2010 OSU Income Tax Schools to be held across Ohio this Fall

OSU Extension  and The Ohio State University’s Department of Agricultural, Environmental, and Development Economics Department are pleased to be offering eight OSU Income Tax Schools across Ohio from November 9 through December 10. These two-day schools are designed for individuals who have some experience preparing and filing federal and state tax returns for individuals and small businesses. Instruction will focus on federal tax law changes and on the issues that tax preparers may encounter in 2010 preparing tax returns. The schools also will include an Ohio income tax update.

Participants in the Tax Schools will receive the 2011 RIA Federal Tax Handbook and the 2010 National Income Tax Workbook (including a searchable CD containing the 2004-2010 workbook) prepared by the Land Grant University Tax Education Foundation especially for the income tax schools held in Ohio and 30 other states. The National Income Tax Workbook is available only as a part of the tax school registration.  Highly qualified instructors will explain and interpret tax regulations and recent changes in tax laws at these schools. Continuing education credit for Accountants, Enrolled Agents, Attorneys, and Certified Financial Planners will be offered.

The tax school locations are as follows:

Kent – November 9-10
Kent State University Student Center
Summit Street
Kent, OH 44242

Columbus – November 15-16
Bridgewater Banquet & Conference Center
10561 Sawmill Parkway
Powell, OH 43065

Fremont – November 17-18
Ole Zim’s Wagonshed
1375 State Route 590
Gibsonburg, Ohio 43431

Dayton – November 22-23
Presidential Banquet Center, Dayton
4548 Presidential Way
Dayton, OH  45429

Ashland – November 30-December 1
Convocation Center, Ashland University
820 Claremont Ave.
Ashland, OH 44805

Chillicothe – December 2-3
Ross County Service Center
475 Western Avenue
Chillicothe, OH 45601

Lima – December 7-8
Veterans’ Memorial Civic and Convention Center
7 Towne Square
Lima, OH  45801

Zanesville – December 9-10
Ohio University-Zanesville Branch Campus Center
1425 Newark Road
Zanesville, OH 43701

The pre-registration fee for each workshop is $350.  The fee includes all materials, lunches, and refreshments. The first day program begins at 9:00 a.m. and adjourns at 5:00 p.m.; the second day resumes at 8:30 a.m. and concludes at 4:00 p.m. 

In addition, a 2 hour Ethics session will be offered at three of the tax school locations (Kent, Columbus, & Lima) during the first evening of these three schools from 5:15-7:15 p.m.  The registration fee for the ethics workshop is $60 per person.  The workshop locations are:

Kent – November 9
Columbus – November 15
Lima – December 7

Complete workshop information for the 8 OSU Income Tax Schools and the 3 Ethics workshops can be found at http://incometaxschools.osu.edu.  A downloadable registration form as well as on-line registration is available at this location.   Information can also be received by contacting Dr. Warren Lee, Ohio Income Tax Schools Coordinator, at 614-292-6308 or lee.69@osu.edu

Adoption and Use of Precision Farming Technology in Ohio: Results from the 2010 Ohio Farming Practices Survey

Precision farming has been rapidly adopted by Ohio farmers since the first tools were introduced two decades ago. The “2010 Ohio Farming Practices Survey” was conducted earlier this year to determine the current level of adoption of precision farming technology in Ohio and to assess farmers’ perceptions of the costs and benefits of their adopted precision farming system. As second research question addressed farmers’ management of precision farming information and data to identify further opportunities to advance the use of this technology in the state.

The survey was mailed to a randomly selected sample of 3,000 farmers in Ohio. We restricted the sample to farmers generating more than $50,000 in annual farm sales and stratified across sales categories to guarantee sufficient representation of larger farms. Sample addresses were drawn from all 88 Ohio counties. We applied a weighting procedure based on farm sales categories in the calculation of all statistics to return estimates to a sample representative of Ohio farmers. A total of 1,401 surveys were returned of which 1,163 had sufficient responses to enter our analysis. The effective response rate was 40.4%.

We found that 38.8% of all surveyed farmers had adopted at least one precision farming component (‘adopters’) and 3.6% planned to adopt precision farming within the next three years. Almost a quarter of farmers (23.5%) reported that they didn’t have plans to adopt precision farming within the next three years. Just over one third (34.1%) of respondents reported that they were not familiar at all with precision farming.

Farm size as measured by farm sales, age, education, and enterprise type were all found to influence famers’ familiarity with precision faming technology. More than half of farmers reporting sales between $50,000 and $99,999 were unfamiliar with precision farming while less than ten percent of farmers reporting sales of $1,000,000 or more indicated that they were unfamiliar with precision faming.

The survey confirmed distinct differences between adopters and non-adopters. In particular, operators of larger farms were shown to adopt precision farming technology at much higher rates than operators of smaller farms, confirming a trend found in earlier studies in Ohio and nationally.

The most basic precision farming technology, a portable or fixed mounted GPS device, was also the most frequently adopted precision farming technology with a 30.2% adoption rate. Compared to smaller farms, larger farms were exceeding the adoption rates by about eight times. 78.5% of farms with sales of $1,000,000 or more were using a GPS device compared to 10.2% of farms with sales between $50,000 and $99,999.

The second most frequently adopted precision farming technology was precision guidance. This technology was adopted by 27.4% of respondents surveyed in this study. While less than 10% of farms with sales between $50,000 and $99,999 were using this technology, adoption by farmers with sales of $1,000,000 or more were at 77.7%. Manual steering assisted by a lightbar was the most popular precision guidance technology reported by 65.1% of precision guidance adopters. 45.0% of adopters reported an assisted steering guidance system while 7.2% reported an auto steering guidance system.

Yield monitor technology was the third most popular precision farming technology. 25.3% of all surveyed farmers used a yield monitor. With 79.7%, the adoption rates by operators of large farms were exceeding the adoption rates of smaller farms (7.0%) by about eleven times. The majority of adopters (64.7%) were using a yield monitor system linked to a GPS system.

Geo-referenced soil mapping was used by 22.7% or all farmers. Adoption rates range from 8.6% for small farms to 55.8% for the largest farms.

The fifth most commonly adopted precision farming technology was variable rate application for fertilizer. Large farms were again leading the adoption but the difference to smaller farms was less pronounced exceeding adoption rates by about five to seven times. Variable rate application was most popular for application of potassium (19.4%), lime (19.1%), and phosphorus (18.8%). Variable rate application for nitrogen was less popular with 5.7% of all farmers adopting.

Boundary mapping was used by 15.6% of all farmers and aerial/satellite field imaging was adopted by 9.8% of all farmers.

Additional precision farming components that were adopted less frequently include variable rate application for seeds (9.0%), herbicides (8.0%), and pesticides (7.6%). Similar low adoption rates were reported for map-based field scouting for weeds (8.8%), insects (8.2%), and crop diseases (7.8%).

On average, farmers in Ohio had adopted between 5 and 6 individual precision farming components.

We asked respondents to indicate the perceived value of each adopted precision farming component as well as of the entire precision farming system. Results indicated that for the average operator evaluation, benefits of the adopted precision farming system were exceeding costs. Almost a third (28%) of adopters reported that the benefits of their precision farming system were significantly greater than costs while 47.7% suggested that benefits were slightly greater than costs. Only 8.6% of farmers felt that costs were slightly or significantly greater than benefits.

Variable rate application for fertilizer technology received the most positive evaluation indicating that, on average, this is the most profitable individual precision farming component. Geo-referenced soil sampling technology ranked second before precision guidance technology. Yield monitor technology ranked forth before map-based field scouting technologies and variable rate technologies for other crop inputs. Boundary mapping technology and aerial/satellite field imaging technology were ranked the least profitable precision farming technologies. Overall, the results suggest that, across farmers, any of these individual technologies were profitable or at least neutral in their benefits and costs.

In summary, our data provides an update of the most recent trends in the adoption of precision farming technology in the state and confirms distinct differences between adopters and non-adopters. In particular, we found that operators of larger farms were shown to adopt precision farming technology at much higher rates than operators of smaller farms. The most important individual precision farming components for operators in Ohio were GPS technology, precision guidance, and yield monitor technology. Across farms, benefits of the adopted precision farming system were exceeding costs suggesting that precision farming was considered profitable by the average adopter. 

A full report of this study and additional information are available from: http://aede.osu.edu/programs/VanBuren/FarmerSurvey2010.htm.

Tax Benefit – Section 179 Expensing Increased from $250,000 to $500,000 for 2010 and 2011

The recently passed “Small Business Jobs Act of 2010” signed into law on Monday, September 27th allows for opportunity for sizable tax write offs for farmers in 2010 and 2011. In an effort to further jumpstart the economy, this Act raises the threshold on “Section 179 Expensing” from the current limit of $250,000 to $500,000 for tax years 2010 and 2011. The terms apply to new and used equipment. Previous law phased out the deductions as eligible purchases exceeded $800,000. The new ceiling for this phase-out has been raised to $2,000,000. The new Act also revived the 50 percent bonus depreciation for qualified property placed in service in 2010. These measures are meant to be an incentive for taxpayers to buy equipment.

Further information on the Act can be found at:

http://www.calt.iastate.edu/taxbill.html

http://www.sba.gov/jobsact/

2011 Ohio Corn, Soybean and Wheat Enterprise Budgets

Budgeting helps guide you through your decision making process as you attempt to commit resources to the most profitable enterprises on the farm. Crops or Livestock? Corn, Soybeans, or Wheat? We can begin to answer these questions with well thought out budgets that include all revenue and costs. Without some form of budgeting and some method to track your enterprises’ progress you’ll have difficulty determining your most profitable enterprise(s) and if you’ve met your goals for the farm.

Budgeting is often described as “penciling it out” before committing resources to a plan. Ohio State University Extension has had a long history of developing “Enterprise Budgets” that can be used as a starting point for producers in their budgeting process.

Newly updated Enterprise Budgets for 2011 have been completed and posted to the Farm Management Website of the Department of Agricultural, Environmental and Development Economics. Updated Enterprise Budgets can be viewed and downloaded from the following website:

http://aede.osu.edu/Programs/FarmManagement/Budgets/

Enterprise Budget projections updated so far for 2011 include: Corn-Conservation Tillage; Soybeans-No-Till (Roundup Ready); Wheat-Conservation Tillage, (Grain & Straw).

Our enterprise budgets are compiled on downloadable Excel Spreadsheets that contain macros for ease of use. Users can input their own production and price levels to calculate their own numbers. These Enterprise Budgets have a new look with color coded cells that will enable users to plug in numbers to easily calculate bottoms lines for different scenarios. Detailed footnotes are included to help explain methodologies used to obtain the budget numbers. Starting this year we will be updating these Enterprise Budgets periodically during the year is large changes occur in price or costs. Budgets will include a date in the upper right hand corner of the front page indicating when the last update occurred.

Departmental Update: National Rankings and Leadership Change

There has been lots of recent activity in the Department of Agricultural, Environmental and Development Economics (AEDE) at The Ohio State University, which serves as the intellectual home (and sometimes the physical home) for many on the Ohio AgManager Team. 

Rankings

The National Research Council, which is part of the National Academy of Sciences, released its ranking of U.S. Departments of Agricultural and Resource Economics last week.  Well, actually, they released two rankings – each based on a different approach to evaluating and assessing graduate programs and faculty research productivity (for an analogy, think AP versus the coaches’ poll in football).  AEDE ranked 1st in one ranking and 10th in the other ranking. 

Rank R-Method S-Method  
1 Ohio State Cal-Berkeley  
2 Cal-Berkeley Oregon State  
3 Clemson Cal-Davis Appear in Both
4 Cal-Davis Maryland Cal-Berkeley
5 Maryland Cornell Cal-Davis
6 Minnesota Kansas State Maryland
7 Wisconsin Colorado State Ohio State
8 Purdue Wisconsin Wisconsin
9 Illinois Rhode Island  
10 Virginia Tech Ohio State  

 

We are proud of being in the top 10 in both rankings and hope to build on this in the future. 

Leadership Change

A key driver of the department’s success has been leadership both at the College and Departmental levels.  On October 1st AEDE said farewell to Alan Randall, who retired after 25 years as a faculty member and after serving as Department Chair since 1998.  Alan’s scholarship in the areas of Environmental Economics is world renowned and helped pave the way for the AEDE environmental economics group’s international reputation.  His leadership during the past 12 years was undoubtedly a critical driver in elevating Ohio State to the rankings mentioned above.  We wish Alan well as he transitions to academic opportunities that await him in his native Australia. 

Professor Tim Haab, another world-renowned environmental economist, took over leadership of the department as of October 1st.  Dr. Haab has written highly influential academic articles and books, but has also made a popular press name for himself as the co-host of the world wide web’s most referenced environmental economics blogs.  Items from the blog have been referenced by several major news organizations and offer a fresh and often funny perspective on news items from the perspective of an environmental economist.  We look forward to his leadership in the upcoming years.

Ohio Livestock Care Standards Board Proposes First Set of Standards

Proposed rule addresses standards for farm animal euthanasia

The Ohio Livestock Care Standards Board has developed its first set of proposed standards regarding farm animal welfare, pursuant to the constitutional amendment passed last year by Ohio voters as Issue 2 (see our earlier posts on Issue 2).  The Livestock Care Standards Board unanimously approved standards regarding euthanasia of farm animals on October 5, 2010.   The ODA will now carry the Board’s proposed standards through the administrative rulemaking process.

The proposed standards define acceptable methods of euthanasia, which includes inhalant agents, injectable agents, captive bolt guns, blunt force, gunshot, cervical dislocation, decapitation, electrocution, foam hypoxia, maceration and exsanguination.  The proposal establishes different acceptable methods and guidelines for different species, which includes equine, poultry, swine, cattle, goats, sheep, alpaca and llamas.  Provisions also address general considerations for performing euthansia, such as euthanization of animals unlikely to recover from illness or injury, determination of death, unsuccessful euthanasia, disposal of animals and mass euthanasia.  The rule references a civil penalty provision for violations, but the actual civil penalty provision is still under development by the Board.

Interesting to note is how the proposed euthanasia rule relates to the animal welfare agreement entered into last June by the State of Ohio, Humane Society of the United States, Ohio Farm Bureau and several other agricultural organizations.  Regarding euthanasia, the animal welfare agreement states:

“Recommendations will be made to The Ohio Livestock Care Standards Board (OLCSB) to take action on issues related to downer cattle and humane euthanasia using language consistent with the proposed ballot initiative.”

The proposed ballot initiative referred to in the animal welfare agreement is the HSUS-led initiative that could have been on the upcoming November ballot, but was pulled as part of HSUS’s compromise in the animal welfare agreement.  The ballot initiative proposed amending the Ohio Constitution to include this language on euthanasia:

“Require a farm owner or operator to  ensure that all on-farm killing of cows or pigs be performed in a humane manner using methods explicitly deemed “Acceptable” by the American Veterinary Medical  Association.  This standard shall also include a prohibition on strangulation of cows and pigs as a form of euthanasia.”

Note that the animal welfare agreement does not require the adoption of the ballot initiative language in the euthanasia standards; it states only that “recommendations will be made” to the Board to take action using language consistent with the proposed ballot language.  A review of the record available on the Board’s website does not indicate whether any party to the animal welfare agreement made such recommendations to the Board.  The Board had already begun working on the euthanasia standards prior to the announcement of the animal welfare agreement in June.  A review of the Board’s proposal, however, indicates that the euthanasia standards do not precisely duplicate the HSUS’s proposed ballot language.  The standards don’t include a specific prohibition against strangulation of cows and pigs.  Instead, the standards do not list strangulation as an acceptable method of euthanasia.  Nor do the standards specifically reference the American Veterinary Medical Association (AVMA) acceptable standards; but many of the Board’s acceptable standards are similar to AVMA acceptable standards.  Whether or not recommendations were made to the Board as promised in the animal welfare agreement, the Board’s proposed euthanasia standards do appear to be “consistent with” the ballot initiative language on euthanasia.

ODA announced the Board’s proposed euthanasia standards today and will accept comments on the standards until October 20, 2010.  Following review of comments, ODA will submit the package to the joint legislative committee that oversees the administrative rulemaking process.  To view the proposed euthanasia standards, visit the ODA website, here.

Soil App Available for iPhone, Droid

In the September issue of the Soil Science Society of America Journal researchers at the University of California reported on a soil app that is available for iphone, itouch, and android devices.  The SoilWeb application interfaces with web-based soil survey application to extend soils information in a user-friendly format.  Here’s the SoilWeb app description:

GPS based, real-time access to USDA-NRCS soil survey data, formatted for mobile devices. This application retrieves graphical summaries of soil types associated with the user’s current geographic location. Images are linked to detailed information on the named soils.

The app is now available for free download for both iphones (iphone app store) and android operating system phones (android market place). The app works with the GPS receiver of smartphones to intersect with online soil survey to identify soil properties anywhere in the lower 48 where there is cell phone coverage.

A help guide for iPhones (also useful for android devices) is available at http://casoilresource.lawr.ucdavis.edu/drupal/node/886

This would be a good app for you to have on your smartphone device as a quick reference. It is much faster than pulling up web soil survey on a laptop or netbook, the downside is that you do not get the aerial image. You may consider using the google earth app for aerial images.

Knowledge of soil taxonomy and soil survey is helpful, but not required. For assistance with soil science terms, please visit the Glossary of Soil Science terms at https://www.soils.org/publications/soils-glossary/

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(click image for larger view) This is the result users will see.

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(click image for larger view) Official soil series description displayed after clicking on a soil profile.

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The Soil Science Society of America Journal is the official publication of the Soil Science Society of America (https://www.soils.org/membership). Affiliated societies include American Society of Agronomy (https://www.agronomy.org/membership) and Crop Science Society of America (https://www.crops.org/membership).

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Reference:

The abstract of the journal article is available at https://www.soils.org/publications/sssaj/abstracts/74/5/1682

Official SoilWeb app homepage http://casoilresource.lawr.ucdavis.edu/drupal/node/902

Federal Court Decides Ohio Dairy Labeling Case

Court of Appeals Strikes Down Portions of Ohio’s Rule on “rbST-free” Labeling

The federal Court of Appeals for the Sixth Circuit has ruled in International Dairy Foods Assoc. v. Boggs, a controversial case long anticipated by Ohio’s agricultural interests.  At the center of the controversy is Ohio’s dairy labeling rule, adopted  by the Ohio Department of Agriculture in 2008.  Prior to the Rule, many dairy producers who did not use the genetically engineered hormone called recombinant bovine somatotropin (rbST) included language on their product labels that indicated the product as “rbST free” or “from cows not treated with rbST.”  Many others in the agricultural and dairy industries objected to such language and claimed that it was false and misleading and suggested that the claimed “rbST free” dairy products are superior to others.  In response to such concerns, Governor Strickland directed the ODA to “define what constitutes false and misleading labels on milk and milk products” and to require dairy producers claiming that they do not use rbST to submit supporting documentation and create labels containing representations consistent with the Food and Drug Administration’s findings that there is no significant difference between milk from rbST-treated and untreated cows. 

The ODA rule, adopted  amidst much controversy that divided Ohio’s agricultural interests, states that:

(A) Pursuant to sections 917.05 and 3715.60 of the Revised Code, dairy products will be deemed to be misbranded if they contain a statement which is false or misleading.

(B) A dairy label which contains a production claim that “this milk is from cows not supplemented with rbST” (or a substantially equivalent claim) may be considered misleading on the basis of such language, unless:

(1) The labeling entity has verified that the claim is accurate, and proper documents, including, but not limited to, producer signed affidavits, farm weight tickets and plant audit trails, to support the claim, are made readily available to ODA for inspection; and

(2) The label contains, in the same label panel, in exactly the same font, style, case, and color and at least half the size (but no smaller than seven point font) as the foregoing representation, the following contiguous additional statement (or a substantially equivalent statement): “The FDA has determined that no significant difference has been shown between milk derived from rbST-supplemented and non-rbST-supplemented cows.”

(C) Making claims regarding the composition of milk with respect to hormones, such as “No Hormones”, “Hormone Free”, “rbST Free”, “rbGH Free”, “No Artificial Hormones” and “bST Free”, is false and misleading. ODA will not permit such statements on any dairy product labels. 

(D) Statements may be considered to be false or misleading if they indicate the absence of a compound not permitted by the United States [F]ood and [D]rug [A]dministration to be present in any dairy product, including, but not limited to antibiotics or pesticides. Except as otherwise provided in this rule, accurate production claims will not be deemed false or misleading.

Ohio Admin. Code § 901:11-8-01.

The International Dairy Foods Association (IDFA) and Organic Trade Association (OTA) both challenged Ohio’s rule, claiming among other things that the rule is unconstitutional for violating their First Amendment rights to free speech and for violating the Commerce Clause.  On all but one claim at the trial level, the federal district court granted summary judgment in favor of the State and denied the request for injunctive relief; IDFA and OTA appealed the decision to the Sixth Circuit Court of Appeals.

In the appellate court’s opinion issued on September 30, 2010, the court addressed three issues:  whether the rule’s ban on any dairy composition claim violates the First Amendment;  whether the rule’s disclosure requirement for production claims violates the First Amendment, and whether the rule violates the Consitition’s Commerce Clause.  The court ruled as follows on each issue:

The rule’s ban on “composition” claims such as “rbST free” and ”hormone free.”  Relying on the lack of scientific tests that can ascertain whether rbST exists in milk from either treated or non-treated cows, the court determined that a compositional claim such as “rbST free” is not inherently misleading since it “at best informs consumers of a meaningful distinction between conventional and other types of milk and at worst potentially misleads them into believing that a compositionally distinct milk adversely affects their health.”  The court also concluded that although the State’s purpose for the rule–to prevent consumer deception–is substantial, a record of such deception was merely hypothetical and the rule neither directly advanced that purpose nor was narrowly tailored to achieve the purpose.  Of importance to the court was the argument that producers should be permitted to use the “rbST free” language in conjunction with a disclaimer that would clarify that the hormone is definitively not in their milk but has not been detected in conventionally produced milk.  The court agreed that merely requiring producers to use a disclaimer would prevent deception and stated that a State “may not place an absolute prohibition on certain types of potentially misleading information…if the information also may be presented in a way that is not deceptive.”  The complete ban on composition claims thus violated IDFA and OTA’s First Amendment rights to conduct truthful commercial speech, held the court.

The rule’s disclosure requirement for production claims.  The second issue concerned the rule’s requirement for producers who state that “this milk is from cows not supplemented with rbST” to also include on the product label, contiguously and in a particular font, that “the FDA has determined that no significant difference has been shown between milk derived from rbST-supplemented and non-rbST supplemented cows.”    The federal district court found that this disclosure requirement was “reasonably related” to the rule’s purpose of preventing deception.  IDFA and OTA argued that the district court should have used a more stringent standard of review for the disclosure requirement, rather than a review of whether the requirement was “reasonable.”  The appeals court disagreed, holding that reasonableness was the appropriate standard of review.  While the court held that a disclosure requirement is reasonably related to the purpose of preventing deception, it also determined that the rule’s strict requirements for the size, font and location of the disclosure had no rational basis or “demonstrable connection to ensuring that consumers are not misled.” Compelling to the court was an argument rejected by the federal district court–that the use of an asterisk on the label, rather than the restrictive labeling requirements, would be less burdensome and would effectively inform the consumer.  The court disagreed and reversed the federal district court’s prohibition on the use of an asterisk in lieu of the restrictive formatting mandates in the disclosure requirement.

The rule’s impact on interstate commerce.  IDFA and OTA argued that Ohio’s rule created an undue burden on interstate commerce in violation of the Constitution’s commerce clause.  Legal precedent requires the court to determine first whether the rule has the impermissible effect of controlling commerce outside the state’s boundaries and second whether the result of the rule is preferential treatment for in-state economic interests.  If the answers to both are negative, the court may conclude that the rule is not invalid on its face but must then determine whether the rule burdens interstate commerce more than it benefits the state.  The appeals court quickly concluded that the rule did not mandate conduct outside the state, impede the free flow of milk products across the country or favor Ohio interests over outside interests.  Analyzing the burdens and benefits of the rule, the court recognized the importance of the rule’s intended benefits, consumer protection, and noted that the potential burdens of the rule were diminished by the court’s invalidation of the more restrictive provisions in the rule.  Thus, the burdens did not outweigh the benefits and the rule was not in violation of the Commerce Clause, said the court.

The court of appeals remanded the case back to the federal district court for further proceedings.  Barring a request for review of the decision to the U.S. Supreme Court, the outcome of the case will likely yield a formal revision of Ohio’s dairy labeling rule.  We can expect to see a rule that does not prohibit the use of “rbST free” and similar language but requires disclosure that rBST has not been detected in conventional milk and allows the less restrictive use of an asterisk to disclose information that the FDA has not detected differences between products from rbST and non-rbST cows.

Read the Court of Appeals opinion in International Dairy Foods Assoc. v. Boggs here.