Ag Secretary Tom Vilsack believes agriculture is at a “pivotal moment” in time as it wrestles with volatile commodity prices and record-high input costs.

Tom Vilsack

Tom Vilsack

And while USDA will continue its traditional focus on measures to reduce costs and build markets for farm products, it’s also promoting new climate-smart commodities as it attempts to rebuild the rural middle class.

Vilsack discussed the outlook and signed two agreements for USDA’s Partnerships for Climate Smart Commodities Program at Commodity Classic in Orlando, Florida. The annual event had a record attendance of more than 400 exhibitors and 10,000 visitors.

“We (at USDA) have to do more. The industry has to do more,” Vilsack said during his keynote speech. “We need to focus on additional income streams and create profit centers on each farm.”

Why alter the traditional method of selling farm commodities in bulk to end users?

“The last two years have been the best two years for farm income,” Vilsack said. “But, when you look deeper in the numbers, nearly 50% of farms lost money and another 40% made some money on the farm, but a majority of the money to support their families came from off-farm income, which means only the top 10% did well.”

USDA responded by investing $20 million in grants to modernize and expand fertilizer production capacity in the U.S. to lower and stabilize those input costs.

It also provided funding for 31 processing facilities — for products such as meat, dairy and eggs — to improve availability of those products to local consumers and boost rural economies.

But, looking ahead, Vilsack believes the main opportunities for ag and rural America revolve around “climate smart commodities.”

USDA’s Partnerships for Climate Smart Commodities Program is investing $3.1 billion in 141 pilot projects, as previously reported in FarmWeek. At Commodity Classic, Vilsack signed two of those agreements, which are focused on the expanded use of cover crops and the development of custom-based contracts for corn, soybeans, wheat and sugar beets to meet specific needs of end users.

Vilsack said farmers also have opportunities to expand renewable energy production through wind and solar projects and to enter various carbon sequestration contracts.

“That’s a new income source farmers didn’t have before. We’re excited about that,” Vilsack said of the emerging carbon market. “It’s a pivotal moment. We need some of these opportunities to remain viable.”

Another key opportunity for farmers is for the production of sustainable aviation fuel, which represents a 36-billion-gallon market.

“This is an opportunity to rebuild the rural middle class,” Vilsack added. “We’re not only focused on trade and providing a safety net, but we’re continuing to build more markets so small and middle-sized farms can benefit.”