Vilsack hears concerns of young producers

Apr 10, 2009
Vilsack hears concerns of young producers

Craig Evans and Chris Hiley flanked Secretary of Agriculture Tom Vilsack at Evans’ farm last Tuesday as the two farmers explained their worries about the costs of being young farmers and ranchers.

Evans, 43, a third-generation livestock and grain producer, told Vilsack one of his biggest challenges included rising costs of inputs such as fertilizer and fuel. Higher operating costs translate to an immediate impact on the bottom line, Evans said. “In the last year, my operating costs, input costs, have gone up $125 an acre,” Evans said. “And for someone like me who borrows my money for operating expenses, that can add up to this year another $9,000 in extra interest. That’s 10 percent of my profit margin.”

Evans told Vilsack he was concerned about the push to regulate greenhouse-gas emissions and the potential that more regulations and demands on suppliers could further push up those costs.

“With all the talk about greenhousegas regulations and stuff, what kind of impact might that have on the future, because I’ve got fertilizer and fuel, and how will that impact my bottom line?” Evans asked the secretary.

Vilsack used the farm tour to highlight that USDA has released $17 million in educational grants under USDA’s Beginning Farmer and Rancher Development Program. Farmers and ranchers in the program will be able to access more resources such as mentoring and technical assistance.

“If you think about farming, as these families know, you don’t have a whole lot of control on your input costs—that’s dictated for you. You don’t really have a lot of control over the weather. You have very little control over markets,” Vilsack said. “And so it’s a difficult occupation and profession, but it’s very vital and important to the future of this country that we continue to maintain operations like these two farm families.”

Responding to Evans’ question, Vilsack said USDA is “very conscious of the views you just expressed.” Vilsack has been highlighting potential cap-and-trade plans as a potential positive for agriculture. While agriculture may account for 7 percent of the nation’s carbon footprint, Vilsack said agri culture can be seen as a possible solution to help reduce greenhouse-gas emissions.

Vilsack added that for the U.S. to be a leader, the administration will have to take some concrete plans to a United Nations summit on climate change next December in Copenhagen, Denmark.

“It’s complicated, but I think it’s important for agriculture to be at the table and continue to promote itself,” Vilsack said. Hiley, 35, said he is a cow/calf producer just starting out in the business. Hiley was mainly a farm hand until he and his wife bought 85 acres in 2003 to raise row crops.

The Hileys took out their first USDA loan in 2006 to buy 50 head of cattle to build their herd. Hiley said it has been hard to get established and rely on loans, but he said the USDA programs have been critical for his operation.

“Through a commercial bank with the interest rate, I just wouldn’t be able to make it go,” Hiley said. With credit tightening in some instances, Vilsack said it’s important for USDA to do more to help young and beginning farmers and ranchers. Vilsack noted that right now, the average age of U.S. farmers is 57, a number that steadily climbs with each new Agricultural Census. Meanwhile, the number of younger producers continues declining.

Evans also emphasized the importance of being able to tap low-interest loans. “With the amount of money we have to borrow, if we have one drought year, one bad year, it can put us back years and years to recover from that,” Evans said. Vilsack used that comment as a segue to point out that because of those bad years, USDA is working to have the rules out on the new SUpplemental REvenue Assistance Program, or SURE, by next fall. Vilsack also added that rules for the Average Crop Revenue Election program, or ACRE, will be out soon, but USDA is being cautious in implementing the program because they want farmers to understand it. Because ACRE is new and voluntary, Vilsack last week extended the signup for the direct and counter-cyclical programs to August so producers would have more time to understand ACRE once the rules are released. — Chris Clayton, DTN