- State of U.S. agriculture. “Our farm income is as good as it has been in the last eight years. We’ve had record exports,” Vilsack said at the start of his testimony. As lawmakers begin their work on farm bill reauthorization, he urged them to focus on fixing a particular issue: the rural extraction economy. It is the “heart of the challenge” that rural farmers have faced for a long time, the secretary said. “An extraction economy is where we … take things from the land and rather than convert them and adding value [to products] in the rural areas where the resources [are grown], they are transported long distances to where they are ‘value added’ in some other location where opportunities and jobs are created,” he said. He advocated a “circular economy” where wealth is created and stays in rural areas. “We learned during the pandemic that our system isn’t as resilient as we hoped it would be,” he explained. “A way to make it more resilient is to create local and regional opportunities. That’s one of the reasons we’re focused on expanding processing capacity at the local level, so our livestock producers have the choice of local facilities that create local jobs and allow revenue and wealth to stay in the community. Biofuels is one example, but there are a multitude of ways in which we can convert agricultural waste products into a wide variety of things beyond renewable energy and fuel, to include chemicals, materials, fabrics, fibers — again creating opportunities for farmers and additional income sources as well as rural jobs,” Vilsack detailed.
- WHIP+ payouts coming in April or May. Vilsack said farmers would likely see disaster relief payments for 2020 and 2021 losses in April or May. He said the payments would be provided in two tranches to accelerate an initial round of assistance. USDA is using data from the Livestock Forage Program to determine eligibility for payments to livestock producers. For other farmers, USDA is creating “pre-filled applications” with the use of data from crop insurance and the Noninsured Disaster Assistance Program.
- Dairy aid. Rep. Jim Costa (D-Calif.) pressed Vilsack on the 5-million-pound production cap associated with dairy market volatility aid and asked what could be done to ensure the limitation does not disadvantage larger producers who also sustained pandemic-induced losses. Vilsack explained the effort aims to help smaller producers impacted by divergent milk class prices, a problem he said was exacerbated by the Farmers to Families Food Box Program (FFFBP). He added that USDA is working on “a variety of other ways to help this dairy industry across the board.”
- Dairy pricing. Ranking Member GT Thompson (R-Pa.) said he was appreciative of discussions around reforming the Federal Milk Marketing Order (FMMO) and remarked “the system has long needed some improvements for dairy farmers.” He asked Vilsack if he would commit “to help the process along,” to reach a consensus across the industry on changes. Vilsack acknowledged that finding an industry consensus around any changes is key, noting that views differ across different states and regions. “I think that the industry is serious about this effort, and we will work collaboratively with the industry to try to improve,” he remarked, adding that the sector’s struggles are why USDA rolled out supplemental dairy margin assistance and volatility assistance through its pandemic aid effort and the new Dairy Donation Program (DDP).
- Climate and next farm bill. Noting that climate change is increasing periods of drought, Rep. Angie Craig (D-Minn.) asked Vilsack whether USDA could work with Congress to come up with a more comprehensive mechanism to tackle the issue in the next farm bill. Vilsack said USDA is currently focused on getting WHIP+ aid out the door but stressed that as lawmakers consider the next farm bill, they should ensure any new program is flexible and considers regional differences. “The reality is we’re so complicated in agriculture that we really need to create regional approaches that allow us to have some greater flexibility in the application of these programs,” he explained.
- Payments to hog producers. Vilsack was asked about the status of disbursements under the Spot Market Hog Pandemic Program (SMHPP) announced in December. Vilsack blamed delays on issues relative to eligibility requirements and said USDA is working to revise the application process. “We hope to get that done very soon and the expectation is, once we do, we hope to be able to see payments made sometime hopefully [in] the March timeframe.” Program signup runs until Feb. 25.
- Trade policy enforcement. Costa asked Vilsack what areas USDA is focused on in terms of trade enforcement. Vilsack touted the recent U.S. win in its challenge of Canada’s operation of its dairy tariff-rate quotas (TRQs), which he said will ensure they will now be implemented as intended. On Mexico, Vilsack said he and USTR Katherine Tai are working with their Mexican counterparts on several concerns including glyphosate and biotech approvals for corn. Vilsack said another priority is pressing China to meet unfulfilled commitments under the Phase 1 U.S./China deal, including closing a shortfall on purchase commitments. Overall, Vilsack said there are seven key areas that China has fallen short relative to its Phase 1 commitments, including purchases, biotech approvals, and several sanitary and phytosanitary (SPS) issues out of the 57 they committed to under Phase 1. “We’re pushing on both of those aspects — more purchases, completing the vital sanitary and phytosanitary requirements of that agreement,” he remarked.
- Supply chain and shipping issues. Vilsack discussed the administration’s actions aimed at addressing export challenges, including the problem of empty shipping containers being dispatched from U.S. ports. “We’re looking for ways in which we can utilize resources to fill those containers,” he said. On the trucking side, Vilsack noted USDA is working with the Department of Labor (DOL) to help address the shortage of drivers by expanding apprentice programs and encouraging states to speed the processing of new commercial drivers’ licenses (CDLs).
- Climate-smart ag. Rep. Austin Scott (R-Ga.) asking what authority USDA was relying on to tap an estimated $1 billion in Commodity Credit Corporation (CCC) funds for upcoming Climate-Smart Ag and Forestry (CSAF) pilot programs. CCC “in part is designed to provide for the promotion of commodities,” and CSAF is focused on helping farmers meet demand for climate-smart commodities, Vilsack explained. The authority to tap CCC for CSAF “falls under either section four or section five of the CCC [charter] and we are very confident that we have the capacity and ability to use this without jeopardizing any of the other needs or reasons for the CCC,” Vilsack detailed.
- Cover crop payments coming. Vilsack said USDA’s Risk Management Agency would be announcing “very, very shortly” a new round of payments to farmers who plant cover crops. USDA provided about $59 million to farmers in 2021 on about 12 million acres of cover crops.
- Regulatory actions. USDA is “encouraging the EPA to do what they are currently doing, which is to reach out to farm groups and farmers across the country to listen to concerns that they may have” about WOTUS, Vilsack said. USDA is also looking at ways to help producers once the new rules are set “in terms of providing assistance and how through our conservation programs to be sure that folks are in compliance.”
- Pork and poultry line speeds. Vilsack highlighted USDA’s Food Safety and Inspection Service (FSIS) new trial program started in November to again allow pork processors operating under the New Swine Inspection System (NSIS) to operate at higher line speeds. Many of the plants previously had waivers to operate lines faster but a federal court decision scrapped the waivers because it found the underlying rulemaking failed to adequately consider worker safety impacts. USDA is now working with nine businesses, and five have applied for a waiver, to allow for those speeds to again increase without sacrificing worker safety or farmer profitability.
- Livestock markets. Despite Biden administration suggestions meatpackers are engaging in anticompetitive behavior that harms farmers and subsequent Department of Justice (DOJ) investigations, there has been little to show for the effort, said Rep. Dusty Johnson (R-S.D.). Vilsack said DOJ actions have to “go through the process, before you can make a determination.” He pointed out that USDA and DOJ recently announced a joint effort aimed at facilitating the reporting of anticompetitive activities to help gather more information. Pressed on when producers can expect results from those moves, Vilsack said he did not have that information but promised to circle back with lawmakers after the session.
- P&SA rules and regs. Vilsack said USDA is taking separate action through its own information gathering initiatives and working to update Packers and Stockyards Act (P&SA) rules to aid in enforcement. He reiterated USDA is also examining “Product of USA” labeling rules, including a “fairly extensive survey to find out if consumers understand what that means, and whether they place value on it.”
- Input prices. Vilsack was asked what USDA is doing to help farmers facing surging prices for fertilizers and other inputs. The issue is in part a factor of global demand, coupled with a lack of domestic production capacity, Vilsack explained. Boosting domestic production and ensuring efficient use of fertilizer are key, he said, and USDA is looking for ways to compensate farmers that reduce fertilizer usage — pointing to the department’s new split nitrogen crop insurance program.
- Biofuels and RFS. Vilsack defended EPA’s proposed lower RFS levels for 2020 but added its 2021 and 2022 levels are the highest in history allowing for a continued projected growth. Vilsack also touted this administration has offered $700 million of additional pandemic assistance to biofuel producers and $100 million to expand access to higher blends.
- Electric vehicles. Rep. Mary Miller (R-Ill.) said her constituents are concerned about the Biden administration’s focus on electric vehicles and questioned if the administration has shown sufficient support for biofuels. In response, Vilsack reiterated the importance of the $700 million in pandemic relief and $100 million in infrastructure support that the USDA is offering to the biofuels industry, along with the impact of the EPA’s decision to reign in the SRE program. He also stressed that the Biden administration has also set an ambitious goal for sustainable aviation fuel (SAF). “There is a lot of conversation about electric cars,” Vilsack said, but stressed that cars with internal combustion engines will continue to remain on the road for the foreseeable future and will require the use of biofuels. Liquid biofuels will also continue to be necessary for aviation and marine transport. “We won’t see the elimination of [the biofuels industry] — we’ll see an expansion of it,” Vilsack said. “I’m excited about this industry and think the future is bright.” Rep. Michelle Fischbach (R-Minn.) expressed concern that the fact that biofuels reduce emissions is getting lost in the conversion on climate change and asked about the agency’s support for biofuels. “I am confident that I am one of the most ardent proponents of biofuels anywhere in this country and have been for years — decades,” Vilsack said in response, assuring the committee that biobased fuels remain a priority for the current administration.