Helping farmers unlock and utilize hidden deductions
Today’s farmer still battles the whims of Mother Nature to plow, plant and harvest a crop. and there has always been the challenge of the commodity market and trying to do more with less, as input costs keep skyrocketing. The agricultural economy continues to be tested even further by each of these factors, more so today than ever.
Working to help farmers understand those risks and navigate the problems off the turnrow is something Cam Smith, CEO of Southern Ag Services and Alliance Risk Management, focuses on every day.
“We manage risks across the entire pre-plant, production, and post-harvest cycles of each crop on each farm. We do this through science-based services and proven financial strategies,” says Smith. “Our services are unbiased. We are not making money from selling products. We are being paid to generate a return on growers’ investments with science-based solutions we have uncovered through our research, recommendations, extensive in-field experience, and community data.
Working closely with growers and landowners, Smith understands the extreme situation facing farmers on every level.
“It’s been pretty tough for the farmers for quite a few years now. Every year throws us more surprises,” says Smith. “What we have seen is that downward trend of value, the high cost of doing business, the low commodity pricing, and the marginal subsidies. And, we have not had a new Farm Bill despite partial relief from the 2025 One Big Beautiful Act. With us being one step away from the farm, we feel the pressure just like they do.”
Smith understands that cutting costs can only happen for so long before farmers have nothing left to cut.
“When guys start trying to cut rates and/or just get by, the high yields and high returns that Southern Ag growers have gotten used to will begin to fall off. As it relates to managing fertility: soil sampling, prescriptive planting, or precision applications with variable rate technology, we have really drawn a line in the sand and says, ‘Look, you can only not do that for so long before you start going back to a place where you were before you employed our services—and we don’t want you to do that.’ You do not want to do that. The money that you can make needs to be maximized right now. That has been a hard conversation because our customers are typically still making better-than-average yields because they have been on our program. Those yields and returns require annual detailed focus and effort. A slip up here and a cut back there puts us back to having to spend money to try to catch up and get the health and production capacity of the land back.”
Smith notes that in addition to managing for positive ROI through production, there could also be tax deductions associated with new property purchases. Southern Ag’s CFO Blake Barksdale has worked to understand existing tax codes that have provisions for the depreciable values associated with nutrients and other factors of production.
“As CFO, I’ve extensively reviewed the relevant tax provisions,” says Barksdale. “This ensures our NEV (Nutrient Excess Value) program provides growers with robust, science-backed data for unlocking these hidden tax benefits, potentially saving thousands per acre. I always recommend that growers consult their own tax advisors for personalized application. The NEW program is a method to unlock hidden deductions that we help growers capture through a combination of soil sampling, soil analytics, nutrient value calculations, and then yield. In normal terms, we take ground that somebody buys, we see what amount of various nutrients required for production are out there, and then we compare that back to what is required or removed over time by traditional crops in a typical row crop rotation. Then we start to assign financial values to the excess. This excess value can be deducted in a landowner’s tax filings. There are multiple tax codes that have a potential impact, and people have heard of Section 180 or Section 167, but we don’t focus on one particular tax code. We look at the overall tax potential, and we look at the rules that define what can be deducted.”
“Typically, land was just a non-depreciable capital asset, but as times have gotten tighter people have looked harder at the tax codes that have provisions which unlock these available deductions,” says Smith. “An accountant and a typical farmer are not going to be able to just look at what they’ve been doing or think about numbers and come up with a depreciable value. It has to be the science behind the soil sampling. There’s the soil fertility, the crop rotation, and a lot of other moving parts that go into the calculations.”
It’s all tied to agronomic production and the nutrient requirements and all the soil components that Southern Ag uses in our advanced fertility approach. So, it’s really been a hand-in-glove service for us. Growers who purchase land, or anyone actively engaged in farming who files a Schedule F, can qualify. You need to enroll within the first year of when you purchase the property. And you can do an amended return for up to three years after that purchase,” he says.
Harrison Hawkins, an Agronomist with Southern Ag, details the work being done to benefit the farmer. “Southern Ag evaluates the residual soil fertility obtained through a purchased tract of land. Drawing on extensive agronomic research, peer-reviewed literature, and our proprietary datasets, we establish precise crop nutrient requirements tailored to regional conditions and rotations,” says Hawkins. “This is a sophisticated, multi-layered process that demands expertise. We geospatially map the entire tract, conduct comprehensive soil sampling, often on a grid or zone basis, and rigorously analyze the results against our established nutrient benchmarks. For example, if soil tests average eighty pounds of phosphorus per acre and our data shows a soybean crop typically requires fifty pounds per acre, that thirty-pound delta represents verifiable excess we can value at fair market commodity prices. We evaluate multiple macro- and micronutrients in this way when determining NEV. Last year, on average, we helped landowners capture an $1,800 per acre deduction, a significant advantage in today’s challenging agricultural economy. For any producer, grower, or investor, this expert-driven analysis is essential when considering a land purchase.”
“It’s a very interesting way for a grower to maximize their overall return per acre,” says Smith. “Essentially, it allows you to recover value for the excess nutrients the previous owner applied, nutrients that were already factored into the purchase price you paid. For this service, our CFO plays a key role. When a grower or entity approaches us about an upcoming land purchase, we coordinate closely from the start. Once the transaction closes, we conduct thorough soil sampling, perform detailed pre-analysis and post-analysis, prepare a comprehensive summary report with clear nutrient valuations, and then work hand-in-hand with your accountant to ensure the data is ready for your tax filing.