Vilsack closes out Commodity Classic

U.S. Secretary of Agriculture Tom Vilsack closed out the 2021 Special Edition of Commodity Classic during the final general session.

Nearly 6,000 attendees watched sessions online after the 25th anniversary event had to pivot to virtual because of COVID-19 restrictions.

Vilsack said he found himself being presented with the opportunity to be secretary of agriculture during a very, very difficult time. He acknowledged how those who work at the U.S. Department of Agriculture, as well as the farmers and ranchers—who they serve—are going through a difficult time with challenging commodity prices, COVID and many other issues.

“I realize how difficult it has been,” he said. “It is a different time. It is a different department and to a certain extent, I’m a different person coming into this role a second time.”

This time around—in his first eight days in office—he wants to focus on several issues for the next couple of months. First being Coronavirus Food Assistance Program and COVID relief. Many questions have been asked as to whether or not the department will focus on completing the payments into CFAP.

“When I came into office it was pretty clear that there were a significant number of folks who had been impacted negatively by COVID, along the entire supply chain of our food and agriculture industry,” he said.

Vilsack said the reality of it is agriculture employs more than 20% of the entire American workforce and it’s an industry that impacts and affects nearly a quarter of the entire economy.

“When COVID hit, obviously, there were a substantial number of folks in the ag industry that have been negatively impacted with previous COVID packages,” he said. “Some, but not all of those in that supply chain have been helped and assisted to get through this crisis.”

At USDA, officials first wanted to determine what need was out there. Questions like how many folks, how many groups, organizations and entities within the supply chain needing help and assistance, needed to be answered. Plus who has received assistance—and whether or not it was enough.

“We’re in the process of completing that analysis here, and I expect and anticipate within the next several weeks we’re going to be in a position to let folks know at least momentarily what our thoughts are as we go forward with these COVID relief packages,” Vilsack said.

At the time of his speech, Vilsack was “watching with anticipation” the passage of the American Rescue Plan. The plan was passed by the U.S. Senate and awaits the House of Representatives vote.

He realizes the importance of the challenges people are facing while waiting for aid, and the USDA is trying to get answers to folks as quickly as they can.

While preparing for his confirmation hearing, Vilsack was doing research and found information about the state of farming and incomes. Some 89.6% of farmers and ranchers make the majority of their money from their farming operations.

More work needs to be done to create a situation in an industry where more people can make the majority of their earnings from what they want to do and what they love to do—farming and ranching.

“So the focus for us over the course of the next several months—frankly for the next four years, is going to be on markets,” Vilsack said. “More markets, better markets, newer markets and fair markets.”

In regard to more markets, 20% to 30% of what is grown and raised in the U.S. ultimately is exported outside of this country. Vilsack said he learned a lot of lessons the last four years working for the dairy industry—that we need to continue focusing on providing a greater presence for U.S. products in the markets.

“Presence means more people on the ground in those markets, more partnerships with institutions and universities to have a better understanding of what each market requires and more promotions to make sure that the U.S. brand is well known and well accepted and well received in markets,” he said.

Because of that USDA will focus its attention and resources to provide assistance to allow greater presence in key markets. This includes trade agreements like USMCA. As for more markets, this means looking at ways in which there potentially could be new trade agreements. Vilsack believes the new administration is taking steps to send signals to the UK and the EU as an opportunity to negotiate the relaxation of certain tariffs.

“Maybe that gives us an opportunity to have a conversation about trade agreements in both the UK and EU,” he said. “Maybe it gives us an opportunity to open the door with the understanding that any trade agreement must include open access to our agricultural products in order for it to be successful.”

And of course, you can’t have the trade conversation without talking about China. It was important and necessary to continue the relationship because of Phase One. Vilsack remains confident about China’s continued purchases—as long as the relationship is focused on trade.

“Because China needs what the U.S. can provide and Chinese want a lot of what we can provide,” he said. “And we’ve seen recent purchases from China reflect their need, and our ability to meet the need.”

In reality though, the relationship with China is complex, and not simply based on trade. It has multiple layers.

“Some of those layers in which we compete with China on the world scene,” he said. “And some of those layers, we are cooperating with China and some major issues like climate change and cyber terrorism.”

The complicated relationship could have a negative impact on a trade relationship. Because of that, USDA and the secretary of agriculture are working to be more engaged in conversations with national security to make sure decisions that could have an impact on ag are well understood before finalized.

“I’ve continued to make the case that agriculture needs to be more engaged and more involved, and more connected, if you will, to those conversations,” Vilsack said.

What does Vilsack mean with better markets? Open and transparent markets.

“I think it’s fair to say that there has been a lot of concern about consolidation in agriculture in a variety of areas, and we’re going to do what we can at USDA to make sure that we have adequate price discovery that we strengthen rules for a more competitive environment,” he said. “To make sure that farmers are treated fairly in the market and to the extent that there are issues real relative to unfair activities.”

Vilsack wants USDA to be a department that supports and works for farmers and ranchers and enforces fair trade and open markets. There are a number of competitive markets working well within the U.S., and making sure people understand what a competitive market looks like. One example of that is processing facilities.

“We learned during the course of COVID that our supply chain was easily disrupted,” he said. “That the transition from food going into food service to food being needed in food assistance was somewhat dependent on our ability to continue to process.”

When COVID struck meatpacking facilities across the country, there was a disruption in markets. Vilsack recognizes how important this is.

“We need to make sure that our markets are far more resilient,” he said. “And so, investing in additional processing opportunities, additional processing facilities will allow us to have more competitive markets.”

For new markets Vilsack means to focus on climate and the ability to create new opportunities for farmers to profit by sequestering carbon.

“Farmers profit by embracing practices that we know are climate smart,” he said. “That we know produce regenerative results. That we know will improve the soil health.

Four and a half tons of topsoil per acre are lost per year in the U.S., and naturally only being replaced by about a half ton per acre.

“So this is an issue that is, I think, incredibly important to the future of agriculture and the ability for us to maintain and continue productivity,” he said. “So we need to be investing in, supporting and providing incentives and encouragement for farmers to continue to embrace practices that they’re already embracing from cover crops to crop diversity to rotational grazing and other practices that we know will have a positive impact on soil health and water quality.”

By investing in those practices, Vilsack believes farmers and ranchers can do right by the environment and the climate by creating opportunities. Maybe even perhaps a carbon bank of sorts that could benefit farmers by being focused, and designed specifically for them.

“Today in America we have about 135 to 138 million carbon credits that are currently outstanding in various markets,” he said. “But the reality is only about 2.5 million of those credits are focused on agriculture and it’s because they aren’t necessarily designed the systems are not designed to benefit farmers.”

For something like this to work and for the USDA to get into the business of incenting and providing new revenue streams for carbon sequestration, there needs to be the creation, design, and implementation of programs that benefit farmers. And not necessarily an investor class of farmers.

“Because it’s the farmers who are going to be sequestering the carbon,” he said. “It’s the farmers who are going to provide some of the early wins, if you will, in an effort on climate.”

USDA is going to focus on how to best structure a program that will create a new revenue stream that supports existing conservation programs that benefit farmers.

“We’re also going to look for ways in which agricultural waste produced on the farm can be converted into a variety of new products,” Vilsack said. “We have history with this in terms of the renewable fuel industry but I think we can expand significantly beyond that.”

Vilsack hopes that by finding ways to create new revenue streams for farmers and help reduce the carbon footprint, as well as emissions, the president’s goal of zero emission agriculture by 2050 could be reached by embracing new opportunities to convert agricultural waste.

“This creates new revenue opportunities for farmers,” he said. “It also will create more manufacturing jobs and processing jobs in rural towns across America. The Department of Agriculture needs to be engaged in making sure that’s part of our future.”

And finally when talking about fair markets, Vilsack is addressing the equity issues that have plagued the USDA for quite some time.

“We have dealt with individual acts of discrimination at the department from time to time. We’ve compensated people for those individual acts,” he said. “What hasn’t happened is we’ve not been able to address the cumulative effect of discrimination over many, many decades, and the fact that it is put some farmers significantly behind their counterparts.”

Vilsack plans on spending time at USDA trying to figure out creative ways to have greater equity in what’s done at the department, and providing better opportunities for those socially disadvantaged farmers who have struggled.

“This is going to take an opportunity for us to really review deeply and comprehensively, the various programs at USDA, in a way that will allow us to identify any barriers of systemic racism or systemic barriers that have prevented full participation in our programs,” he said.

The new administration has made it clear to Vilsack and USDA the importance of doing this and it could potentially provide an opportunity to expand the number of farmers in this country.

And last but not least, Vilsack wants to work to rebuild his department. After reviewing a report on the number of vacancies that exist throughout the department, “there are vacancies in some key areas impact affecting people watching this program today.”

“Whether it’s FSA offices or whether it’s NRCS, the vacancy rates are pretty high, and we’re going to do what we can to address that within the budget resources that we have to make sure that we have people on the ground,” he said. “Being able to do the work that’s so important to all of you.”

Vilsack hopes to be able to return to the office soon, along with those employed by USDA.

“I think if we focus our attention on these strategies—have more markets and better markets and newer markets and fair markets, what we will see, I think, over time is a better economic opportunity for more farm families in this country,” he said.

Kylene Scott can be reached at 620-227-1804 or [email protected].