By any measure 2011 was a record-breaking year in U.S. agriculture. "We expect another strong year in 2012," Ag Secretary Tom Vilsack told participants at USDA's annual outlook forum gearing up this week in Washington, D.C.
"Opportunities abound," he said. Trade agreements open doors for more U.S. ag exports. The possibility that Russia may be allowed to enter the World Trade Organization spells other opportunities.
China has been a surging export market, particularly for pork and cotton. It should continue to be a good market. Although Chinese buying has a history of being sporadic and will likely continue to be that way.
On balance Vilsack expects 2012 U.S. export sales to be near 2011 levels.
Domestic markets should remain strong as well. The evolving and expanding U.S. biofuels industry holds even more long-term promise. Growth in the U.S. economy will support U.S. agriculture. Vilsack expects 2012 farm income to be the second highest on record.
However, any positive outlook is tempered by high energy costs and concerns about fragile nature of the economies in Europe and here at home.
USDA is closing 131 Farm Service Agency field offices due to declining budgets.
"Ten years ago we had roughly 18,000 people working for FSA," says Vilsack. "Now that's close to 12,000. Yet despite a declining budget and declining work force, we are using technology to improve efficiency."
U.S. agriculture needs a strong safety net. "I'm proud of the work the Risk Management Agency has done to expand availability of crop insurance by providing more policies," the secretary stressed.
Last year over 55 million acres experienced a devastating storm, fire or flood. A combination of crop insurance and disaster assistance provided by Congress helped those growers survive these setbacks.
"We will continue to provide that help when needed and will continue to see that premiums are fair," Vilsack explained. "Last year we reduced premiums on corn and soybeans. We are studying data on wheat, sorghum, potatoes, cotton and rice to guarantee fair pricing and will order premium reduction when and where appropriate."
Keep pushing trade expansion
American producers need markets here and abroad.USDA's Foreign Agricultural Service operates 98 offices in 76 countries providing services to 163 countries. FSA will continue to use all tools available from trade shows to trade missions to market the America brand of ag products. It's a brand respected around the world for quality, safety and affordability.
"We want to build on our record of trade success of last three years," stressed Vilsack. "We want to push congress to repeal the Jackson-Vanick Act to hold Russia accountable under WTO. We not only want to take advantage of all these trade opportunities. But we also want to break down barriers that have been constructed, particularly in the area of beef ad biotechnology. Last year alone, even with reduced staff levels, we confronted over 1,400 barriers to free and open trade. And it's more than double the number of just 10 years ago. So we obviously need to keep our eye on trade barriers. "
Biofuels build U.S. demand
"Our work to expand markets should not be limited to foreign markets," Vilsack stated. "Significant opportunities exist here at home due to rising oil prices and uncertainty of foreign supplies. America needs the clean energy president Obama called for in his state of the union address. The nation needs a renewable fuels industry now more than ever. Over the last three years, we've reduced our dependency on foreign oil from importing over 60% of our oil to importing less than 50% now."
"We need to do more and USDA is prepared to help," he said. "Over the last three years we've established five virtual regional research centers dedicated to finding new feedstocks and more efficient ways to produce biofuels. Over the same period, we announced support to five new bio refineries and we are providing support to 235 advanced bio fuel producers. We have identified more than 50,000 acres in nine project areas for the production of new feedstocks, nonfood feedstocks. And we've funded hundreds of flex fuel pumps wind energy projects and anaerobic digesters. An innovative partnership between the navy, the Department of Energy and USDA holds the promise of a new industry to produce a drop in aviation fuel."
"When you combine this effort with the emergence of new ways to use crops, grasses, woody biomass and livestock waste to produce chemicals, polymers and fibers all across the United States, you can understand why I'm excited about the future of U.S. agriculture," he declared.