While speaking to leaders at the National Association of State Departments of Agriculture’s Winter Policy Conference, Secretary of Agriculture Tom Vilsack says he knows there are reasons for concerns for ag stakeholders, but he also expressed confidence in those in the agriculture sector to address those challenges.

“I know we’re concerned about avian influenza, and we’re concerned about African swine fever and some of the other challenges and issues that we’re facing with input costs,” Vilsack says. “I understand that there is reason for concern, but I am confident in the resiliency and capacity of American agriculture to meet those challenges."

“And I think there are enormous and amazing opportunities before us that will impact positively the bottom line for farmers, ranchers and producers,” Vilsack continues.

Echoing similar statements in recent public appearances, Vilsack again shares the need to transition U.S. agriculture from an extraction economy with products and wealth being created elsewhere to a more circular economy that creates opportunities, wealth and jobs right where the natural resource advantage is in rural places on farms and ranches and in rural communities that serves those farms and ranches.

Included in those opportunities, Vilsack again expanded upon the recently announced $1 billion in pilot projects under USDA’s climate-smart commodity partnership. “We think this is an enormous opportunity for us to create a new value-added proposition for American agriculture,” Vilsack says. “And at the same time enable farmers, ranchers and producers to qualify as well for private market participation in ecosystem markets which can increase bottom lines for the folks we care about.”

He says he thinks American agriculture is going to take the lead on establishing climate-smart commodities. “No other country is going to be as aggressive as we are being in terms of providing support and help on an ongoing basis for partnerships for large-scale demonstration and pilot projects which we think can change the landscape here.”

Vilsack says today these pilot projects can help create adequate measurement and monitoring tools to quantify the result of climate actions taken by farmers. As companies are looking to market products that have sustainability value, USDA hopes to establish a credible market to allow for farmers and food companies to find a higher return for those actions.

Creating more new, better markets

Vilsack again notes that 89.6% of American farmers today do not generate the majority of their income from the farm. “We need to do a better job of creating more new and better markets.”

Although today farmers may have just a few revenue sources, the agriculture of the future needs to find new revenue sources such as converting agricultural waste into different ingredients or participating in ecosystem markets or selling different ingredients to processing facilities located in rural communities.

USDA has also taken measures to expand investments in local and regional food systems. “I think there are tremendous opportunities there for small and mid-sized producers to have a market which they can control, in which they can profit from looking forward to increased advancements and investments in that system,” he says.

He says he hopes to see through some of these opportunities smaller and midsize producers joining together and creating a cooperative model that’s been so successful in other areas of agriculture and applying that cooperative model to this local, regional food system and taking advantage of those procurement opportunities and benefit as producers not only from production profits, but also processing profits.

Vilsack also shares more needs to be done to help connect producers with finding value-added opportunities and offering technical assistance. This can come from enabling a producer of any size to see where they fit into the system and how they might be able to profit from the system.  This doesn’t require producers to get big or get out, he says, but instead figuring out ways in which, “depending upon the size of your operation, we figure out ways to make it work for you and make it work for us.”

Vilsack says there are tremendous opportunities to redefine and expand the concept of agriculture so that “everybody in this country knows and appreciates what agriculture does for the country.”

Higher input costs

When asked what USDA is doing to help farmers faced with higher input costs, one way is to encourage higher commodity prices that allow for farmers to remain profitable despite the higher input costs.

Vilsack says USDA can also do a better job researching and educating farmers on better knowledge and use of inputs at the farm level. He also shared risk management tools can encourage the improved use and efficiency of inputs such as nitrogen. The recent Post-Application Coverage Endorsement – PACE – offered by the Risk Management Agency provides supplemental coverage when a producer plans to split-apply nitrogen but is prevented due to field conditions caused by adverse weather, resulting in a yield loss.

Vilsack also says USDA is asking questions to the Department of Justice about whether the input supply cost increases are justified. “I think it’s important for us to ask questions about whether all of these increases are justified based on disruptions or based on the normal economics of it,” Vilsack says. He adds it may also be appropriate for USDA to ask the question of whether there is sufficient capacity domestically for some of these inputs.