1099-Misc deductions

Yes, the best way to report is to add the 1099-MISc as Miscellaneous Income (not in the 1099-MISC section), then add the expenses as a negative amount as Miscellaneous Income.

From IRS Pub 225.

If an individual participates in a 4-H 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.  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 4-H or FFA organization. Such a project is generally not considered a trade or business.