF and its members, means fewer vehicles will be needed to transport milk, cutting costs for both farmers and consumers.
NMPF worked particularly hard on fixing the Country of Origin Labeling, or COOL, program. As the threat of higher tariffs on U.S. exports loomed larger, NMPF led dairy industry efforts in asking Congress to prevent the loss of millions dollars in exports to two of the U.S.'s leading markets.
Canada and Mexico were permitted by the World Trade Organization to retaliate against the U.S. because its meat labeling program was in violation of international trade rules. The repeal prevents new tariffs on U.S. dairy products at a time when global dairy markets are already depressed.
The two tax measures were especially beneficial in a year when farmers' profits have been squeezed by low milk prices.
'Making the Section 179 credit permanent is a very welcome outcome after several years of Congress enacting a series of short-term extensions of the credit,' NMPF president and CEO Jim Mulhern said in the release.
Left out of the year-end legislation were several other issues that NMPF was seeking, including a federal preemption of mandatory state GMO labeling laws; changes to child nutrition programs to ensure increased access to dairy products in schools; an enforcement ban on the Environmental Protection Agency's controversial Waters of the U.S. (WOTUS) rule; and a proposal creating a manure nutrient recovery tax credit.
Mulhern said NMPF will work with Congress in 2016 to address these and other measures important to dairy farmers.
Senate farm leaders have already pledged to work on the reauthorization of the child nutrition programs early in the year. Implementation of the WOTUS rule is suspended nationwide pending the outcome of a court challenge. Regardless, it is likely to face continued opposition in Congress.