KANSAS CITY — “Agriculture is the solution that can feed a growing planet,” U.S. Deputy Secretary of Agriculture Stephen Censky told attendees at the Ag Outlook Forum, presented by the Agricultural Business Council of Kansas City and Agri-Pulse and held in Kansas City Sept. 23. Mr. Censky said agricultural innovation is the key.
“It’s important that we position agriculture as the solution,” he said. “Right now, we have 7.5 billion people on the planet. By the year 2050, we’re going to be approaching 10 billion people. To feed them all, we are going to have to radically and substantially increase our agriculture productivity and we need to do that through innovation.
“We know that we have the most productive farmers and ranchers in the world. We know that they are innovating, that they are creative and adapting how they produce. We know that we have a very innovative agriculture business and scientific sector that is innovating and bringing farmers and ranchers new products. How can we create the right regulatory environment so that innovation and the adoption of those technologies can be accelerated and not impeded?”
Research, both in government and in the private sector, will help with agricultural innovation, Mr. Censky explained. Annually, the U.S.D.A. has more than $3 billion in its agriculture research budget.
“We want to be sure that our research investments are going toward projects that are moving the needle and will make a difference for farmers and ranchers economically,” he said. “We want to partner with the private sector to make sure the breakthroughs that we produce out of our research are going to be picked up and marketed and further developed by those in the private sector.”
In addition to innovation, Mr. Censky said biofuels technologies are helping to advance the agriculture industry.
“Biofuels is a win-win, win-win situation,” he said. “It’s a win for farmers. It’s a win by creating demand for the products we’re growing. It’s a win for jobs because it’s creating jobs in rural communities — that are being supported by biofuels. It’s a win for the environment because of the more positive greenhouse gas profile and the other benefits that biofuels have. And it’s a win for energy security.”
U.S. farmers are facing a tough economic outlook. The Economic Research Service (E.R.S.) of the U.S.D.A. is forecasting for 2019 that farming income will be up $5 billion from 2018 but that it will be 49% below the peak of the market back in 2013. It also will be 23% below the historical average over the past 20 years.
Last year, bankruptcies among farmers in the Midwest states rose from 79 to 103, according to the Federal Reserve Bank of Minneapolis. However, that rate overall remains low at 2.35 bankruptcies per 10,000 farms nationwide, which is 10 times lower than the bankruptcy rates in the 80s.
Despite the wet spring, the USDA is projecting the sixth largest corn and soybean crops — 13.8 billion bus of corn and 3.63 billion bus of soybeans.
Record red meat and chicken production also is predicted for 2020, which likely will have some downward pressure on prices.
“Nonetheless we expect to see continued growth in exports despite a challenging trade environment,” Mr. Censky said. “So, we expect to see livestock, dairy and poultry prices to increase in 2020. We at U.S.D.A. know how important trade is to U.S. agriculture.”
In 2017, $138 billion of U.S. agriculture exports produced $179 billion in additional economic activity. Agriculture exports supported 1.1 million jobs, including 800,000 in the non-farm sector. Each $1 of ag exports generated an additional $1.30 in business activity, Mr. Censky said. In 2018, U.S. ag exports were $140 billion.
“We’re working at U.S.D.A. to expand markets around the globe,” Mr. Censky said. “One of the markets that we’re looking at is Japan. We think this is really good news for U.S. agriculture. We see that this framework agreement is a big win for U.S. agriculture. The deal will help our farmers and ranchers export more to Japan and we’ve secured some market access for a lot of products.”
Mr. Censky also mentioned the possibility of future export opportunities in India, and of course the ongoing trade talks with China.
“In light of the positives that are happening on the agriculture trade front — in Japan and possibly India — one that has a lot of opportunity for us to move forward on is the U.S.M.C.A. agreement,” he said. “We know how important that is for our products.”
Last week, all former secretaries of agriculture endorsed the U.S.M.C.A. and talked about what a great agreement it was for U.S. agriculture.
“Support for the U.S.M.C.A. comes across all spectrums of the economy, all spectrums of the U.S. farm economy and across all political parties,” Mr. Censky said. “It will help lock in and improve the flow of ag commodities that are going to our first and second largest export markets.”
Last year, the United States exported around $40 billion to Canada and Mexico.
“The U.S.M.C.A. really is a good agreement,” he said. “We need a vote. I can’t underscore enough how important it is that Congress act in the next month or so because it will get harder and harder to pass it closer to the election.”
While trade negotiations with China continue and the industry awaits the passing of the U.S.M.C.A., the U.S.D.A. continues to support the agriculture industry with its trade mitigation programs.
“We know that farmers would rather have a market for their products rather than have a check from the government,” Mr. Censky said. “But, while we work to hopefully get China to the table, the president has made it clear that he wants to have farmers’ backs. He directed the U.S.D.A. to provide a $16 billion program that has direct payments to farmers, through commodity purchases as well as trade development and promotion. Our hope next year, if we can secure a trade agreement with China soon, is that we won’t need a trade mitigation program.”
