Vilsack Stresses Long-Term Farm Income as 2015 Forecast Worsens

Source: By Ellyn Ferguson, CQ • Posted: Thursday, February 12, 2015

Agriculture Secretary Tom Vilsack said the agriculture sector remains strong despite a forecast that 2015 net farm income will be 32 percent lower than previously projected.

He may have to make that point when he appears before the House Agriculture Committee this morning to answer questions about implementation of the massive 2014 farm bill (PL 113-79) and the state of the rural economy.

“A couple of years ago we had the best of all worlds from the standpoint of income, where prices were high and many producers, despite drought, were able to produce significant crops and there were still direct payments,” Vilsack told reporters Tuesday.

The Economic Research Service forecast Tuesday a six-year low for net farm income in 2015. Farmers’ net income for 2015 is expected to be $73.6 billion.

Putting Things in Context. Vilsack said the 2015 net income forecast is still 12 percent above the 10-year income average. He noted that farmers are not carrying excessive debt since many of those who upgraded equipment or expanded during the boom year paid cash.

He also noted that median farm income is up, unlike median household income.

“I don’t want people to extrapolate from net income and net cash forecasts that we’re in dire straits and we’re not. We had a near record year for biofuels [production]. We had a near record year for exports. We’re above the 10-year [net income] average,” he said.

Moran Looks Ahead. The new chairman of the Senate Agriculture Appropriations Subcommittee is still mulling the schedule for his panel. Jerry Moran, R-Kan., tells CQ Roll Call’s Tamar Hallerman that he plans to “to be very active and very busy” with subcommittee hearings. That would be a marked change from the most recent Congresses, where the panel met two or three times per year.

“I have a very long list of interests,” Moran said, citing the Food and Drug Administration, agriculture research, conservation and wildlife practices and the international Food for Peace aid program.

House and Senate appropriators took on school nutrition standards in what became the fiscal 2015 “cromnibus” (PL 113-235). Moran said he expected the Agriculture Committee, led by Pat Roberts, the senior Kansas senator, to address changes to the child nutrition law (PL 111-296) during reauthorization efforts this year.

“I generally think we’ll try to fill in the gaps where the Ag Committee has not staked out a position. My guess is that if that issue is pursued, it is going to be pursued in Ag,” Moran said.

Monitoring Nutrition Waiver. Moran cited strong interest in the law among Kansas school nutritionists and said he would keep an eye on a cromnibus policy rider that could delay a bigger reduction in school meal salt levels scheduled for 2017 and directs the Agriculture Department to devise a waiver process for schools struggling with the 100-percent whole grain requirement.

Energy Aid. Vilsack announced $80 million in new grant money and a year-round application process for $200 million under the Rural Energy for America Program. Vilsack told reporters the mandatory funding provided through the 2014 farm bill (PL 113-79) will provide stable funding to help farmers and businesses in rural and small towns afford more energy-efficient equipment and systems.

Jennifer Womble, owner of James Super Save Store in Arkansas, and nursery grower Jeffrey Marstellar, who operates Cozy Acres Greenhouse in Maine, joined Vilsack on the call. Womble got more than $137,000 in a grant from the program to buy more efficient equipment after losing her store to a fire. She says the equipment shaved 32 percent off her energy costs. Marstellar used the grant to install a 30-kilowatt photovoltaic system and a 10-ton geothermal system in a new a 3,000 square-foot greenhouse that does not produce greenhouse gas emissions.

The maximum grant amount is $500,000 and the maximum loan amount is $25 million.