Secretary of agriculture visits World Dairy Expo

Editor’s Note: This article is part one of a two-part series covering the Global Dairy Summit that took place at this year’s World Dairy Expo.

MADISON, Wis. — Dairy enthusiasts from across the world gathered for the industry’s largest show of the year Oct. 1-4 in Madison. World Dairy Expo attracted political figures as well, including Secretary of Agriculture Tom Vilsack.

Vilsack visited Expo grounds Oct. 4 to provide closing remarks at the Global Dairy Summit — an event hosted by the Wisconsin Department of Agriculture, Trade and Consumer Protection. The purpose of the summit was to offer insight into the dairy economy, provide an industry outlook and highlight potential marketing opportunities.

“I know two things about farmers,” Vilsack said. “You love what you do, and you want the opportunity to pass your operation onto the next generation. At (the U.S. Department of Agriculture), we’re committed to making that happen. I appreciate everything dairy farmers do for this country.”

Vilsack expressed optimism about the all-milk price, which stands at $23.05 and is forecasted to reach $23.45 by 2025.

“That will make it the third highest milk price ever,” he said.

Furthermore, the milk-to-feed price ratio is 1.67, which Vilsack said is the best in over a decade.

Cheese exports are also the highest they have been in 10 years. High-protein whey exports are also going up, and Vilsack said he expects this year to be the third highest export year for dairy products.

“The future of exports for dairy is bright,” he said. “(U.S. Dairy Export Council) is looking beyond our traditional trading partners, and I think we’re going to see less reliance on some of the traditional export markets with an array of opportunities for high value-added products going into places like Vietnam and the Philippines.”

Kenya and other African nations and Latin America are places where tariffs are coming down and opportunities are expanding, Vilsack said.

Vilsack made a point of addressing a comment made by former U.S. Secretary of Agriculture Sonny Perdue during a visit to Expo in 2019, when he spoke about the status of small and mid-sized dairy operations.

“At the time, he was very truthful and challenged all of us,” Vilsack said. “Perdue said, ‘The way this is set up, unfortunately you have to get big or oftentimes you have to get out.’ We took this as a challenge and asked, ‘Is there a way we can create a different model?’”

Vilsack made the case for small-town rural America and its connection to agriculture.

“Small and mid-size operations are not only important to agriculture, they’re really important to rural communities,” Vilsack said. “If you lose farms, you lose the farm family. And when you lose the farm family, you lose students in schools, and schools have to merge. Businesses that surround those people close, and that impacts the economies of those small towns. You undercut an important part and capacity of America.”

Creating opportunities to profit small and mid-size operations is the goal Vilsack said. He said this cannot be in the form of support programs, but rather, what is needed is a new and creative model in which farm families can have more than one source of income on their operation. He said the USDA has attempted to create income sources beyond milk.

“Can we pay farmers not only for what they produce but also how they produce it?” Vilsack said. “We’ve invested and will continue to invest in resources under our climate-smart agriculture commodity initiative which started with the dairy industry.”

The idea behind Partnerships for Climate-Smart Commodities is that farmers should be paid to participate in climate-smart agricultural activities and be rewarded for that with a market premium. The USDA has such projects with Edge Dairy Farmer Cooperative and Organic Valley.

“They are helping pay farmers to embrace climate-smart agriculture and in turn create opportunities for that profit margin to be a little bit wider,” Vilsack said.

More than 100 contracts have been signed involving all 50 states and every major livestock and commodity produced in the U.S., helping to incentivize 200 climate-smart practices.

“We’re measuring and monitoring the environmental results of those practices which has set up the opportunity for those farmers to benefit from ecosystem markets,” Vilsack said.

The USDA has invested resources under its Rural Energy for America Program to help producers create an energy source through renewable natural gas projects. Utilizing a digester or other strategies to convert manure into something more valuable is the premise behind this program.

Instead of one income source, farm families could now have several income sources under this new model, Vilsack said.

Through the Natural Resources Conservation Service, the USDA has provided $2.5 billion to the industry to help smaller and midsize producers adopt conservation practices as part of the Environmental Quality Incentives Program. EQIP contracts currently number 3,700.

There is also an $85 million investment to expand opportunities in the organic market.

In addition, the USDA is encouraging the development of local and regional food systems, which Vilsack said is a better deal for farmers. When selling a product commercially, farmers get anywhere from 15-20 cents of that food dollar. But when they sell directly to the consumer, such as at a farmers’ market or to a school, the farmer can potentially generate 50%-75% of that food dollar, Vilsack said.

“We’re investing in expanding these systems through a producer value-added grant program and local food purchasing agreements,” he said. “We’re directing a portion of that money be spent with local and regional food opportunities so that small and medium-sized operations get a bigger bang for the buck.”

An investment of $1.7 billion across 50 states was recently announced for the program.

The USDA has been heavily involved in procurement of dairy products, Vilsack said, and is purchasing food for schools and the Special Supplemental Nutrition Program for Women, Infants and Children. From 2021-24, they invested about $12.5 billion in these programs to purchase dairy products.

Vilsack also spoke about the farm bill. He said there is a focus and desire on the part of some to increase reference prices for producers. These prices impact about 22 commodities out of over 100 grown and raised in the U.S.

“Within those commodities are about half a dozen that would actually benefit what’s gone through the ag house committee,” Vilsack said.

This has not been put up for a vote because it probably would have failed, he said.

“When you look at the farm bill, there isn’t enough money in the way in which the bill was crafted to pay for all the increases,” Vilsack said. “There’s a deficit, and when you have a deficit, you lose votes.”

The secretary stressed urgency in getting a new farm bill passed.

“If it doesn’t get done now and rolls past Jan. 1, you have major challenges because you have to start all over again with a new administration and a new Congress,” Vilsack said. “The goal is to try and get this done.”

Vilsack concluded by again speaking on the USDA’s efforts to save the family farm.

“We are betting on and believe in this industry and the importance of this industry,” Vilsack said. “We believe if we can continue to do this over time, we begin the process of reversing the decline of small and mid-size dairy operations in this country.”