Latest / AG Bull / Wiesemeyer's Perspectives | Stephen Vaden Deputy Secretary of Agriculture, State of Ag

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Wiesemeyer's Perspectives | Stephen Vaden Deputy Secretary of Agriculture, State of Ag · AG Bull

0:09
SPEAKER_01: Welcome back to the EggBull Podcast.
0:11
SPEAKER_01: Egg Bull Trading.
0:12
SPEAKER_01: This is Tommy Grossofi, and this week on We Smeyer's Perspectives, we have a special, special show.
0:19
SPEAKER_01: We have someone who you always ask questions.
0:22
SPEAKER_01: I see everyone asking questions.
0:24
SPEAKER_01: If I got to talk to the USDA, I'd say this or that.
0:26
SPEAKER_01: Well, here's your chance because Jim has a wonderful list, and we have just a man to ask them and then answer him.
0:34
SPEAKER_01: And I got a feeling you're gonna like this one because from what I understand, I'm just joking here before he doesn't hold back.
0:40
SPEAKER_01: So I'd proudly introduce Stephen Vaden, Deputy Secretary of VAG.
0:45
SPEAKER_01: Welcome to the show.
0:46
SPEAKER_01: Glad to be here.
0:47
SPEAKER_01: Thank you for having me.
0:49
SPEAKER_01: Absolutely.
0:50
SPEAKER_01: Should we start with the questions?
0:52
SPEAKER_03: Well, first, I want to say thank you, you know, Secretary Vaden.
0:56
SPEAKER_03: And over the decades of covering USDA, your position to me has always been the glue that holds the department together.
1:05
SPEAKER_03: And I think legitimately so, because the secretary has to go out and give a lot of speeches.
1:11
SPEAKER_03: And you're the person who's there a lot, right?
1:13
SPEAKER_03: And so that's why that's why I've learned over the uh many, many decades, I I like to know and listen to the deputy secretary.
1:24
SPEAKER_03: And we're gonna begin with at least inform country.
1:27
SPEAKER_03: Tommy and I was just out near Peoria at the Strom farm yesterday.
1:32
SPEAKER_03: And of course, with the war with the Iran, the oil prices, but the fertilizer prices.
1:38
SPEAKER_03: And where uh you know, can you give us an update on on the investigation if you can?
1:44
SPEAKER_03: Like what's the parameters?
1:46
SPEAKER_03: And and you've previously uh you know described companies like Nutrient and Mosaic as a duopoly influencing the supply and and prices.
1:57
SPEAKER_03: So if you if you can develop that, you know, Deputy Secretary, I'd appreciate it.
2:02
SPEAKER_02: Absolutely.
2:03
SPEAKER_02: And I I made those comments not to hear my own self speak, but because I think they reflect the condition of the marketplace.
2:11
SPEAKER_02: When you have any two companies in any sector that you can think of that have 90% market share combined in some of those sectors, I believe duopoly is the only term that is adequate to describe what's going on there.
2:25
SPEAKER_02: I think it's simply a fact.
2:27
SPEAKER_02: And what we have seen in the fertilizer marketplace, whether we're talking about phosphates, nitrates, or anything in between, is we have had at this point now multiple years in a row of high prices, abnormally high prices.
2:43
SPEAKER_02: Price is the clearest economic signal.
2:46
SPEAKER_02: If something's price is high, the market is indicating we need more of that.
2:50
SPEAKER_02: If something's price is low, the market's indicating the opposite.
2:54
SPEAKER_02: We need less of that.
2:55
SPEAKER_02: And yet, despite these years and years of high prices, we haven't seen meaningful new supply come in to the American market.
3:06
SPEAKER_02: And that's not what economics would tell us should happen.
3:10
SPEAKER_02: And so the question is, why is that the case?
3:14
SPEAKER_02: And I believe it has something to do with the fact that it may be to these companies' interests to enjoy their outsized profits by not providing additional supplies to the market, which would lower the price.
3:28
SPEAKER_02: But I'm thankful, Jim, that some other companies have watched this market and they're willing to jump in with their own money, including making substantial investments, such as the one that I've talked about in Canada, where a private mining company that, though quite experienced in digging things out of the ground, has never been involved in the fertilizer business.
3:50
SPEAKER_02: And yet they have sunk 13 billion US dollars of their own money, this isn't government money, into a project that will result in there being new fertilizer supply, particularly potash, in America, beginning, unfortunately, not this year, but next year.
4:08
SPEAKER_02: And so when you see that type of market signal, that a an experienced, deep pocketed company that's not currently involved in the fertilizer industry looks at the current market dynamics and says, you know what?
4:25
SPEAKER_02: I'm willing to sink$13 billion of my own capital to enter this market because my market analysis tells me that the returns that I will get will be worthwhile.
4:38
SPEAKER_02: That only to me increases the level of questioning that needs to happen of the market incumbents.
4:45
SPEAKER_02: Why haven't they done that?
4:47
SPEAKER_02: This is a new market entrant that I'm speaking of in Canada.
4:51
SPEAKER_02: The incumbents have been in this market for decades.
4:54
SPEAKER_02: Theoretically, they would have a much lower cost to expand their supply.
4:59
SPEAKER_02: They're already involved in this industry, and yet they haven't.
5:03
SPEAKER_02: And so when I it's looking at facts like that, which have led me to ask public questions, and I'm glad to see as a result of the president's executive order that has charged USDA, along with working with the Federal Trade Commission and the Department of Justice, that these questions are going to be asked of these companies.
5:20
SPEAKER_02: And I look forward to hearing their answers.
5:23
SPEAKER_03: What is the particular name of the Canadian company?
5:26
SPEAKER_03: Can can you inform it?
5:28
SPEAKER_02: Well, it's actually not a Canadian company.
5:30
SPEAKER_02: It's an Australian company known as BHP.
5:33
SPEAKER_02: They are a mining company that has been in business for 140 years.
5:38
SPEAKER_02: They were last in the news when they were part of the announcement that the president of the United States made on the visit of the Australian prime minister to help increase our access to critical minerals from countries that are friendly to us as opposed to hostile to us.
5:55
SPEAKER_02: And in meeting with them as part of that visit, I came to understand about this investment that they've made and I've taken a special interest in it.
6:04
SPEAKER_02: And I'll say, Jim, I can talk about this investment publicly because it is public.
6:09
SPEAKER_02: BHP is a public company.
6:11
SPEAKER_02: They have to report to their shareholders.
6:13
SPEAKER_02: There are other companies, including some that have plans to produce more fertilizer domestically in the United States, that have come to me following my public comments.
6:24
SPEAKER_02: I can't talk about those proposals openly currently because they're still in the development stages, although soon to strike.
6:33
SPEAKER_02: I want to respect their ability to be able to carry out their plans in a way that will provide more fertilizer for the American farmer while at the same time providing a respectable return for their owners and shareholders.
6:47
SPEAKER_02: And they have the right to make the announcement when this project is going to go forward and when it's going to open up.
6:54
SPEAKER_02: But when I see all of these different companies that are either not market players or very small market players sinking huge sums of money into following the market signals that we have seen from the price of fertilizer over the past several years, it all leads back to the incumbents and the question that I began with.
7:17
SPEAKER_02: Why haven't they?
7:19
SPEAKER_02: When it should be cheaper for them to do so.
7:22
SPEAKER_02: And so, you know, I've heard from Nutrian.
7:25
SPEAKER_02: I've actually talked to the CEO of that company a couple times.
7:29
SPEAKER_02: I was gratified by their announcement regarding their believing that we don't need a countervailing duty order to let the current countervailing duty order expire.
7:39
SPEAKER_02: I welcome Morocco on Morocco.
7:41
SPEAKER_02: Correct.
7:42
SPEAKER_02: I welcome that announcement.
7:43
SPEAKER_02: I think most American farmers welcome that announcement.
7:46
SPEAKER_02: I hope Mosaic will come out and say the same thing.
7:50
SPEAKER_02: Because if a company the size of Nutrion that has the experience in this market believes that there is no need for this order, and I want to say I think that that's that's a proper way of looking at it.
8:03
SPEAKER_02: Why would Mosaic need the order?
8:05
SPEAKER_02: In particular, since they, through their non-investment in new sources of fertilizer, have stirred up new competition for themselves because they've set on their hands when the market price has clearly been demanding more supply.
8:19
SPEAKER_03: Yeah.
8:20
SPEAKER_03: Several follow-ups on these on these companies wanting and willing to invest in the in the U.S., are there tax incentives either available now or potentially in the future?
8:32
SPEAKER_03: What about accelerated permitting process?
8:35
SPEAKER_03: What does the Trump administration, I know with Doug Bergum, he's helped in other areas.
8:40
SPEAKER_03: Is that a possibility, at least at the federal level?
8:44
SPEAKER_03: And then the state level is always something else.
8:47
SPEAKER_02: Well, you're right about that, Jim.
8:49
SPEAKER_02: When I talk to any company about any project, whether it be fertilizer or some other type of intensive development, frequently what I hear is that they're very happy comparatively with our federal level.
9:04
SPEAKER_02: We in the Trump administration, we're committed, and I've committed to every company that's come to us with a proposal to provide American farmers more supply.
9:13
SPEAKER_02: If there is a hurdle and it's federal in nature, you call me up.
9:18
SPEAKER_02: We will work on it.
9:19
SPEAKER_02: We will get it out of the way.
9:21
SPEAKER_02: We want your project to succeed on behalf of the American farmer and on behalf of your shareholders.
9:27
SPEAKER_02: But frequently, what I hear when I talk to these companies is that, you know, we're not so much worried about the federal level, we're worried about the state and local.
9:35
SPEAKER_02: That's where the headache is.
9:36
SPEAKER_02: I was recently talking to the head of a chemical company, and he was explaining to me that they had been trying to develop new manufacturing capacity in a state that, if I was able to share with you the name of it, you would think that this is a state that's known for its deregulatory, business-friendly atmosphere.
9:55
SPEAKER_02: And yet this state has tied up this particular company for the past several years in regulatory tape that has slowed their ability to bring their production facility online.
10:05
SPEAKER_02: So every level of government has a job to do.
10:08
SPEAKER_02: But at the federal level, we are very much committed from the top down.
10:13
SPEAKER_02: We want more supply in the United States, we want more production in the United States, and we're going to do everything we can to get the red tape out of the way.
10:20
SPEAKER_03: And that brings up the role of governors.
10:23
SPEAKER_03: Can can uh the uh Trump administration, even President Trump, at least uh put some pressure on the governors or at least request accelerated permitting process in that regard.
10:35
SPEAKER_03: Is that a possibility?
10:36
SPEAKER_02: Well, that's why I've asked for these people with regard to fertilizer projects that want to make a go of it domestically, if you run into any hurdles, let Secretary Rollins and I know we are more than happy to call our partners in the state.
10:50
SPEAKER_02: And I have every confidence that if we were called on to do that, that those governors would feel the same way that we do because they want jobs in their state and they'd help get the bureaucracy out of the way.
11:01
SPEAKER_01: Deputy Secretary, when you say let you and the the head of the USDA know, how does one get a hold of you?
11:10
SPEAKER_01: I mean, it's not like you're just giving out your cell phone number.
11:12
SPEAKER_01: What's the best way for the American farmer, rancher, or anyone in agriculture to let you know?
11:17
SPEAKER_02: Well, I'm on Twitter.
11:19
SPEAKER_02: And I I get a lot of tips by looking through social media because that is how people communicate nowadays.
11:28
SPEAKER_02: As a matter of fact, I was on a plane flight from New York City out to California to speak at the American Farm Bureau Federation's recent conference.
11:38
SPEAKER_02: And on that interminably long flight across the country, I was scrolling through social media and came across what was going on in Arkansas and Oklahoma with regard to this judge's wrong-headed decision on the Illinois River watershed.
11:52
SPEAKER_02: And before I landed, I had messages out to my friends in Farm Bureau.
11:57
SPEAKER_02: I want to meet with the Farm Bureau presidents while I'm on the ground from Arkansas and Oklahoma to hear what's going on and see if there's a role for the federal government here in trying to set things right and make certain farmers don't suffer.
12:09
SPEAKER_02: And so please let us know.
12:12
SPEAKER_02: We have tip lines available on our website.
12:15
SPEAKER_02: And I've even tweeted out if you want a meeting with me, and we take meetings every day that I'm in Washington, DC, please send my assistant Gabrielle Rossi a message and we will sit down with you.
12:29
SPEAKER_02: It's quite frankly, it's through interacting with people who actually have dirt under their fingernails that the secretary and I know what's on people's mind.
12:38
SPEAKER_02: And to get back to where we started, why do we discuss input prices?
12:42
SPEAKER_02: It's because it doesn't matter whether I'm in my home state of Tennessee, Nebraska, Kansas, out on the West Coast, or somewhere in between.
12:51
SPEAKER_02: There isn't a farmer who doesn't bring it up.
12:54
SPEAKER_02: And I think they've got a point.
12:56
SPEAKER_02: And so we're looking into it for that reason.
12:59
SPEAKER_03: On the Morocco case, can you give us a timeline of how long this review will last or typically last?
13:07
SPEAKER_03: And can it be accelerated if there's an agreement that to either temper those uh tariffs or eliminate them?
13:15
SPEAKER_03: What's the timeline?
13:17
SPEAKER_02: Well, there's one thing I want to point out at the outset.
13:20
SPEAKER_02: This countervailing duty order was nothing of President Trump's doing.
13:25
SPEAKER_02: This countervailing duty order came into play early in 2021.
13:30
SPEAKER_02: Every five years under the law, there is a required review of any anti-dumping or countervailing duty order.
13:39
SPEAKER_02: That is what has begun now.
13:41
SPEAKER_02: And this order did not come about because of Section 232 or Section 301 or any presidential specific authority.
13:49
SPEAKER_02: This came about through the normal bureaucratic process whereby a company files a petition claiming harm before the International Trade Commission and the Department of Commerce, and the bureaucrats there look at it and adjudicate it.
14:04
SPEAKER_02: And I first came across this when I was a federal judge on the Court of International Trade.
14:10
SPEAKER_02: My opinions reversing this order twice are public, and you can read at more length than you would probably want to.
14:17
SPEAKER_02: My frank thoughts on the analysis that the bureaucrats did of this particular of this particular order, which I think was quite shoddy, and now it's up for review.
14:28
SPEAKER_02: The review timeline is actually set by statute, and it's pretty strict.
14:33
SPEAKER_02: Parties have between now and early April, and it's open to the public to file comments expressing their views on the current state of the fertilizer market in the United States.
14:46
SPEAKER_02: And part of the question that the International Trade Commission will be charged with determining is five years later, are American domestic fertilizer producers being harmed by unfair foreign competition?
15:01
SPEAKER_02: And I can already hear the farmers who are watching this laughing at the thought of anyone asking that question, given the prices they're being asked to pay for fertilizer.
15:10
SPEAKER_02: And I hope that that any group that has an interest in this proceeding will do what the proceeding is meant to do, participate in it, and state their views on what the current state of the fertilizer market is in the United States and what it means for its incumbent participants.
15:27
SPEAKER_02: And I would submit that given one of the biggest participants in that market, Nutrion, has publicly indicated, no, we don't need this order, that's probably a pretty good indication of uh whether there's any need for this order going forward now that it's about to expire.
15:45
SPEAKER_03: So by by early April, you said.
15:49
SPEAKER_03: And then after that, then an announcement is made?
15:52
SPEAKER_02: Well, no, after that, because you know, we have to give everybody a chance to reply to what people said, and then there's an opportunity for a public hearing and what have you.
16:01
SPEAKER_02: Okay.
16:01
SPEAKER_02: But long story short, Jim, by late the summer or or early fall, the International Trade Commission is going to be required to issue a decision on whether or not this order should continue.
16:12
SPEAKER_02: And it will, its members will vote and the majority will carry.
16:17
SPEAKER_02: And then if someone disagrees with the decision, they can sue and go back to the Corner of International Trade and ask them to investigate it.
16:24
SPEAKER_02: But we unfortunately, this process will not completely play out.
16:29
SPEAKER_02: That is, unless the parties voluntarily agree to drop the order, as one has already asked them to do.
16:35
SPEAKER_02: If the process goes its full length, it will not be able to be completed before farmers have their fertilizer needs have passed for this growing season.
16:44
SPEAKER_02: But before next growing season, we will definitely have an answer as to whether or not this order is going to continue if one party wants to continue to have the order in place and have it later.
16:56
SPEAKER_03: That's the timeline I wanted.
16:58
SPEAKER_03: And you mentioned pricing several times.
17:01
SPEAKER_03: And I know this is not a surprise to you.
17:03
SPEAKER_03: Farmers, whoever I talk with, say we need more pricing transparency.
17:08
SPEAKER_03: I'm surprised that there's no more general information about the pricing.
17:13
SPEAKER_03: It's it's hit or miss.
17:14
SPEAKER_03: Is there any efforts in that vanguard to establish a consistent price transparency in the fertilizer sector?
17:23
SPEAKER_02: You know, from my point of view, Jim, the best price transparency comes when we have a truly competitive marketplace where multiple companies are competing and thereby bidding for your business.
17:36
SPEAKER_02: We don't currently have that from my point of view.
17:39
SPEAKER_02: There are not enough competitors in the fertilizer market space.
17:43
SPEAKER_02: I think as more new market entrants come, we'll get better price transparency because we won't just have two main companies basically setting the price.
17:53
SPEAKER_02: I mean, it is it is public in the court documents from the case that I adjudicated when I was on the Court of International Trade that there were statements in the record before the International Trade Commission from experienced fertilizer traders at the Port of New Orleans, where many such fertilizer imports come in, that these two domestic companies and Mosaic in particular sets the price.
18:18
SPEAKER_02: And everybody just follows what Mosaic does because it's the Bohemoth.
18:22
SPEAKER_02: Now they're not going to like that I said that, but if you don't, if you don't trust that that's what they said, thanks to me, these documents are now public because the commission and some of the participants tried to hide them from the public, actually took it up to the appellate court to try to keep them secret.
18:39
SPEAKER_02: And the appellate court said, absolutely not.
18:41
SPEAKER_02: These aren't secret documents.
18:43
SPEAKER_02: These are public documents.
18:44
SPEAKER_02: The public should see them.
18:46
SPEAKER_02: You can now go on to the court's website.
18:48
SPEAKER_02: You can look through those documents.
18:49
SPEAKER_02: You can look through my opinion summarizing them if you don't have that time.
18:53
SPEAKER_02: And you'll see these statements in the record saying that, you know, that's how the prices are set.
18:58
SPEAKER_02: And so we need more market participants so we can have a real market.
19:03
SPEAKER_02: And excited to say that it looks like next year we'll get more market participants and we'll find out what the proper price of fertilizer starts to need to be.
19:12
SPEAKER_03: Good.
19:12
SPEAKER_03: That's the parallel pricing problem, right?
19:15
SPEAKER_03: If you only have a few participants, everybody follows, you know, the legal.
19:21
SPEAKER_02: The legal term for that in antitrust law is conscious parallelism.
19:25
SPEAKER_02: That is the fancy lawyer lingo for what you just described.
19:30
SPEAKER_01: Hey, Jim and Deputy Secretary of Egg, I feel like Jim, like we're watching a few good men, and Jim just asked you, Did you order the code red?
19:38
SPEAKER_01: And you said, You're damn right I did.
19:43
SPEAKER_03: Well, unless you have one Tommy follow-up, I think this is the he he he broached this subject quite well of what farmers have been asking us for months.
19:53
SPEAKER_03: And now we're we're waiting for some decisions to be made.
19:57
SPEAKER_01: Let's do it with the easy questions next.
20:00
SPEAKER_03: No, the the you know, trade with China.
20:03
SPEAKER_03: Of course, that's always important.
20:05
SPEAKER_03: We've had some uh trade officials going to go meet in China or with China their China uh uh counterparts, secret uh Treasury Secretary Bessant has uh frequently talks about this, and he clearly is signaling he wants additional U.S.
20:21
SPEAKER_03: soybean sales to uh uh uh China.
20:24
SPEAKER_03: Can you tell us any more about this?
20:26
SPEAKER_03: The March 31 to April 2nd, at least current visit now of our president in in China.
20:34
SPEAKER_03: Will there be other commodities discussed?
20:37
SPEAKER_03: I don't think it's going to be limited to soybeans.
20:40
SPEAKER_03: Any other commodities, the meat sector?
20:42
SPEAKER_03: Can you tell us anything else about the potential of increased trade ag trade with China?
20:49
SPEAKER_02: Oh, absolutely.
20:50
SPEAKER_02: I know that you know the attention span, unlike you, Jim, of the average general journalist is pretty small.
20:56
SPEAKER_02: And apparently the only crop that they know of is soybeans.
21:00
SPEAKER_02: And so that's that's all they can write about.
21:02
SPEAKER_02: But at USDA and in the Trump administration, we are aware that American farmers grow more than soybeans.
21:08
SPEAKER_02: And indeed, when you look at the state of trade, there are many commodities that are in worse shape and need more new markets than soybeans.
21:18
SPEAKER_02: Soybeans is actually doing halfway decently right now, thanks to the president's trade agreement with China, thanks to China keeping that trade agreement, and thanks to there now being discussions about expanding further sales.
21:31
SPEAKER_02: So soybeans is being handled quite well.
21:34
SPEAKER_02: But I know that there are other commodities, whether it be hardwood, sargum, cotton, and just for starters, that need to be and will be discussed because as part of the agreement and framework that Treasury Secretary Bessant reached, for example, there were commitments to purchase sargum.
21:54
SPEAKER_02: And we've seen sargum being purchased.
21:56
SPEAKER_02: I don't want to let your uh listeners think that it isn't.
22:00
SPEAKER_02: Cotton, we need them to purchase more of our cotton and hardwood.
22:04
SPEAKER_02: Much American hardwood ended up making its way to China to be manufactured.
22:09
SPEAKER_02: Into furniture, we need to make certain those commitments are kept and those commitments are expanded.
22:14
SPEAKER_02: So even though the news media may only focus on one commodity, the U.S.
22:18
SPEAKER_02: government decidedly is not just focused on one commodity.
22:22
SPEAKER_02: We're focused on the bigger picture.
22:24
SPEAKER_03: That's good to hear.
22:25
SPEAKER_03: What relative to cotton, and you know that the uh they might have a break-even price of 92 cents, and I think they're getting 62 cents right now.
22:34
SPEAKER_03: So there's a world ahead out there.
22:36
SPEAKER_03: What's the issues in China and cotton in re-establishing what had been a pretty good cotton trade market?
22:43
SPEAKER_03: Is it a labor, is it a labor issues in China?
22:47
SPEAKER_03: It's is that still pending or not?
22:50
SPEAKER_02: No, I I I kind of there is the forced labor issue, but that's not at the heart of cotton's difficulties right now.
22:59
SPEAKER_02: And I hope that if even if you're a farmer and you're watching right now and you've never grown a pound of cotton in your life, you pay attention to this because what's going on now with cotton will repeat itself over many years and other commodities potentially.
23:20
SPEAKER_02: And that's why we in the Trump administration are focused on all of the world and opening up so many new markets that's focused solely on China.
23:31
SPEAKER_02: The reason why I'm saying that, Jim, is this so China historically bought a lot of cotton from us, yes, and then as Brazilian acres increased, they began to source more cotton from Brazil.
23:47
SPEAKER_02: But then something interesting happened.
23:50
SPEAKER_02: China began to increase its own domestic production of cotton.
23:56
SPEAKER_02: And now they are not only buying much less cotton from the United States, they're buying much less cotton from Brazil because they're growing more cotton for their own consumption in their own country.
24:10
SPEAKER_02: So they have replaced a lot of their needs for imports with domestic production.
24:17
SPEAKER_02: And if you look at the Chinese government's public statements as to what their goals are regarding ag policy in general, it's just that.
24:38
SPEAKER_02: They have right now an enormous subsidy available for any farmer, particularly in northeastern China, who is willing to grow soybeans.
24:48
SPEAKER_02: Now, they don't have many farmers taking them up on the offer right now.
24:52
SPEAKER_02: But if there's one thing we know about the Chinese government, it's that A, they don't have to worry about elections every four years.
25:00
SPEAKER_02: So that when so that when they make a policy decision, if they have the intent to carry it out, they can carry it out over the long term.
25:08
SPEAKER_02: That's what's happened to cotton.
25:10
SPEAKER_02: And that's why we're so busy trying to find other markets for American cotton, and why proposals like the Buy America Cotton Act, currently pending before the United States Congress, are so important.
25:22
SPEAKER_02: But what's going on with cotton could be the story with other commodities that are much in the news right now.
25:28
SPEAKER_02: If we look down the future 10, 15, or 20 years.
25:32
SPEAKER_02: And so it's vital that while if China wants to buy it and it's agricultural, we should want to be the source from it.
25:41
SPEAKER_02: We can't become dependent on Chinese purchases because we don't want all of American agriculture to find itself subject to only one customer.
25:51
SPEAKER_02: We want to sell to the world, and that's why I'm as proud of the fact that we're selling cotton to Indonesia 163,000 metric tons over the next five years, each of the next five years, as I am over any sales to China, because I know that market in Indonesia is true plus up for American cotton, and we can keep that market if we if we put our minds to it.
26:16
SPEAKER_03: That's good perspective.
26:17
SPEAKER_03: And what about the meats area in China, at least short term?
26:20
SPEAKER_03: The beef, and of course, pork has other issues.
26:23
SPEAKER_03: I think we they we have a much larger tariff on U.S.
26:26
SPEAKER_03: pork, and beef is we have to approve plants.
26:30
SPEAKER_02: I'm sorry, don't forget poultry too.
26:32
SPEAKER_02: Poultry, yes.
26:33
SPEAKER_02: As as you know, even beyond the tariff issue, Jim, China needs to approve shipments to their country from American plants.
26:44
SPEAKER_02: And during the trade disruption, they allowed those authorizations of American plants for for many different types of protein to expire.
26:54
SPEAKER_02: We need China to reapprove those plants for export to their country, and that is an issue that I hope and expect will be brought up during the forthcoming discussions with that country so that we can bring our protein trade, poultry, pork, and beef all back to where it needs to be.
27:13
SPEAKER_01: That's good to hear.
27:14
SPEAKER_01: I do have a question, Deputy Secretary.
27:16
SPEAKER_01: How about my friends?
27:17
SPEAKER_01: My office, 75% of my clients are in North Dakota, and I have an office in the Red River Valley, and you know what's happened to sugar.
27:24
SPEAKER_01: Do you have any color on that?
27:26
SPEAKER_01: I do.
27:27
SPEAKER_02: And if you were to ask me what are the three commodities that I watch most closely in terms of being at the top of the distress list, it would be the white stuff.
27:41
SPEAKER_02: It's cotton, rice, and sugar beet.
27:44
SPEAKER_02: So those would be my top three.
27:46
SPEAKER_02: And you don't read about those in the Wall Street Journal.
27:49
SPEAKER_02: That's not the commodity that the Wall Street Journal is writing about.
27:52
SPEAKER_02: But those are the commodities that are in the most financial distress, in my point of view.
27:58
SPEAKER_02: They have high costs of production, and they they each have uh unique trade issues.
28:04
SPEAKER_02: And when it comes to sugar beet, we have had a surplus of imports into this country, a bunch of it coming in at the tier two level, which have not, which until this administration have been allowed to come in tariff free.
28:18
SPEAKER_02: And because of that tariff-free status that they've been allowed to come into, a high tariff rate quota that allows them to come in tariff free, they have been substituting for American domestic production, especially on the sugar beet side, all the way into our food supply, even though if you look at the agreement, tier two is basically supposed to be organic and that's it.
28:39
SPEAKER_02: And yet that's not how it's being used.
28:42
SPEAKER_02: And so the first step that we did is we set the tier two quota at the lowest amount we were able to according to our trade agreements, because we believe that if something comes in under tier two, it needs to be organic.
28:57
SPEAKER_02: And if it's not organic, or if it's not going to be used in a good that is sold as organic, then it shouldn't be allowed to substitute for American domestic sugar.
29:08
SPEAKER_02: But I think as we look toward longer-term solutions, we may need to have a conversation about the tariff level with sugar.
29:17
SPEAKER_02: The tariff level for sugar imports has not been changed in more than a decade.
29:23
SPEAKER_02: And the last time it was changed, believe it or not, it was lowered, not raised.
29:28
SPEAKER_02: And with the effect of inflation over the past 10 or 15 years, that tariff is no longer high enough to discourage the importation of cheap subsidized foreign sugar to compete with American sugar producers, both cane and beet.
29:49
SPEAKER_02: And I would be hopeful that there may be some interest in taking up a desire to see, study, and perhaps raise those base level tariff amounts so that we can tell every American that we're prioritizing American farmers, including American sugar farmers.
30:09
SPEAKER_02: And for those goods that do need sugar, we're putting American sugar in it first.
30:13
SPEAKER_03: And processors because there's jobs there as well.
30:16
SPEAKER_02: Correct.
30:17
SPEAKER_02: And when it comes to sugar beet, as you know, there are cooperatives and they're farmer-owned cooperatives.
30:24
SPEAKER_02: And so they not only grow the sugar beet, they own the company that employs the workers who process the sugar for use by all of us.
30:33
SPEAKER_02: So if this infrastructure is allowed, if these sugar beet growers aren't making money, we're not only losing the farmer, we're losing the manufacturing part of it too, which is here in the United States as well.
30:47
SPEAKER_02: This is a double whammy.
30:49
SPEAKER_03: Now, relative to perhaps looking at the at the quota level, at the tariff level, what about Mexico?
30:57
SPEAKER_03: We have the side agreement with Mexico.
31:00
SPEAKER_03: Should that be reviewed as well?
31:02
SPEAKER_03: I mean sensitive issue, as you will know.
31:05
SPEAKER_02: Yeah, I do know that.
31:06
SPEAKER_02: But you know, I attended the Ag Outlook Forum, of course, which the United States Department of Agriculture puts on every year.
31:13
SPEAKER_02: There was a panel specifically about sugar, at which the Mexican industry had their representative on.
31:19
SPEAKER_02: And I found her comments very interesting.
31:22
SPEAKER_02: She seemed to be signaling that they were looking to do a deal.
31:26
SPEAKER_02: She expressly noted, and this is public, any one of your viewers can go to USDA's website, watch this panel for themselves, watch what the Mexican sugar representative had to say.
31:36
SPEAKER_02: They've raised their own high-to-tariff, high-tier tariff in Mexico.
31:41
SPEAKER_02: So they've done it before we have.
31:43
SPEAKER_02: They specifically requested that they thought the Mexican representative that we should do the same.
31:49
SPEAKER_02: And the ask that I heard from the Mexican representative was we know you want to prioritize American domestic sugar.
31:58
SPEAKER_02: That makes sense to us.
32:00
SPEAKER_02: The only thing we ask of you is that when you need more sugar, please look to us in Mexico.
32:06
SPEAKER_02: So it seemed to me she might be signaling openness to a deal, that maybe there's a deal to be done here.
32:13
SPEAKER_02: And this is an administration which favors deals, particularly those negotiated by private parties, that all the federal government needs to do is implement.
32:22
SPEAKER_02: So I'm hopeful that if if the representative of the Mexican sugar industry was meaning what she was saying on that panel, there may be an opportunity for discussions here, even after there may be tariff adjustments with regard to the high tier and what have you.
32:36
SPEAKER_03: Okay.
32:37
SPEAKER_03: Well, with sugar beet to staying on the sugar beet grower and Kane, we've indicated I've been to the Fargo area where they're losing$300 an acre.
32:47
SPEAKER_03: Younger farmers are$500 an acre or higher.
32:51
SPEAKER_03: The recent FBA program, the uh you know bridge assistance program, authorized up to$1 billion for specialty crops, as you well know, including sugar.
33:03
SPEAKER_03: Now that's that seemed uh insufficient.
33:06
SPEAKER_03: Uh what is there anything else USDA can do from an economic aid perspective, or is that hoped for Congress can maybe follow up with additional aid for specialty crops and sugar?
33:19
SPEAKER_03: And sugar.
33:21
SPEAKER_02: So let me divide my answer into three parts if I might.
33:24
SPEAKER_02: Sure.
33:24
SPEAKER_02: With regard to the Farmer Bridge Assistance Program, the$12 billion in total that we set aside,$11 billion for row crops,$1 billion to be shared by specialty crops and sugar, was the maximum amount that we could set aside, given the commodity credit corporation's$30 billion a year cap in spending.
33:49
SPEAKER_02: So that was the maximum amount of money that we could set aside on our own for a program.
33:55
SPEAKER_02: But that is not all the limited to the only relief that is going to sugar and specialty crops, because as you know, Congress passed and we implemented in 2025 multiple disaster relief programs meant to help with natural and other disasters that occurred in 2023 and 2024, but whose monies were paid in 2025.
34:19
SPEAKER_02: And there were programs specific to sugar, which resulted in the distribution of hundreds of millions of additional dollars to sugar cane and sugar beet cooperatives, and specialty crop programs as well, most notably our supplemental disaster relief program, stages one and two.
34:38
SPEAKER_02: And stage two was specifically aimed at programs for which, uh, crops for which there are not crop insurance, which are primarily specialty crops.
34:48
SPEAKER_02: So the bridge program payments are on top of those congressionally appropriated monies through programs like the supplemental disaster relief program, stages one and two, and programs for sugar and sugar cooperatives that have also gone out in 2025.
35:05
SPEAKER_02: So those monies are on top of that.
35:07
SPEAKER_02: Now, if Congress were to pass additional monies, we would of course get those funds out forthrightly and follow their instructions in doing so.
35:16
SPEAKER_02: But for right now, those are the authorities that we have, and that's what we've gotten out to those producers.
35:22
SPEAKER_02: And in the case of the bridge program, are getting out as we speak.
35:26
SPEAKER_03: On the current FBA program, again in Illinois, the vast majority of producers there came up to me because I asked them, how's it going?
35:34
SPEAKER_03: Or have you received your payment?
35:36
SPEAKER_03: And a lot of them already had.
35:38
SPEAKER_03: And I didn't reflect many problems out there.
35:42
SPEAKER_03: I know the first few days, there's always glitches in some county offices.
35:47
SPEAKER_03: You know, nothing's perfect.
35:48
SPEAKER_03: But I was told within two days of them with the 23rd announcement of February, they had the money, or they may have had to sign a document saying they fit within the AGI guidelines.
36:01
SPEAKER_03: And then two days after that, they got the money.
36:04
SPEAKER_03: How much money has been paid out?
36:07
SPEAKER_03: Is there a level?
36:08
SPEAKER_03: I've heard about six billion.
36:10
SPEAKER_03: Is that correct?
36:11
SPEAKER_02: That's correct.
36:12
SPEAKER_02: It's as of yesterday afternoon, and keep in mind every time I get an update, it's it's increased.
36:17
SPEAKER_02: But as of yesterday afternoon, of the$11 billion that we had set aside for specialty crops, more than six billion dollars, or that is to say, more than half of it had already been distributed.
36:28
SPEAKER_02: And we're not even out of the first week of March.
36:31
SPEAKER_02: And similar to what you're hearing, we're not hearing of any major hiccups at all.
36:36
SPEAKER_02: As a matter of fact, one of the reasons why we were able to get so much out so quickly is so many of the farmers took us up on our offer to go to login.gov and do this all electronically without having to visit their FSA office at all.
36:53
SPEAKER_02: You don't have to visit your FSA office if you don't want to.
36:56
SPEAKER_02: You can go to login.gov if you have an account.
36:59
SPEAKER_02: If you don't, you can create one.
37:01
SPEAKER_02: You link it to USDA, you'll find your form there, and you can affirm it electronically and you've done all you need to do.
37:08
SPEAKER_02: And your timing on when payments get out is also correct.
37:11
SPEAKER_02: It's two to three business days.
37:13
SPEAKER_02: After you affirm your form is correct, you will receive the money directly deposited into your checking account.
37:20
SPEAKER_02: It's the fastest rollout we've ever seen of any program.
37:23
SPEAKER_02: It's been enormously successful, and it's what Secretary Rollins and President Trump expect.
37:28
SPEAKER_02: They know farmers need this money now.
37:30
SPEAKER_02: They know bankers are looking at people's balance sheets now in order to make lending decisions for the coming growing season.
37:36
SPEAKER_02: And so we're going about it as quickly as possible.
37:39
SPEAKER_03: I don't want to get down into the minutiae of SDRP, but stage one and stage two.
37:43
SPEAKER_03: But overall, and you know this, SDRP stage one was more farmer friendly in many other areas.
37:50
SPEAKER_03: SDRP two had some conundrums from a farmer implementation per perspective.
37:56
SPEAKER_03: I think that the sign-up's going until the end of April.
37:59
SPEAKER_03: Is there any update on have you cleared up some of the issues as far as data in SDR in SDRP2?
38:07
SPEAKER_03: Because there was a lot of you know differences with the crop insurance information as I understood it.
38:13
SPEAKER_02: So anytime we're dealing with specialty crops for any type of payment program, we are at a disadvantage at USDA.
38:23
SPEAKER_02: Our row crop farmers, they provide USDA with the data every year like clockwork.
38:30
SPEAKER_02: They visit their FSA office, they tell us what they intend to plant, and then what they do plant.
38:35
SPEAKER_02: So whenever there is a program, whether congressionally authorized or created by the department itself, we already have that data.
38:44
SPEAKER_02: We can pull it, we can give it to our economists, and we can run the numbers.
38:48
SPEAKER_02: We do not have that ability with specialty crops because specialty crop producers, by and large, do not report their production on an annual basis to FSA.
38:57
SPEAKER_02: So anytime we are required to do a specialty crop program, our first step is to get the data.
39:04
SPEAKER_02: That's, for example, in our bridge payment program, why we have asked all the specialty crop producers of the covered crops to please show up at the farm service agency office and report your production from last year.
39:17
SPEAKER_02: So what I have gone to do, Jim, when I talk to groups, particularly groups that are focused on specialty crop growers, is to encourage them to pick up the habit from their row crop brethren and to start reporting their acreage every year.
39:34
SPEAKER_02: The number of times we are having programs geared towards specialty crops has increased a great deal over the past decade.
39:41
SPEAKER_02: And if we already had that data in our hand, we would be able to move things a lot faster than we currently are able to do.
39:51
SPEAKER_03: Okay.
39:51
SPEAKER_03: And and you're what on the on the$1 billion on the FBA for specialty crops and sugar, what's the timeline after is it March, April, as far as so we have uh we have a sign up going on right now where we need producers to provide us with the data.
40:09
SPEAKER_02: Once that sign up period closes, we're gonna take the data that they've given us, run it against the amount of money that we have available to distribute, and come up with payment rates.
40:21
SPEAKER_02: I suspect that we will have those payment rates by the end of this month or at the latest, very early April.
40:29
SPEAKER_02: And then once we have those payment rates, we will publish them just like we did with the row crop payment rates in the bridge assistance program, and then March 4th with the payment part of it.
40:40
SPEAKER_03: Gotcha.
40:41
SPEAKER_03: Joe, I'm gonna call it call an audible here on USDA data.
40:45
SPEAKER_03: I want to switch from USDA organization, which hopefully we'll get to, but USDA data.
40:51
SPEAKER_03: I think you've been one of the leaders, you know, Deputy Secretary, in calling for public comment, farmers, ag, uh, ag industry, users of USDA information, NASA especially, to comment on what they like, don't like, are they they need modernization?
41:07
SPEAKER_03: Where are we at in that process?
41:10
SPEAKER_03: Because I know you've heard some farmers, I don't think it's the majority, who say they they wish USDA just wouldn't put out a crop production report.
41:18
SPEAKER_03: I I think that would be uh not good because we need a baseline number out there.
41:24
SPEAKER_03: What can you tell uh the ag sector as far as uh again, timeline, what can be done and you know the potential of making USDA data even better?
41:37
SPEAKER_02: Well, currently we have an open request for information.
41:41
SPEAKER_02: Secretary Rollins announced that at her speech at the Ag Outlook Forum.
41:46
SPEAKER_02: That we're asking, I think it it goes at least till the end of March, maybe into early April, for anyone who has an opinion about the quality of USDA data, how we collect it, how we could collect it and calculate it even better, or wants to provide information to us about how they use USDA data to better inform our knowledge of how our data is used throughout the private markets, they can file comments as part of that request for information.
42:16
SPEAKER_02: And I highly encourage them to do so.
42:19
SPEAKER_02: We're gonna take those comments when the comment period closes.
42:22
SPEAKER_02: And on, I believe it's the 22nd of April, if my memory is working correctly, we're gonna have our annual data users meeting in Kansas City, Missouri.
42:32
SPEAKER_02: And that's gonna be the next opportunity for all of our USDA data specialists throughout the agency to go out and interact in person with people who use our data in order to get more feedback so that our research, education, and economics and office of the chief economist teams can then see if we need to be making some changes in terms of how we collect and report our data to make it more accurate and more useful.
43:01
SPEAKER_02: And I don't want your listeners to forget, Jim, we still intend to publish the report now that the growing season, the past growing season, marketing season is coming to a close, we're going to publish a written report that looks at the estimates that we made throughout the year, compares them to other private sector forecasters, and compares them to what the final numbers actually ended up being.
43:28
SPEAKER_02: And we're going to pat ourselves on the back where we got it right and where we missed it.
43:34
SPEAKER_02: We'll ask ourselves the question: did we miss it because there was a weather or unexplained event that couldn't have been predicted, which shifted the numbers later, what have you?
43:44
SPEAKER_02: Or is there the possibility that there could be a systemic issue that we need to fix to ensure that we don't have this issue in the future?
43:53
SPEAKER_02: And this is not going to be a one time thing.
43:55
SPEAKER_02: This is going to be an annual report that we're going to do.
43:59
SPEAKER_02: This is going to be a process that doesn't repair itself overnight.
44:03
SPEAKER_02: This is going to be an iterative process like any scientific endeavor, but the ultimate goal.
44:09
SPEAKER_02: Is each set of data better than the last.
44:13
SPEAKER_02: And I want to thank each and every farmer, trade group representative, and citizen who showed up at our Ag Outlook Forum panel and posed questions to some of our data experts.
44:25
SPEAKER_02: I thought that was an outstanding exercise, even though at times there was some passion in the room from both sides.
44:32
SPEAKER_02: We cannot merely be an agency that puts numbers out there and then hides ourselves behind a brick wall.
44:39
SPEAKER_02: We've got to be involved in having a dialogue because that's the only way people will trust our numbers and our numbers will get even better.
44:49
SPEAKER_02: I think transparency is the answer, and we've got to stick to that, even if it becomes uncomfortable at certain points.
44:55
SPEAKER_03: That's good.
44:56
SPEAKER_03: A number of Illinois farmers told me this week that lately they get some rather the large surveys, not the smaller ones, and they only have a couple of days to fill it out.
45:08
SPEAKER_03: That seemed to be a problem that I hadn't heard all that often before.
45:12
SPEAKER_03: I don't know whether that's been brought up to you or not.
45:16
SPEAKER_02: So, Jim, I was recently in St.
45:18
SPEAKER_02: Louis, Missouri, and as part of my visit there, I visited the National Agricultural Statistical Services Facility where they mail out those surveys.
45:28
SPEAKER_02: And I saw them in the process of printing them, packaging them, mailing them, and then on the opposite end of the spectrum, opening, sorting, and scanning, and then filing the information that was provided therein for the return surveys.
45:43
SPEAKER_02: One of the things they have shared with me is as our mail service has slowed down, that has affected their timelines in terms of getting these surveys to people with a long enough lead window where they have a respectable amount of time to complete the survey and then have enough time to put it in the mail to get it back to NAS so that they can open it and receive it in time to provide the information the market needs on a timely basis.
46:13
SPEAKER_02: So this is something where the post office, which I admit is also part of the United States government, but I don't have anything to do with it, is not helping us here.
46:21
SPEAKER_02: But this is also why our department is focused on moving as much of what we do as possible to the digital realm, dragging us into the 21st century where more surveys will be conducted over the internet rather than over the mail service, which will help to eliminate this problem.
46:39
SPEAKER_01: Absolutely, Deputy Secretary.
46:41
SPEAKER_01: I just want to let you know your memory is just fine.
46:44
SPEAKER_01: That meeting is April 22nd, 1 p.m.
46:46
SPEAKER_01: to 4 30 at the Federal Reserve Bank of Kansas City.
46:49
SPEAKER_01: Does that sound correct?
46:50
SPEAKER_02: Yeah, I knew it was in Kansas City and I thought it was April 22nd, so I'm glad I got it right.
46:55
SPEAKER_01: Pretty good, pretty good, pretty good.
46:57
SPEAKER_01: And you're inviting people to go, you know, want to be part of the solution, get out there.
47:01
SPEAKER_02: It's open to the public.
47:03
SPEAKER_03: I'll end it on the net NAS numbers, especially, but then I want to get into the reorganization.
47:08
SPEAKER_03: But I tell again, I've covered USDA for 50 years, and I remember when the lockup room was in the basement.
47:16
SPEAKER_03: Oh five four, by the way.
47:18
SPEAKER_03: You may not even know that.
47:20
SPEAKER_03: The first lockup room was in the basement and the printing press was there, etc.
47:25
SPEAKER_03: I tell farmers, I said, look, NAS, they're statisticians, they want to do a good job, but there is only as good as the tools and the information they get.
47:34
SPEAKER_03: Now, there's some always areas of improvement, but I did want to back up at least over the decades of the statisticians that I've worked with and covered as the beat my beat reporting days that they want to do a good job, but every industry changes, and I think that's what we've been talking about.
47:53
SPEAKER_03: Are there better tools?
47:54
SPEAKER_03: Are there better ways to accelerate the information, etc.?
47:58
SPEAKER_03: So I wanted you to hear that.
48:00
SPEAKER_03: That there are a lot of defenders of the process.
48:03
SPEAKER_03: It just needs to be improved in some areas.
48:05
SPEAKER_02: Well, and I tell people this I remind them what the job of our economists is.
48:10
SPEAKER_02: And their job is not to be popular, it's to tell the truth.
48:16
SPEAKER_02: And it's to tell the truth when it's good news, and it's to tell the truth when it's not what we want to hear.
48:22
SPEAKER_02: So I always close when someone raises a data question with this if the report ends up being correct, even though it's disappointing to farmers in the market, then they have done their job and we should applaud them because that is their only job to get it right, whether the information is good or bad for the market price.
48:48
SPEAKER_01: Let's get in this next question.
48:50
SPEAKER_01: How is the administration addressing the question raised about the USDA reorg effort?
48:55
SPEAKER_03: Yeah, can you give us an update on the reorganization?
48:59
SPEAKER_03: What's the again, what's the timeline?
49:01
SPEAKER_03: There's been some staffing deficiencies in some areas.
49:05
SPEAKER_03: I know maybe it's improved in the FSA offices in the counties, but there were some months there where I get I got for more than a few emails from county offices that said they went down from three to one.
49:19
SPEAKER_03: Now, hopefully that's been improved.
49:22
SPEAKER_02: Jim, we had a deferred resignation program early in the administration where employees who wanted to retire or resign in order to pursue another opportunity were able to do so.
49:33
SPEAKER_02: That option was broadly available to USDA employees.
49:36
SPEAKER_02: And in some offices, more people took it than others.
49:40
SPEAKER_02: We're now rectifying that.
49:42
SPEAKER_02: We've instructed our state-level executive directors to let us know.
49:46
SPEAKER_02: And I know because I've had a meeting with Administrator Bill Beam and Under Secretary Richard Fordyce about this, they've got the offices lined up in terms of who needs the most help where.
49:57
SPEAKER_02: And now we've got to look at the budget which Congress appropriated for us and see if there's any room for additional hiring.
50:06
SPEAKER_02: And I would encourage anyone who has questions about the FSA hiring to take a look at the number in the budget that Congress enacted this year and compare it to the number last year before we have a conversation about the thousands of people you want us to hire.
50:23
SPEAKER_02: But beyond that, our reorganization will be largely done this year.
50:30
SPEAKER_02: And we're we will have our employees calendar this calendar year or fiscal year.
50:35
SPEAKER_02: Correct.
50:36
SPEAKER_02: Correct.
50:36
SPEAKER_02: And we will have our employees who want to move with us, and I hope that's the vast majority, to their new locations, they'll be in their new locations by the end of this year.
50:48
SPEAKER_02: And we intend to do it in a way to respect those with school age children, to allow those children who are in the Washington, D.C.
50:57
SPEAKER_02: area of parents who were going to ask to move to other locations around the country to complete their school year in Washington, D.C., and then be able to be in their new location at the time their new school starts so that they can start with all their new buddies at the same time and not be, you know, the horror story from when we were all young, the new kid who shows up halfway through the year.
51:18
SPEAKER_02: We don't want to put anyone in we don't want to put anyone in that circumstance.
51:21
SPEAKER_02: So that that's the way we're planning it out.
51:24
SPEAKER_02: We made our first announcement.
51:26
SPEAKER_03: Yeah, go ahead.
51:27
SPEAKER_03: Sorry.
51:27
SPEAKER_03: Now, is there any chance for an additional hub?
51:30
SPEAKER_03: I think there's five now.
51:31
SPEAKER_03: Is there any chance you could have an additional hub if the need was there?
51:36
SPEAKER_02: So I don't think enough people read the memorandum as closely as I, as a lawyer, would have them read it.
51:44
SPEAKER_02: Um while the hub locations are the points that will be receiving the largest numbers of employees.
51:52
SPEAKER_02: They're not the only places that will be receiving new employees.
51:56
SPEAKER_02: The memorandum was quite explicit about that.
51:58
SPEAKER_02: As a matter of fact, it signaled a few of the places that are not technically designated as hub locations, but will nonetheless have a greater USDA presence.
52:07
SPEAKER_02: Among them that are specifically named in the memorandum are St.
52:11
SPEAKER_02: Louis, Missouri, and Athens, Georgia, where the Forest Service has a wonderful office for the eastern United States, which we wish to build up and including put some more agency personnel there who are not Forest Service.
52:24
SPEAKER_02: We've also recently announced with Senator Deb Fisher of Nebraska that USDA's wonderful facilities in the Lincoln area will be receiving additional employees.
52:34
SPEAKER_02: And as part of closing down the Beltsville Agricultural Research Center, which is long past its glory days, each and every one of those experiments will go to a new location, one of the 90 plus other agricultural research service labs we have across the country.
52:54
SPEAKER_02: And we're going to pick the location based on which laboratory is best able to carry out the continuing research.
53:01
SPEAKER_02: Now, I want to emphasize a point on timing, Jim.
53:05
SPEAKER_02: The Beltsville piece will take longer than this calendar year, but the Witten building, the Yates building, the consolidating our footprint in those two buildings within Washington, D.C., and moving the people out of the South building who will later find themselves in hub locations, that's all going to be done this calendar year.
53:25
SPEAKER_02: But the point is that it's not just the five hub locations.
53:29
SPEAKER_02: When we're finished, there will be places from Albuquerque, New Mexico to Athens, Georgia, west to east, that will have additional USDA employees in buildings that we are already occupying that have additional space.
53:43
SPEAKER_03: Where will the world board?
53:45
SPEAKER_03: The current lockup is in the South Building, as you well know, Deputy Secretary.
53:50
SPEAKER_03: A lot of industry analysts are saying, where will that go?
53:53
SPEAKER_03: Will it go into the Witten building or will there have to be additional space at least in DC?
53:59
SPEAKER_03: Because it has to remain probably remain in DC for the for the monthly WASDI report.
54:05
SPEAKER_02: So we're going to make mission area by mission area announcements.
54:12
SPEAKER_02: We've announced the Food and Nutrition Service will be leaving Braddock Road and we'll be doing an inter-region move to DC as part of our first announcement in February.
54:25
SPEAKER_02: This month in March, we'll have another mission area that we're going to announce its reorganization details.
54:31
SPEAKER_02: And then the same as we get down to April, May, June, and what have you.
54:35
SPEAKER_02: And so I don't want to preview the research, education, and economics mission areas announcement and to take the thunder away from it.
54:44
SPEAKER_02: What I will say is that we are well aware of the security and other needs of the World Agricultural Outlook Board, how important that is.
54:54
SPEAKER_02: And we have taken that into account in our plan and in our future footprint.
55:00
SPEAKER_02: But it may be of interest to your listeners who think that even theoretically, the only place it could be is Washington, D.C.
55:09
SPEAKER_02: Well, for because of how important the World Agricultural Research Board is, Outlook Board is, it has an entire backup system, including backup computers, a backup location to do lockup, et cetera, et cetera.
55:25
SPEAKER_02: So in the event of a calamity, the information would still go out and lockup could still occur.
55:31
SPEAKER_02: And that location is nowhere near Washington, D.C.
55:35
SPEAKER_02: So the notion that that it has to be DC or bust, that's not factually true, regardless of where we end up putting the experts who do lockup.
55:45
SPEAKER_03: That's interesting.
55:47
SPEAKER_03: I did not know that.
55:48
SPEAKER_03: But that's good to know you.
55:50
SPEAKER_01: That's the first time I've ever just full disclosure.
55:53
SPEAKER_01: That's the first time I've ever heard Jim Wiesemeyer say he didn't know something.
55:57
SPEAKER_01: So we'll want to make a short out of that.
55:59
SPEAKER_01: Let's get to the let's get to the next question.
56:03
SPEAKER_01: Where are we well?
56:04
SPEAKER_01: Where are we at?
56:04
SPEAKER_01: Where much extra staffing will be needed for food.
56:07
SPEAKER_03: Oh, I think he he indicated that they're they're reviewing it.
56:11
SPEAKER_03: I think we're okay on the staffing now, Tommy.
56:13
SPEAKER_03: On on trade, will we ever get the commentary back on the U.S.
56:17
SPEAKER_03: agricultural outlook report?
56:19
SPEAKER_03: Because ever since the last few months we haven't had the analysis, if you will.
56:25
SPEAKER_03: Will that uh change in the future?
56:28
SPEAKER_02: You know, Jim, it's kind of a damned if you do, damned if you don't situation.
56:32
SPEAKER_02: If we had commentary in there, perhaps not you, but other portions of the press would say, oh, well, that's just propaganda from the Trump administration.
56:41
SPEAKER_02: I think the secretary made the right call.
56:43
SPEAKER_02: We give you the raw numbers, we tell you what's changed, and everybody can add their own commentary to it.
56:50
SPEAKER_02: And given the state of our media environment, I think that that was a wise move on the secretary's behalf.
56:58
SPEAKER_02: Let's focus on our estimates being as good as they can be.
57:01
SPEAKER_02: There's no there's not a shortage of commentary in the world for any news announcement.
57:06
SPEAKER_03: So you think that then that which will continue just presenting the information and and perspective on up or down whatever countries and crops and and meats, et cetera.
57:15
SPEAKER_02: Okay, that's I do expect it to be to continue.
57:18
SPEAKER_03: Yes, okay, okay.
57:20
SPEAKER_03: On the trade area again, the the the dilemma we're in in the structural changes, I think, going on in U.S.
57:27
SPEAKER_03: agriculture.
57:28
SPEAKER_03: Everybody says you have to have more demand, both from the trade environment side, but also the domestic side.
57:35
SPEAKER_03: Now, I know USDA plays a role, of course, in the renewable fuel standard.
57:40
SPEAKER_03: You're more than an interested observer because you have a participation in the in the credit area for the carbon credits in the sustainable aviation fuel.
57:51
SPEAKER_03: We have waited so long for this information, both from EPA on the RFS, that they say by the end of this month we'll get the 26 and 27 mandated levels for corn in the biodiesel areas, uh, renewable diesel, et cetera.
58:05
SPEAKER_03: But then on the sustainable aviation fuel, we got some details recently, but USDA still needs to fill in the blanks on the credit levels uh by crops like soybeans and corn.
58:19
SPEAKER_03: Can you offer anything in addition to, again, timelines and potential information on that?
58:27
SPEAKER_02: So, with regard to the renewable volume obligation, our friends at the EPA have been hard at work.
58:34
SPEAKER_02: Administrator Zeldon and my counterpart, Deputy Administrator Fatui, over there are true partners when it comes to this.
58:41
SPEAKER_02: They are farmer friendly and they are farmer first.
58:44
SPEAKER_02: And the proposal that they put out for comment is, in my view, the most pro-biofuels rule any administration of any party has put out.
58:54
SPEAKER_02: And I look forward to when that rule is finalized, which will be in the near term.
58:59
SPEAKER_02: And I think when that rule is finalized, based on my understanding of where they have ended up, farmers will rejoice because we will have numbers that we can celebrate and numbers that will be seen as true, despite the operation of law uh required for certain waivers and what have you.
59:18
SPEAKER_02: So I'm looking forward to their making that announcement.
59:20
SPEAKER_02: And I want to thank Administrator Zeldon and Deputy Administrator Fatouille for being such wonderful partners of both Secretary Rollins and I and the American Farmer overall.
59:30
SPEAKER_02: When it comes to the 45Z rule, Treasury has put out its piece, but this is a trip titch, if you will.
59:38
SPEAKER_02: There are three pieces to this work of art, and we've got the first piece from Treasury out.
59:44
SPEAKER_02: Yes.
59:44
SPEAKER_02: But now we've got pieces from USDA and the Department of Energy.
59:49
SPEAKER_02: Right now, where things stand are USDA and Energy are having conversations, and we've got some things we need to button up before we can get our two respective rules out.
1:00:01
SPEAKER_02: But I am confident those conversations will continue to be productive.
1:00:05
SPEAKER_02: We'll button those items up and we'll publish our rules in due time.
1:00:09
SPEAKER_02: In the meantime, the Treasury Department did us a real solid in their proposed rule by letting everyone know that you can rely upon the Treasury Department's prior statements and its statements in the proposed rule to claim your tax credit for last tax year, 2025, and going forward in this tax year until the new rules are finalized.
1:00:33
SPEAKER_02: So I really tip my hat to their to our friends at the Treasury Department for providing the market with that level of certainty that it needed.
1:00:40
SPEAKER_02: Now it's up to energy and USDA to complete the job.
1:00:43
SPEAKER_03: Do you have a timeline on the on the what's remaining to be announced on the details?
1:00:48
SPEAKER_02: Not one that I'd like to make publicly.
1:00:51
SPEAKER_03: Okay, okay.
1:00:52
SPEAKER_03: That's fair.
1:00:53
SPEAKER_03: That's fair.
1:00:54
SPEAKER_03: The uh where was I gonna go on?
1:00:56
SPEAKER_01: You wanted me to look on the list you no, no, no.
1:00:58
SPEAKER_03: I know what I want to on consumption side.
1:01:01
SPEAKER_03: There's two angles here.
1:01:02
SPEAKER_03: By by having a farmer-friendly, you said uh RFS announcement, and I'm assuming farmer-friendly across the board under the the RINs and the SREs.
1:01:13
SPEAKER_03: Can I go that far or not?
1:01:15
SPEAKER_02: I think it will be seen as the most pro-biofuels rule ever put in place by any EPA administrator, and I think it will send a signal that this administration understands that American energy dominance is about all liquid fuels, petroleum and biofuels, both.
1:01:35
SPEAKER_03: That's good to hear.
1:01:36
SPEAKER_03: Okay.
1:01:37
SPEAKER_03: Now, because in this vanguard, we're we're acting more like Brazil.
1:01:41
SPEAKER_03: I tell farmers all the time look at Brazil as the supermarket of the world right now, and uh, don't be afraid, just get back.
1:01:49
SPEAKER_03: We can do some of the things they're doing by increasing domestic utilization of the value added change, up the value added change, octane for corn-based ethanol, you know, crushing for oil relative to the SAF.
1:02:02
SPEAKER_03: Do you agree with that?
1:02:04
SPEAKER_02: I agree with that, and I'm excited about the prospect that sustainable or synthetic, whatever your favorite S is, aviation fuel represents.
1:02:13
SPEAKER_02: I'm even more excited about its maritime counterpart and the fact that, for example, the Maersk shipping company, every new vessel it purchases going forward, including those right now under construction, are able to burn biofuel instead of just solely Diesel and what have you.
1:02:33
SPEAKER_02: And that is Maersk, one of the world's largest shipping companies, intentions going forward to keep that.
1:02:39
SPEAKER_02: We know both the European Union, and I spoke to the 27 nations of the European Union and their ambassadors and deputy chiefs of mention uh mission at a breakfast just on uh Wednesday or Thursday of this week, and Japan both have the intention to put in place biofuel blending mandates for airplanes.
1:03:01
SPEAKER_02: They want synthetic or sustainable aviation fuel to be used.
1:03:05
SPEAKER_02: The Japanese government has stated as part of its trade framework negotiating with the United States, they want to buy SAF from us.
1:03:13
SPEAKER_02: I just told the European Union at that breakfast that you need to be buying SAF from us, and you need to allow that SAF to be from a crop-based feedstock.
1:03:24
SPEAKER_02: Don't be foolish.
1:03:25
SPEAKER_02: You need what we have here, and there's not enough of the other feed stocks to feed your plane.
1:03:32
SPEAKER_02: And so I'm hopeful that as we go forward over the next several years, we'll have multiple positive announcements on multiple biofuel fronts, including both SAF and maritime-based fuels.
1:03:45
SPEAKER_03: Okay.
1:03:46
SPEAKER_03: Again, on the demand side, there's a couple of things on the tariff funds that USDA gets to tap on it.
1:03:53
SPEAKER_03: I think I've heard you before saying you think that that should be looked at, changed.
1:03:59
SPEAKER_03: Is that still your your uh your hope for as far as we can make it more flexible and and how we use those funds?
1:04:06
SPEAKER_03: What for?
1:04:08
SPEAKER_03: Any any comments on on that topic?
1:04:10
SPEAKER_02: Well, we do have to follow congressional enactments, and as you know, Congress has a cap of$300 or so million dollars.
1:04:17
SPEAKER_02: $350, I think.
1:04:18
SPEAKER_02: That they say we can use no more of the Section 32 monies for things like helping farmers after natural disasters and what have you.
1:04:27
SPEAKER_02: If we wanted to tap into that fund for more than that amount, we would need Congress to raise or remove that cap.
1:04:34
SPEAKER_02: I don't know that I've heard any discussion on Capitol Hill about doing so.
1:04:39
SPEAKER_02: But if any member of Congress or if the committees of jurisdiction wanted to have that discussion, we'd be happy to put our experts in touch with them.
1:04:47
SPEAKER_02: In the meantime, we're trying to use those monies effectively as possible to buy all types of commodities from citrus to dried beans to uh fruits and vegetables in order to try to remove excess surpluses from the market, commodities that aren't the subject of programs of ARC and PLC and things of that nature to ensure that we have farmers have well-functioning markets and that Americans are all fed well.
1:05:14
SPEAKER_02: Because when we make those Section 32 purchases, as you know, Jim, those end up going into our feeding programs to make certain that those in the most need are getting the healthy foods they need each and every day.
1:05:26
SPEAKER_03: Yes, and those Section 32 funds and purchases help uh the lentils and dry edible beans far more than I think the general public realizes.
1:05:36
SPEAKER_03: Sometimes it's a lifeline.
1:05:38
SPEAKER_02: We have made several large purchases of dry beans, which has been particularly helpful to farmers in the upper Midwest.
1:05:46
SPEAKER_02: And uh Secretary Rollins and I are committed to continuing to use the authorities we have to ensure that our farmers have viable markets for what they're growing.
1:05:56
SPEAKER_03: Okay.
1:05:57
SPEAKER_03: Where you want to go?
1:05:58
SPEAKER_03: There's there's a you know, kind of a bullet because we've taken a lot of your time.
1:06:01
SPEAKER_03: But I I want to get I want to get to at least the Commodity Credit Corporation.
1:06:05
SPEAKER_03: You mentioned uh a while ago$30 billion maximum.
1:06:08
SPEAKER_03: Maximum borrowing authority.
1:06:10
SPEAKER_03: I think it's been at that level for 40 years, by the way.
1:06:13
SPEAKER_03: Correct.
1:06:14
SPEAKER_03: And it it's more and more with the with the ARC and PLC and the CRP payments or whatever else that you have to tap for out of those funding authority.
1:06:24
SPEAKER_03: Is there any will you and Secretary Rollins at least encourage GT Thompson, House Ag Committee Chairman and Bozeman, Senate AG to increase that to some vanguard?
1:06:36
SPEAKER_03: Because Farm Bureau over the years has said it should be probably$50 billion.
1:06:40
SPEAKER_03: Don't you see the constraints right now of having it, quote, only it sounds like a lot of money, but it isn't?
1:06:47
SPEAKER_02: Well, it it is still a lot of money.
1:06:49
SPEAKER_02: I don't want to act like$30 billion is chump change, but it's it's not what it was 40 years ago when the cap was established because of the pernicious effect of inflation over these past decades.
1:07:01
SPEAKER_02: Indeed, I think you're correct.
1:07:03
SPEAKER_02: If you were to do an inflation adjustment on$30 billion for when it was established, you'd be at more than$50 billion.
1:07:09
SPEAKER_02: You're probably going to be closer to nearly double$60 billion now to have the same purchasing power.
1:07:15
SPEAKER_02: It's sad to say, the decline of the American dollar's value over time, but I don't run the Federal Reserve, I digress, that it would have had in the 1980s.
1:07:27
SPEAKER_02: And certainly with the increased payments that Congress thankfully authorized of the one big beautiful Bill Act, we are monitoring things very carefully.
1:07:36
SPEAKER_02: I don't think farmers need worry this calendar year about our authority and our ability to make those increased commodity payments in October of this year.
1:07:47
SPEAKER_02: We're ready and able to do so.
1:07:49
SPEAKER_02: But we keep uh Chairman Thompson, Chairman Bozeman, as well as our agricultural appropriators very close.
1:07:57
SPEAKER_02: And we always have conversations with them about what the packages that they pass mean for our budget, including the Commodity Credit Corporation.
1:08:05
SPEAKER_02: And we stand ready to make any suggestions or give them any data they need should they be interested in raising the borrowing authority.
1:08:14
SPEAKER_03: That's good.
1:08:15
SPEAKER_03: New world, New World Screwworm, Mexico.
1:08:18
SPEAKER_03: I know you've covered this as a as a sensitive topic.
1:08:22
SPEAKER_03: What is some some of the industry participants say, you know, can't there be a system at which through a series of tests, two, three, four tests before Mexican cattle can come across the border, checking it for that NWS?
1:08:41
SPEAKER_03: But to date, uh, USDA has been fairly off limits as saying no reopening of the border.
1:08:47
SPEAKER_03: Can you give us any any update on the possibility of that border reopening?
1:08:54
SPEAKER_03: And I know it would be have to be science-based and very test-oriented, but any update.
1:09:01
SPEAKER_02: You're correct.
1:09:02
SPEAKER_02: We want to follow the science.
1:09:04
SPEAKER_02: And we believe the actions we have taken over the past calendar year plus have had an impact.
1:09:11
SPEAKER_02: As a matter of fact, Jim, according to the original estimates of USDA, they predict that absent the steps we have taken, we would have already had a New World Screwworm infestation in this country given the rapid move north.
1:09:26
SPEAKER_02: We don't have it in this country now, thanks to the steps that we have taken, including aggressively moving to increase the number of sterile flies that we are distributing to push this fly back and keep it from moving further north, plus the aggressive border closure.
1:09:42
SPEAKER_02: We're going to continue to follow the data.
1:09:44
SPEAKER_02: The secretary's made that clear.
1:09:46
SPEAKER_02: And the secretary believes her first goal is to ensure the health and the quality of the American cattle supply.
1:09:53
SPEAKER_02: It's already constrained enough as it is, given our compared to our population, our record low herd size, and we don't want to do anything that would put that cattle supply in further jeopardy.
1:10:04
SPEAKER_02: So we're going to continue with our efforts.
1:10:06
SPEAKER_02: I know I saw the question you put up on the bottom of the screen there, Jim, with regard to our efforts to build and expand upon a sterile fly distribution facility in Mexico.
1:10:17
SPEAKER_02: It's my expectation that that plant will become, will come online later this summer, late this summer, we'll have that plant online and distributing sterile flies.
1:10:28
SPEAKER_02: But there's even more exciting news, Jim, in that when we're talking about these flies that are being dispersed, the flies that are helpful are sterile male flies.
1:10:41
SPEAKER_02: And because they're the ones that do the mating, and because these flies only mate once a year, excuse me, once a lifetime, if they mate with a sterile fly, there is no offspring produced, and there will be no offspring produced from that female.
1:10:55
SPEAKER_02: And that's how we push the fly back to the south and eventually move it back down to the Darien Gap where it once was and where it belongs.
1:11:05
SPEAKER_02: Historically, of course, as we produce new flies, you get half male, you get half female.
1:11:10
SPEAKER_02: The half female, unfortunately, are not helpful in our effort to go after the New World screw worm, and so they are disposed of.
1:11:18
SPEAKER_02: That means if we were to make 100 million flies, we really only get 50 million usable flies.
1:11:23
SPEAKER_02: Thanks to our agricultural research service and their innovations in genetic technology, they have been able to create a methodology whereby we will only produce sterile male flies.
1:11:37
SPEAKER_02: There will be no female flies produced.
1:11:40
SPEAKER_02: We have put this new technology on review with our friends at the Environmental Protection Agency.
1:11:46
SPEAKER_02: They are reviewing it on a fast-track process and assuming it meets with their protocols to confirm our scientists' belief that this technology is safe and poses no risk to other species or what have you.
1:12:02
SPEAKER_02: We expect to be deploying this later this year, which will mean that our flies, if we say that facility pumps 100 million flies, it'll be 100 million male flies that can all be distributed and put it back down.
1:12:17
SPEAKER_02: So this year is going to be a critical year in USTA's efforts to stop the spread of this horrible pest.
1:12:26
SPEAKER_02: And it will involve both investment in facilities in Mexico, the facility that the secretary helped to open in southern Texas just a few weeks ago as construction continues there, and this new technology from our Agricultural Research Service will that will ensure that every fly that is produced at these sterile fly facilities, once the EPA approves the technology, will be able to be a part of fighting to move this pest further south.
1:12:54
SPEAKER_03: Okay.
1:12:54
SPEAKER_03: But since we're on the uh you know beef industry, a little update on the investigation.
1:13:00
SPEAKER_03: And I think we have a staff member there that well.
1:13:03
SPEAKER_01: Now, Jed, explain one more time to Deputy Secretary of Vag how you're involved in the cattle business.
1:13:09
SPEAKER_01: And you're 23 and you are the future of agriculture.
1:13:12
SPEAKER_01: I don't know if you knew that, but you are.
1:13:15
SPEAKER_00: Well, uh, thank you, uh, Deputy Secretary, for maybe answering a couple of my questions here.
1:13:20
SPEAKER_00: Your back and forth with Jim has been awesome.
1:13:23
SPEAKER_00: But yeah, I'm a fifth-generation cattleman uh from Colorado with my family farms and ranches and kind of growing up in the cow calf and cattle feeding space.
1:13:32
SPEAKER_00: A lot of the dialogue sometimes was that the cattle producer receives a disproportionate amount of the cattle feeding or cattle margin compared to the packer.
1:13:44
SPEAKER_00: And I was wondering uh what your research and uh what your thoughts were on this.
1:13:50
SPEAKER_02: Well, it's not just limited to the cattle market.
1:13:53
SPEAKER_02: Whether we're talking about crops or livestock, the share of the overall value of production that the American farmer and rancher receives has declined over time.
1:14:05
SPEAKER_02: And the greatest share of the value of each product that is raised or grown is now captured by someone other than the farmer.
1:14:15
SPEAKER_02: So while there's been a lot of attention and justifiably so in the livestock market about this, the story is actually the same on the row crop side as well.
1:14:24
SPEAKER_02: Having said that, when I look at the beef market and I see who is currently making money, it's not the packer.
1:14:34
SPEAKER_02: Whatever one may think the optimum amount of market share any one company should be allowed to conglomerate.
1:14:42
SPEAKER_02: Whatever the answer to that question, each of the large beef packers are losing money on beef right now because they are not able to pass along fully the higher market price that they are thankfully paying to our American ranchers to the consumer.
1:15:01
SPEAKER_02: Their customers, the big grocery stores, whatever your favorite is, HEB, Kroger, Walmart, what have you, they're using their own market power to constrain the ability of these very large companies to pass along the price increases fully.
1:15:19
SPEAKER_02: That's great for the American consumer, but right now, these very large companies are eating their loss.
1:15:26
SPEAKER_02: Now, if I want to acknowledge that if we were to go back a few years ago, the situation would be completely the reverse.
1:15:33
SPEAKER_02: The American rancher would be losing money on every single animal that he or she sold, and the Packers were making a killing in more ways than one.
1:15:44
SPEAKER_02: And so that's how this market has swung so violently from one far end of the spectrum to the other.
1:15:54
SPEAKER_02: And what we need to do is we need to have policies that encourage a healthy herd size, which clearly needs to be larger than what we have now, while also allowing to each step of the chain rancher, packer, grocer, to make a respectable profit while also charging a price the consumer wants and is able to afford.
1:16:23
SPEAKER_02: And so that's the challenge.
1:16:25
SPEAKER_02: And right now we have a breakdown in this, in such that ranchers are making money and God bless them, they need to.
1:16:35
SPEAKER_02: Packers are losing lots of money, grocery stores.
1:16:38
SPEAKER_02: Well, they're using their market power to protect at least a tiny sliver of their margin and keeping the price a little lower than it otherwise would be if the full cost increase were passed along to the consumer.
1:16:49
SPEAKER_02: And we are beginning to see the barest minimum signs of people beginning to hold heifers back.
1:16:56
SPEAKER_02: And we want to encourage more cattle ranchers to do that.
1:17:00
SPEAKER_02: That's why Secretary Rollins has been focused on removing as much bureaucracy as possible, opening as much forest service land as available to grazing to help provide the incentive for our ranchers to follow that price signal that the market is sending that we need more cattle supply in this country.
1:17:21
SPEAKER_03: What's a timeline of the investigation of at least the beef industry?
1:17:26
SPEAKER_03: Is there a timeline?
1:17:28
SPEAKER_02: It's always difficult to give a timeline for an investigation.
1:17:32
SPEAKER_02: I mean, part of that depends on how responsive the parties are to the questions.
1:17:37
SPEAKER_02: Do there need to be follow-up questions asked?
1:17:40
SPEAKER_02: Do their initial answers answer a whole host of questions?
1:17:44
SPEAKER_02: It's difficult to put a timeline on that.
1:17:46
SPEAKER_02: But it is clear that there is that we're investigating this just as we're investigating other sectors of the ag economy.
1:17:53
SPEAKER_02: We started out talking about fertilizer.
1:17:55
SPEAKER_02: As you know, I've talked a lot about farm equipment.
1:17:58
SPEAKER_02: I think there are a lot of questions that need to be asked there about consolidation in the farm equipment space and what that has allowed the few remaining companies that produce farm equipment to be able to do, the structures they're able to put on the farmers who need their equipment.
1:18:12
SPEAKER_02: And I know questions have been raised about seeds and chemicals and other input costs too.
1:18:17
SPEAKER_02: So there's a lot to look at.
1:18:18
SPEAKER_02: The president has ordered the Department of Justice and the Federal Trade Commission to join with USDA in doing so, and we're busy at work doing that.
1:18:28
SPEAKER_01: Okay.
1:18:28
SPEAKER_01: Also, we have another question here at the bottom, guys.
1:18:32
SPEAKER_01: Beef imports, hot button.
1:18:36
SPEAKER_03: Yeah, well, you know, beef imports are imports of any non-U.S.
1:18:40
SPEAKER_03: products is always controversial.
1:18:42
SPEAKER_03: There's a provision I think we've got here in the farm bill, I think we mixed that out.
1:18:47
SPEAKER_03: No, I don't I don't think I want to ask that one.
1:18:50
SPEAKER_03: I want to end it with this.
1:18:51
SPEAKER_03: I want to go back to to connect dots here on China.
1:18:55
SPEAKER_03: Can you can you say that in the initial announcement that they were going to buy eight million tons of additional soybeans, which it looks like they fulfilled by the end of February?
1:19:07
SPEAKER_03: I guess that was the final final timeline.
1:19:11
SPEAKER_03: And then they made a commitment, at least it was announced from our country, to purchase 25 million tons of U.S.
1:19:19
SPEAKER_03: soybeans for the next few, I guess, marketing seasons.
1:19:23
SPEAKER_03: I don't know.
1:19:23
SPEAKER_03: Can you do you still do you see them following through on that, uh, China?
1:19:28
SPEAKER_03: And that's a market-sensitive issue.
1:19:30
SPEAKER_03: So so first, just a correction, it was I believe it was 12 million metric tons.
1:19:35
SPEAKER_03: I'm sorry, 12.
1:19:36
SPEAKER_03: He wants an another eight.
1:19:38
SPEAKER_02: I I stand corrected.
1:19:39
SPEAKER_02: Yeah, yeah, 12 million.
1:19:41
SPEAKER_02: And uh you know, Jim, they met that, and you also know people like to forget that when that first total came out, there was a lot of scoffing from some in ag and from some who don't deal with ag at all that that would be possible.
1:19:55
SPEAKER_02: It was done.
1:19:56
SPEAKER_02: And we saw very quickly after the Secretary of the Treasury helped to negotiate that deal, every indication that we had was that the Chinese government intended to keep it.
1:20:06
SPEAKER_02: We have seen no change in the Chinese government's cooperation in terms of the deal.
1:20:13
SPEAKER_02: And uh here I don't want to limit it to soybeans because I think it's a mistake to make that one commodity the focus of everything that is talked about in agriculture.
1:20:22
SPEAKER_02: I think it's wrong.
1:20:23
SPEAKER_02: But whether we're talking about sargum or the other things that were mentioned in that deal, we have seen increased purchases by China, more commodities going over on the boat.
1:20:34
SPEAKER_02: And this is a trend we wish to continue.
1:20:37
SPEAKER_02: And I know this is a topic that the president's trade team will be discussing when our president meets with their president.
1:20:44
SPEAKER_02: So every indication that we have at USDA, both public and private, has been just like they met that 12 million metric ton commitment that everybody tried to uh rain down on and claim wouldn't be met the first time.
1:20:58
SPEAKER_02: They continue to intend to meet the commitments they have made for 25 million metric tons this year and in the following year.
1:21:05
SPEAKER_03: Will we, do you think we'll get an official statement in within that context from China?
1:21:12
SPEAKER_03: Because some of the initial naysayers of the 12 million metric temperatures are saying, well, China hasn't announced it, even though they fulfilled it.
1:21:19
SPEAKER_03: Will do you think that we'll get one after this next round of talks between the president and and Xi Jinping?
1:21:27
SPEAKER_02: I mean, I have no ability to control what the Chinese government says, but I will say that USDA, going back to your data point, when the government is not shut down, we report pretty accurately the sales that are made that are notable for export.
1:21:43
SPEAKER_02: And one of the things that I think you already knew, sophisticated market participants know, but you know, your average reporter who doesn't deal with the ag every day may not know is that sometimes we know where the sale is going and sometimes we don't.
1:21:58
SPEAKER_02: If we know for sure where the sale is going, we'll say X number of tons of soybeans have been sold for export for China.
1:22:05
SPEAKER_02: If we don't know, we'll say X number of tons of soybeans or sargum or whatever it is have been sold and they're going to an unknown destination.
1:22:14
SPEAKER_02: But what we have learned over time is the large majority of those unknown destinations also end up being China.
1:22:21
SPEAKER_02: And so our chief economist would tell you that.
1:22:24
SPEAKER_02: Our wonderful economists in the research, education, and economic missionary would tell you that.
1:22:29
SPEAKER_02: So for most purposes, if you were looking at large purchases of commodities to unknown locations, particularly if it's something like soybeans or what have you, China usually ends up being the buyer.
1:22:42
SPEAKER_02: And so when the market was busy scoffing about, you know, oh, well, are they actually going to make it?
1:22:48
SPEAKER_02: If you were adding up the numbers of both those cargoes that we affirmatively knew were going to China and those cargoes which were at least on the front end listed as destination of unknown, and you realize that most of those, nearly all of those, were also going to China, most likely, you were seeing that they were making the progress to make the 12 million mark.
1:23:08
SPEAKER_02: And indeed they did so.
1:23:09
SPEAKER_02: So I wasn't surprised by it.
1:23:11
SPEAKER_02: But then I may be a little more sophisticated digester of information than your than your average CNN reporter.
1:23:18
SPEAKER_03: I I always end my podcast, uh, yeah, Deputy Secretary, with an upbeat positive outlook for U.S.
1:23:25
SPEAKER_03: agriculture.
1:23:26
SPEAKER_03: What would you tell both farmers and ranchers of some optimism ahead over the next year, uh, decade, whatever?
1:23:35
SPEAKER_03: You know, you know, what would you tell them?
1:23:37
SPEAKER_02: Uh well, I would tell them as someone who grows commodity crops that I would wish the price were higher just like they.
1:23:47
SPEAKER_02: But when you look at the momentum that we have, things appear to be moving in the right direction.
1:23:55
SPEAKER_02: We're not at the destination yet, by any means, but there has been progress.
1:24:01
SPEAKER_02: Look at our corn price.
1:24:03
SPEAKER_02: Our export momentum in corn is absolutely amazing.
1:24:08
SPEAKER_02: It is surprises even market experts.
1:24:11
SPEAKER_02: And that's why you've seen that corn price.
1:24:14
SPEAKER_02: Even after the USDA report, which got so much attention back in January, it's popped right back up.
1:24:21
SPEAKER_02: And it's right now at, or perhaps even just a little higher than it was before that report came out.
1:24:28
SPEAKER_02: Much time certain many Iowa corn farmers' great joy.
1:24:32
SPEAKER_02: Why is that the case?
1:24:33
SPEAKER_02: We have incredibly high export sales, and our trade team is at work trying to ensure that more of those sales occur.
1:24:42
SPEAKER_02: And for everyone who's watching who's not a part of this, I want to assure who's not a part of the policy discussion every day.
1:24:49
SPEAKER_02: I want to assure them every time there's a trade discussion, it doesn't matter with what country it is, ag has to be on the table.
1:24:57
SPEAKER_02: If there's not a win for ag, we're not going to get a framework agreement.
1:25:00
SPEAKER_02: It's that simple.
1:25:02
SPEAKER_02: That's why every agreement you have seen has an ag piece in it, whether we're talking about Vietnam, Indonesia, Bangladesh, our Western Hemispheric Partners, the European Union, they all have ag wins.
1:25:15
SPEAKER_02: That's going to continue.
1:25:17
SPEAKER_02: I have confidence that the EPA will be finalizing that probiofuels rule very soon.
1:25:22
SPEAKER_02: That's going to send a demand signal to the market.
1:25:25
SPEAKER_02: If Congress will do its job and pass E-15, as President Trump has asked them to do, that's going to send a further demand signal to the market.
1:25:34
SPEAKER_02: And when you look at some of the other projects that I know are online, and some of which I can't talk about publicly, that will bring new supplies of inputs like fertilizer into our markets here, which we desperately need here in the United States, or possibly new announcements regarding biofuels, including potentially sustainable aviation fuel and what have you.
1:25:58
SPEAKER_02: I see so many incremental wins adding up on the tally board that I think the market's going to continue to take notice of those, and the momentum will continue.
1:26:10
SPEAKER_02: This is not going to be something where it's going to be magic, Jim, as you know, and we're going to be able to throw a switch and one day we're going to be back to$15 beans or what have you.
1:26:20
SPEAKER_02: That's not that's not how things work.
1:26:23
SPEAKER_02: But I'm seeing the momentum go in the right direction because we have an administration that is focused, whether it be the Secretary of Agriculture, the Secretary of the Treasury, the Trade Representative, the Commerce Secretary, what have you, on ensuring that ag policy and farmers are top of mind across the board.
1:26:45
SPEAKER_02: And when you have an administration committed to that and committed to ensuring that the horrible inflation that we saw over the prior four years abates and does not repeat itself, we'll get this thing back in kilter.
1:27:02
SPEAKER_03: That's a good way to end it, Tommy.
1:27:04
SPEAKER_03: That's big D demand, building blocks for the future.
1:27:07
SPEAKER_03: I'm bullish again.
1:27:09
SPEAKER_01: Yeah, Deputy Secretary, yesterday when Jim and I were at a meeting, they asked us what we're grateful for.
1:27:14
SPEAKER_01: And I got to tell you from the bottom of our hearts, Jim, myself, Joe Grossafi, Jed Sidwell, Lindsay Cunningham, everyone at NasVIC AGBOL Trading, we're grateful you spent an hour and a half with us.
1:27:25
SPEAKER_01: I told you we wouldn't go long Joe Rogan style, but you decided you had other plans.
1:27:30
SPEAKER_01: And your ability to say that you're accessible is just absolutely astonishing.
1:27:35
SPEAKER_01: And I just proud of you.
1:27:38
SPEAKER_01: Very proud of the job you're doing.
1:27:39
SPEAKER_01: And I'm glad we have someone like you in DC to represent all of us.
1:27:45
SPEAKER_02: Well, you're very kind.
1:27:47
SPEAKER_02: I appreciate that, but I do take it seriously.
1:27:49
SPEAKER_02: This is a public service role.
1:27:51
SPEAKER_02: I work for the American taxpayer.
1:27:54
SPEAKER_02: It's my job to be responsive to American citizens.
1:27:57
SPEAKER_02: That's the whole name of the game.
1:27:58
SPEAKER_02: I'm just fortunate that President Trump and Secretary Rollins asked me to saddle up one more time and join them on this ride because the the journey is not easy.
1:28:08
SPEAKER_02: The the This isn't an easy time to be in these roles, but this is a time where we need everybody to pitch in so that we can get rural America back to the prosperity that it deserves.
1:28:18
SPEAKER_01: Thank you, Deputy Secretary.
1:28:19
SPEAKER_01: You've been listening to the Yag Bull Podcast.
1:28:21
SPEAKER_01: We've had Deputy Secretary Stephen Baden on our show.
1:28:24
SPEAKER_01: What a special time.
1:28:25
SPEAKER_01: Thank you, sir.
1:28:27
SPEAKER_03: Thank you.
1:28:28
SPEAKER_03: Thank you.