As Oklahoma’s severe drought continues, many farmers and ranchers are faced with tough business decisions, especially when it comes to selling off livestock earlier than anticipated.
With the withering forage growth and high cost of purchasing and transporting supplemental feed and forage, livestock sale barns around the state and country have seen exponential growth this year in sales numbers as producers are forced to sell some – if not all – of their herd.
Oklahoma State University assistant professor and agriculture and food policy specialist Amy Hagerman advises producers to consider potential tax implications of these and other weather-related business decisions.
“As producers make a myriad of decisions on their operation in response to the drought, it is important to think about the long term as well as the short term,” Hagerman said. “Now is a good time to think about where you want to take your operation in the future. This includes making near-term investments in the operation like a pond clean-out or digging a new pond, but it also includes long-term decisions like how many head to carry forward and what type of genetics to bring in for replacements.”
Hagerman said these decisions can have tax implications beyond the 2023 filing season and encourages producers to visit with their tax professionals early.
Below is a tax resource for producers written by J.C. Hobbs, OSU associate extension specialist, detailing many hypothetical situations and the tax implications of each.
OSU Extension provides an extensive selection of fact sheets on tax information and other agricultural topics. Click here to view an alphabetical list of fact sheet topics.Tax Implications