Vilsack at USDA Stokes Farmer Optimism on Biofuels, China Trade

Source: By Kim Chipman, Bloomberg • Posted: Thursday, December 10, 2020

 

The prospect of Tom Vilsack returning to oversee U.S. agriculture is drawing praise from some farmers who are hopeful the former Democratic Iowa governor will be an ally on everything from biofuels and dairy to China and climate-friendly farming.

Vilsack is President-elect Joe Biden’s pick to lead the U.S. Department of Agriculture. If nominated and confirmed by the Senate, Vilsack, who served eight years under Barack Obama, would be one of the country’s longest-serving USDA secretaries.

The next agriculture chief will arrive at the USDA on the heels of farmers receiving a record $47 billion this year in federal aid to make up for losses tied to the pandemic and President Donald Trump’s trade war with China. The industry also is facing questions on the future of biofuels, food security and conservation at the same time Congress is set to begin grueling work on the next Farm Bill. Vilsack’s experience both in Washington and the Corn Belt is reassuring to some growers, even as he faces criticism from environmental and civil rights groups.

“Vilsack is a positive for agriculture,” said Dan Cekander, a fourth-generation corn and soybean farmer in central Illinois who voted for Trump in 2016 but backed Biden this year after disappointment in the current administration’s approach on corn-based ethanol.

Cekander though said he gives Trump credit for compensating farmers on trade and pandemic-related losses, as well as for having the “guts” to take on China.

Thorny Issue

A former two-term governor of the top corn-producing state of Iowa, Vilsack has spoken out against Trump’s Environmental Protection Agency over the thorny issue of whether some oil refiners should be exempt from annual biofuel-blending requirements. Vilsack has said the approach by Trump’s EPA has left farmers with excess corn, suppressing prices.

While the EPA has the lead role over such biofuel policies, “having Vilsack as agriculture secretary would only increase the odds that those small refinery exemptions go away and contribute to more ethanol use,” said Cekander, founder of DC Analysis, which focuses on helping clients with the grain market.

READ MORE: Ethanol Looks Beyond Trump-Biden Bluster to Biofuel Reset

Vilsack “knows that renewable fuel policy is essential to a strong agriculture economy,” said Randall Stuewe, chief executive officer of Darling Ingredients Inc., one of the largest producers of renewable clean energy.

Iowa Farmers Union President Aaron Lehman said that when Vilsack was a young lawyer he helped many farmers in the state keep their land during the agriculture debt crisis that led to wave of foreclosures during the 1980s.

“Having him in Biden’s Cabinet would be tremendously important in helping on trade issues and promoting biofuels,” Lehman said in an interview.

Corn, soybeans and wheat all rose on the Chicago Board of Trade Wednesday.

Front Lines

While it was important to address trade imbalances with China, it “put farmers on the front lines to bear the brunt of it and then try to pick up the pieces later. We would much rather be earning money from the marketplace than receiving a payment to make up for policies that have failed,” Lehman said.

Terry Reilly, a commodity analyst at Futures International LLC in Chicago, said Vilsack has a “great reputation in promoting U.S. agriculture goods to the international community.”

One global and domestic issue incoming administration officials will be tasked with addressing right away is climate change.

Cekander of DC Analysis said he’s interested in how the USDA might use theConservation Stewardship Program, which provides grants meant to help farmers and ranchers reduce their carbon footprints with more environmentally sound techniques, such as changing livestock feed. Trump has previously proposed eliminating the program.

Little Support

Not everyone is a fan.

National Black Farmers Association President John Boyd Jr. said his group, which has more than 100,000 members in 46 states, had a “tough time” with Vilsack during the Obama administration in getting support for legislation aimed at addressing discrimination against Black farmers. Boyd said if Vilsack leads the USDA again he should make racial justice issues a top priority.

Read More: ‘Jim Crow’ Land Ownership Spurs Black Farmers’ Appeals to Biden

Biden is said to have settled on Vilsack after also considering Ohio Representative Marcia Fudge, who would have been the first Black woman to lead the department.

Environmental advocacy group Friends of the Earth said in a statement it was “deeply disappointed” by Biden’s selection of “an agribusiness lobbyist with a tarnished record on civil rights, consolidation, and the environment.”

Immediate Issue

The most immediate issue for all agencies though will be dealing with the ongoing devastation of the Covid-19 outbreak, which has put a spotlight on food safety and security.

“We would urge Vilsack to expand nutrition assistance programs in order to ensure that millions of individuals who are facing unemployment and food insecurity are able to meet their most basic needs through the pandemic,” National Farmers Union President Rob Larew said in a statement.

Vilsack would likely return USDA’s focus back to traditional food assistance programs and away from Trump’s “Farmers to Families Food Box” initiative, Lucas Fuess, director of dairy market intelligence at HighGround Dairy, said by email. That program began in May to help provide milk and food to those in need as farmers saw production sharply drop during the first wave of the pandemic.

Some critics argue the Trump program falls short compared with more cost-efficient, traditional USDA nutrition programs such as the Supplemental Nutrition Assistance Program, formerly known as food stamps.

Vilsack’s current role as head of the U.S. Dairy Export Council has given him a “front-row seat” in seeing how the pandemic has revealed the strengths and weaknesses of the country’s food system, American Farm Bureau President Zippy Duvall said in a statement.

Duvall also praised Vilsack for his “reputation for rising above partisanship” and being open to all types of agriculture production.

“Tom Vilsack understands that the agriculture sector is far more complex than most people understand.”

–With assistance from Justina Vasquez, Michael Hirtzer and Mike Dorning.

To contact the reporter on this story:
Kim Chipman in Chicago at kchipman@bloomberg.net

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