The tax exempt number you are referring to I assume is for state sales tax exemption.
An FFA project is reported on her personal tax return, not yours.
For your daughters federal income tax return, you report the income minus her expenses in the year she sells the animal project. It's reported as Other Income because educational projects are not subject to SE tax.
From page 72 of IRS publication 225;
4-H Club or FFA project. If an individual participates in a 4H Club or National FFA Organization (FFA) project, any net income received from sales or prizes related to the project may be subject to income tax. Report the net income as “Other income” on line 21 of Form 1040. If necessary, attach a statement showing the gross income and expenses. The net income may not be subject to SE tax if the project is primarily for educational purposes and not for profit, and is completed by the individual under the rules and economic restrictions of the sponsoring 4H or FFA organization. Such a project is generally not considered a trade or business.