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John Block: Ag Day

By former USDA Secretary John R. Block

Last week was Ag Day. In fact, it was an Ag Week. Agri-Pulse had a panel of speakers talking about one of our industry’s biggest challenges – how do we communicate about our industry today? Very few people know anything about the business of producing food. We can’t produce enough food without new technology. And that includes genetic engineering. We could farm like they do in Africa where, in some countries, the cost of feeding a family eats up 80% of family income. In the U.S., the cost is less than 10%.

Ag Day is an opportunity to celebrate the remarkable contribution American agriculture makes to this country and the world. We enjoyed a beautiful dinner which was held in the atrium of the U.S. Department of Agriculture. Secretary Vilsack has been a strong supporter of GE. I felt very much at home at USDA with a room full of ag friends. John Deere, Monsanto, Future Farmers of America, cattle and pork producers, and Orion Samuelson serving as MC.

We have a lot to be proud of. Just one farmer in this country produces enough food to feed 155 people – amazing. At the same time, it is a problem because so few people understand farming. We produce so much food and do it with less crop acres than 40 years ago. That’s precision farming. Besides feeding so many people, 10% of our gasoline comes from farms – ethanol.

As good as we are, we constantly face unpredictable devastating challenges every year. We can’t control the weather. Look at the terrible drought in California. Three years ago, a drought in Texas, Oklahoma, and New Mexico forced ranchers to sell their cattle. They didn’t have the feed. Surplus production and weak demand can drive down prices. Net farm income this year is projected to be at a 14-year low – the lowest since 2002. This year’s farm income will drop to $54.8 billion – a 56% plunge from the 2013 high of $123 billion. Animal and crop receipts are headed down this year.

There are some positive signs. Debt to asset ratio (13%) is relatively low, and interest rates are very low. I remember in the early 1980s when I was Secretary of Agriculture, interest rates hit 15% to 18%. The cost of money was killing us.

Farming has always been a roller coaster and we will ride this one to a better day.

John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill.  If you would like to review his radio shows going back more than 20 years, visit johnblockreports.com.

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