ORLANDO, Fla. — This is a pivotal moment for farmers, said Secretary of Agriculture Tom Vilsack at the Commodity Classic in Orlando.
It is similar to historic, transformational times like the bourgeoning focus on conservation during the Dust Bowl in the 1930s and the push by Secretary of Agriculture Earl Butz to a more market-driven system in the 1970s, Vilsack said.
“It’s an exciting new opportunity,” he said. “It is right here. It is right now.”
Beyond the traditional ways of selling crops and livestock, a new era is emerging for climate-smart commodities, ecosystem service markets, bio-based product ingredients, biofuels and renewable energy production, Vilsack said.
These opportunities, along with initiatives to lower input prices, particularly for fertilizer, and to expand global markets, are poised to bolster rural America and help guarantee the next several generations in agriculture, he said.
“The way to do this is to focus as well on additional income streams or market opportunities for producers, taking that same farmstead and instead of just relying on commodity sales or livestock sales or government payments, creating three, four or five different profit centers on that same farm, so that if commodity prices are not good, if there’s drought or whatever it might be, there are other things that are providing income that aren’t necessarily directly connected to that commodity, without any additional work, if you will,” he said.
“That’s one of the reasons why we promoted climate-smart commodities, the notion of taking climate-smart practices in producing a commodity that has an added value that the market will reflect and will pay.”
At the Commodity Classic, Vilsack revealed the first round of recipients in a new grant program to add innovative domestic fertilizer capacity.
He announced $29 million in grant offers to eight projects in Alabama, Colorado, Massachusetts, Ohio and Washington to modernize equipment, advance climate-smart practices, build production operations and facilities and expand the capacity of fertilizer production in the United States.
The U.S. Department of Agriculture received $3 billion in applications from more than 350 independent businesses from 47 states and two territories, he said.
The ag secretary also signed a pair of agreements to boost soil health practices under USDA’s Partnerships for Climate-Smart Commodities initiative. Each of the two projects will receive grant rewards of up to $95 million.
Farmers for Soil Health will look to increase cover crops by 1 million acres over 20 states. The partnership will be led by the National Fish and Wildlife Foundation, as well as the National Corn Growers Association, the United Soybean Board and the National Pork Board.
Led by the Iowa Soybean Association, the Midwest Climate-Smart Commodity Program will provide direct financial incentives for farmers across 12 states to implement climate-smart practices during the next five years.
“The notion behind this is that you create that value-added opportunity, but in addition, as you’re doing that, you’re also going to be able to allow those farmers to qualify for what are called ecosystem service markets. And what are they? They’re carbon markets. They’re wildlife markets. They’re water markets,” Vilsack said.
“There are 24 of these markets today in America. These are markets that pay for conservation results, for environmental results, for greenhouse gas reductions, for carbon sequestration, for carbon storage results, which farmers are going to be able to provide — that’s a new income source that didn’t exist before.”
The United States has the opportunity to significantly expand renewable energy production, Vilsack said.
“With the Inflation Reduction Act, there’s an historic amount of money in the Renewable Energy for America Program where farmers can essentially on their own farm create a solar system or a windmill that allows them to produce their own energy and maybe they produce excess energy which they can put on the grid, and as they put it on the grid, they get paid for it, and as they get paid for it, they have another income source,” he said, citing rural electric cooperatives.
“This is going to be a massive opportunity. Why? Because RECs across the United States are going to overtime decarbonize their systems, they’re going to rely more and more and more on renewable systems and less and less on fossil fuel based systems, and as they do, they’re going to be looking for the generation and transmission capacity. That’s a new income source that farmers can consider.”
Vilsack said he fully appreciates the concerns that some farmers have about the expanse of large-scale renewable energy.
“We want to make sure that we work with those who are interested in doing that, to make sure that they’re not taking highly productive land out of production, but that they’re utilizing that opportunity for less productive land, so in turn we have yet another income source,” he said.
This is a new opportunity to take an agricultural product and convert it into something more valuable, Vilsack said.
“That does two things — it creates yet another revenue source for farmers, but it also creates processing jobs and manufacturing jobs in rural places,” he said.
Vilsack said biofuels, traditionally corn ethanol and soybean biodiesel, offer new opportunities, as well — namely, sustainable aviation fuel.
“We need a sustainable, low-carbon fuel. It’s a 36 billion gallon industry that doesn’t exist today, for all intensive purposes,” he said. “It’s a new opportunity for American agriculture to lead the way.”
Earlier in the week, USDA funded 31 processing facilities for meat, poultry and processed eggs and issued a report on the seed industry, creating a liaison between the agency and farmers and plant breeders.
“The point of this is we’re trying to help ensure that there’s going to continue to be innovation, but that you are paying for that innovation at a reasonable cost,” said Vilsack as the keynote speaker at the annual meeting of the NCGA, the American Soybean Association, the National Association of Wheat Growers, National Sorghum Producers and the Association of Equipment Manufacturers.
The Biden administration is strategically focused on trade, Vilsack said, noting the United States set records each of the last two years.
“It’s fairly clear that we believe in a science-based and rules-based system. It’s fundamental to our approach to trade,” he said.
“And so when Mexico and the Mexican president issued his decree raising concerns and doubts about the safety of biotechnology corn, suggesting bans or the lack of use of that corn, we felt that there was not a scientific basis for that decree. We questioned it. We asked the president to reconsider. He was unwilling to do that.”
“And so we began with the U.S. Trade Representative’s Office the formal process under USMCA on a consultation to make sure that we defend the notion of a science-based trading system, that we send a strong message to the world about the safety of biotech products and we ensure that we continue to have market access,” he said, eliciting applause.
The efforts of farmers allow others to focus on their paycheck, giving them the freedom to do other jobs and then go to a grocery store to get food for their families, Vilsack said.
“That is a tremendous gift that you all, the farmers, the ranchers, the producers of this great country, have provided to every single American,” he said to another round of applause. “And, frankly, we don’t thank you enough.”
America is the greatest country on earth, he continued.
“It is a country that provides enormous liberty and freedom for us to be able to dream big dreams and actually accomplish them, to be able to think we can do just about anything — in my case, to come from an orphanage in Pennsylvania to be speaking to thousands of people as the secretary of agriculture,” he said, garnering more applause. “This is a great country.”