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MORE ON CO-OPS' NEW TAX ADVANTAGE
Agri-Pulse reports:

The issue was very much on the minds of companies and producers attending this week's annual meeting of the International Dairy Foods Association in Palm Desert, Calif.
One co-op leader at the meeting told Agri-Pulse he has urged lawmakers in Washington to preserve as much of the benefit as possible. Mark Berning, a Minnesota dairy farmer who is on the board of Land O'Lakes, said the 199A benefit was only fair since corporations saw their tax rate slashed from 35 percent to 21 percent under the new law.

"You look at the total dollars involved in what they get for a tax deduction compared to us, they still win," Berning said.

Jim Mulhern, the president and CEO of the National Milk Producers Federation, expressed optimism that a deal could be reached. "Right now, it's a very fluid situation trying to figure out how to do a fix here." Still, he said, the issue "has to be addressed because of the inequity created."

A senior member of the Senate Finance Committee, Chuck Grassley of Iowa, also predicted yesterday that the 199A provision would be changed. "If Congress knew it at the time, it wouldn't have gone through. So, it's got to be corrected," he told reporters.

A major retailer that processes milk, the Kroger Co., also is concerned about the deduction, even though the company currently buys milk primarily from co-ops. "Tax law needs to be business-choice neutral, and this isn't, and that's unfortunate," said Mike Brown, director of Kroger's supply chain.


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