Ag Secretary Tom Vilsack says farmers face several challenges
— -- Agriculture Secretary Tom Vilsack, 58, talked to USA TODAY reporter Sue Kirchhoff about the farm economy, President Obama's budget and troubles plaguing the fledgling ethanol industry. Excerpts from the interview have been edited for content and clarity.
Q: Can you assess the farm economy? Prices for corn, wheat, dairy and other products have dropped in recent months, while production costs have remained high.
A: In 2008, we saw substantial increases in farm income, exports early in the year, continued strength of the renewable fuels industry. Let's take it to 2009: Almost all the commodities across the board have seen a decline in pricing, some more severe and more dramatic than others.
We're dealing with issues in dairy, pork, walnuts; there are invasive species issues in citrus that are impacting, potentially, yields, and there is drought in California and Texas. … There is also concern in the renewable fuel industry, because ethanol production facilities, biofuel facilities are operating on relatively slim margins, if they have any margins at all.
The one saving grace, to the extent that there is a saving grace in these difficult economic times, is that the farm community, generally speaking, is far less leveraged than the general population or other businesses and industries. … For every dollar in debt, farmers and ranchers have $9 of equity or assets. That's (substantially better) than in the last farm crisis in the '80s, when we lost a lot of farms.
Q: What is the USDA strategy?
A: We're buying butter, we're buying non-fat dry milk … 207 million pounds of (dairy), which is a lot.
(Another focus is) how do you help create markets for products? Our focus here has been on renewable energy, encouraging the (Environmental Protection Agency) to consider an adjustment to (rules on the amount of ethanol that can be blended with gasoline) so that more ethanol is required, therefore, more ethanol will be sold.
Q: What will you do with dairy purchases?
