Vaden on the State of U.S. Agriculture
USDA Deputy Secretary Stephen Vaden discusses fertilizer concentration, China trade, sugar policy, farm aid, USDA data, reorganization, biofuels, CCC limits, screwworm, cattle markets, and why he sees momentum building for U.S. agriculture
In an extended interview Friday afternoon, March 6, USDA Deputy Secretary Stephen Vaden offered a detailed defense of the Trump administration’s farm and trade agenda, while also laying out concerns about fertilizer market concentration, stressed commodity sectors, specialty crop data gaps, USDA reorganization, and the need for stronger domestic and export demand.
Linkto video and audio of the interview with Vaden.
Link to audio only.
Fertilizer investigation, duopoly concerns, and supply
Question: Can you give an update on the fertilizer investigation and your comments that companies like Nutrien and Mosaic operate like a duopoly influencing supply and prices?
Stephen Vaden: “Absolutely. And I made those comments not to hear my own self speak, but because I think they reflect the condition of the marketplace. 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. I think it’s simply a fact.”
“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. Price is the clearest economic signal. If something’s price is high, the market is indicating we need more of that. If something’s price is low, the market’s indicating the opposite. We need less of that.”
“And yet, despite these years and years of high prices, we haven’t seen meaningful new supply come into the American market. And that’s not what economics would tell us should happen. And so the question is, why is that the case? 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.”
“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. And yet they have sunk $13 billion U.S. dollars of their own money. This isn’t government money into a project [but it will] result in there being new fertilizer supply, particularly potash in America, beginning, unfortunately, not this year, but next year.”
“And so when you see that type of market signal, that 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, 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. That only, to me, increases the level of questioning that needs to happen of the market incumbents. Why haven’t they done that?”
“This is a new market entrant that I’m speaking of in Canada. The incumbents have been in this market for decades. Theoretically, they would have a much lower cost to expand their supply. They’re already involved in this industry and yet they haven’t.”
“And so when 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. And I look forward to hearing their answers.”
BHP investment and other potential new entrants
Question: What is the company making that investment?
Vaden: “Well, it’s actually not a Canadian company. It’s an Australian company known as BHP. They are a mining company that has been in business for a 140 years.”
“And in meeting with them, I came to understand about this investment that they’ve made and I’ve taken a special interest in it. And I’ll say, Jim, I can talk about this investment publicly because it is public. BHP is a public company. They have to report to their shareholders.”
“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. I can’t talk about those proposals openly currently, because they’re still in the development stages.”
“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. Why haven’t they when it should be cheaper for them to do so?”
Morocco fertilizer case and Nutrien/Mosaic
Question: What about the countervailing duty order on Morocco?
Vaden: “I’ve heard from Nutrien. I’ve actually talked to the CEO of that company a couple of times. 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. I welcome that announcement.”
“I think most American farmers welcome that announcement. I hope Mosaic will come out and say the same thing, because if a company the size of Nutrien 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 a proper way of looking at it. Why would Mosaic need the order?”
“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.”
Permitting, federal action, and governors
Question: Can the administration help clear hurdles for new fertilizer investment?
Vaden: “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.”
“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. If there is a hurdle and it’s federal in nature, you call me up. We will work on it. We will get it out of the way. We want your project to succeed on behalf of the American farmer and on behalf of your shareholders.”
“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. That’s where the headache is.”
“So every level of government has a job to do. But at the federal level, we are very much committed from the top down. 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.”
“If you run into any hurdles, let Secretary Rollins and I know we are more than happy to call our partners in the state. 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.”
How farmers can contact Vaden; Illinois River watershed
Question: How should farmers reach USDA leadership?
Vaden: “I get a lot of tips by looking through social media because that is how people communicate nowadays.”
“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. 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 wrongheaded decision on the Illinois River watershed.”
“And before I landed, I had messages out to my friends in Farm Bureau. 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.”
“And so please let us know. We have tip lines available on our website and I’ve even tweeted out. If you want a meeting with me and we take meetings every day that I’m in Washington, D.C., please send my assistant Gabrielle Rossi a message and we will sit down with you.”
“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.”
Morocco case timeline
Question: What is the timeline for the Morocco review?
Vaden: “This countervailing duty order was nothing of President Trump’s doing. This countervailing duty order came into play early in 2021. Every five years under the law, there is a required review of any anti-dumping or countervailing duty order. That is what has begun now.”
“This order did not come about because of Section 32 or Section 31 or any presidential specific authority. 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.”
“My opinions reversing this order twice are public and you can read at more length than you would probably want to… my frank thoughts on the analysis that the bureaucrats did of this particular order, which I think was quite shoddy.”
“The review timeline is actually set by statute and it’s pretty strict. 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.”
“Part of the question that the International Trade Commission will be charged with determining is, is five years later, are American domestic fertilizer producers being harmed by unfair foreign competition? 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.”
“By late the summer or early fall, the International Trade Commission is going to be required to issue a decision on whether or not this order should continue.”
“But before next growing season, we will definitely have an answer as to whether or not this order is going to continue.”
Fertilizer price transparency and “conscious parallelism”
Question: Is there any effort to improve fertilizer price transparency?
Vaden: “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. We don’t currently have that from my point of view. There are not enough competitors in the fertilizer market space.”
“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.”
“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. And everybody just follows what Mosaic does because it’s the behemoth.”
“The legal term for that in antitrust law is conscious parallelism. That is the fancy lawyer lingo for what you just described [parallel pricing].”
China trade talks — beyond soybeans
Question: Will upcoming China talks include commodities beyond soybeans?
Vaden: “Oh, absolutely. I know that, you know, the attention span, unlike you, Jim, of the average general journalist is pretty small. And apparently the only crop that they know of is soybeans. And so that’s all they can write about. But at USDA and in the Trump administration, we are aware that American farmers grow more than soybeans.”
“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. 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.”
“But I know that there are other commodities, whether it be hardwood, sorghum, cotton, and just for starters, that need to be and will be discussed.”
“So even though the news media may only focus on one commodity, the U.S. government decidedly is not just focused on one commodity. We’re focused on the bigger picture.”
Cotton, China’s domestic production, and diversification
Question: What is the core issue with cotton and China?
Vaden: “There is the forced labor issue, but that’s not at the heart of cotton’s difficulties right now.”
“China historically bought a lot of cotton from us. And then as Brazilian acres increased, they began to source more cotton from Brazil. But then something interesting happened. China began to increase its own domestic production of cotton.”
“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. So they have replaced a lot of their needs for imports with domestic production.”
“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, to reduce their need for imports, whether it be from the United States or Brazil, and increase domestic production.”
“That’s what’s happened to cotton. 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.”
“What’s going on with cotton could be the story with other commodities that are much in the news right now, if we look down the future, 10, 15 or 20 years.”
“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. We want to sell to the world.”
“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.”
Meat exports to China
Question: What about beef, pork, and poultry access to China?
Vaden: “As you know, even beyond the tariff issue, Jim, China needs to approve shipments to their country from American plants. And during the trade disruption, they allowed those authorizations of American plants for many different types of protein to expire.”
“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.”
Most distressed commodities: cotton, rice, sugar beet
Question: Which commodities concern you most right now?
Vaden: “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. It’s cotton, rice and sugar beet. So those would be my top three.”
“Those are the commodities that are in the most financial distress in my point of view. They have high costs of production and they each have unique trade issues.”
Sugar imports, tier-two quota, and tariffs
Question: What is happening in sugar?
Vaden: “When it comes to sugar beets, we have had a surplus of imports into this country, a bunch of it coming in at the tier-two level, which until this administration have been allowed to come in tariff free.”
“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, way into our food supply.”
“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.”
“I think as we look toward longer-term solutions, we may need to have a conversation about the tariff level with sugar. The tariff level for sugar imports has not been changed in more than a decade. And the last time it was changed, believe it or not, it was lowered, not raised.”
“With the effect of inflation, over the past ten or fifteen 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.”
“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.”
Mexico sugar discussions
Question: Should the side agreement with Mexico be reviewed?
Vaden: “I attended the Ag Outlook Forum, of course, which the United States Department of Agriculture puts on every year. There was a panel specifically about sugar at which the Mexican industry had their representative on. And I found her comments very interesting. She seemed to be signaling that they were looking to do a deal.”
“They’ve raised their own high-tier tariff in Mexico, so they’ve done it before we have. They specifically requested that they thought we should do the same.”
“The ask that I heard from the Mexican representative was, we know you want to prioritize American domestic sugar. That makes sense to us. The only thing we ask of you is that when you need more sugar, please look to us in Mexico.”
“So it seemed to me she might be signaling openness to a deal, that maybe there’s a deal to be done here.”
Farm bridge assistance, SDRP, and specialty crop aid
Question: Is USDA able to do more economically for sugar and specialty crops?
Vaden: “With regard to the farmer bridge assistance program, the $12 billion dollars 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.”
“But that is not 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.”
“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 (SDR) stages one and two.”
“Now, if Congress were to pass additional monies, we would, of course, get those funds out forthrightly and follow their instructions in doing so. But for right now, those are the authorities that we have.”
Speed of farm aid rollout
Question: How much has already been paid out?
Vaden: “As of yesterday afternoon… and keep in mind, every time I get an update, it’s increased… but as of yesterday afternoon of the $11 billion dollars that we had set aside, more than $6 billion, or that is to say more than half of it had already been distributed. And we’re not even out of the first week of March.”
“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.”
“It’s two to three business days after farmers affirm their form is correct. Farmers will receive the money direct deposited into their checking account. It’s the fastest rollout we’ve ever seen of any program. It’s been enormously successful.”
Specialty crop data problems and acreage reporting
Question: Why has specialty crop implementation been harder?
Vaden: “Anytime we’re dealing with specialty crops for any type of payment program, we are at a disadvantage at USDA.”
“Our row crop farmers, they provide USDA with the data every year like clockwork. They visit their FSA office. They tell us what they intend to plant and then what they do plant.”
“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.”
“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.”
Specialty crop and sugar payment timeline
Question: When will rates be set for the specialty crop and sugar portion?
Vaden: “We have a sign up going on right now where we need producers to provide us with the data. Once that signup period closes, we’re going to 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.”
“I suspect that we will have those payment rates by the end of this month or at the latest very early April.”
USDA data modernization and public input
Question: Where does the USDA data modernization process stand?
Vaden: “Currently we have an open request for information. Secretary Rollins announced that at her speech at the Ag Outlook Forum. We’re asking, I think 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.”
“On April 22, we’re going to have our annual data users meeting in Kansas City, Missouri.”
“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.”
“This is not going to be a one-time thing. This is going to be an annual report that we’re going to do. This is going to be a process that doesn’t repair itself overnight. This is going to be an iterative process like any scientific endeavor. But the ultimate goal is each set of data is better than the last.”
“We cannot merely be an agency that puts numbers out there and then hides ourselves behind a brick wall. 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.”
Survey timing and moving to digital collection
Question: Farmers say some large NASS surveys arrive with too little time.
Vaden: “I was recently in St. Louis, Missouri. And as part of my visit there, I visited the National Agricultural Statistical Services facility where they mail out those surveys.”
“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.”
“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.”
Defense of USDA statisticians
Question: What is your message about USDA economists and statisticians?
Vaden: “I remind them what the job of our economists is. And their job is not to be popular. It’s to tell the truth. 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.”
“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.”
USDA reorganization and FSA staffing
Question: What is the status of USDA reorganization and staffing?
Vaden: “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. That option was broadly available to USDA employees. In some offices, more people took it than others. We’re now rectifying that.”
“We’ve instructed our state-level executive directors to let us know, and I know because I’ve had a meeting with Administrator Bill Beam and Undersecretary Richard Fordyce about this, they’ve got the offices lined up in terms of who needs the most help where.”
“Our reorganization will be largely done this year.”
“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.”
“We intend to do it in a way to respect those with school age children… and not be the horror story from when we were all young, the new kid who shows up halfway through the year.”
Hub locations, Beltsville, St. Louis, Athens, Lincoln, and the World Board
Question: Could there be additional hubs, and what happens to the World Agricultural Outlook Board lockup?
Vaden: “I don’t think enough people read the memorandum as closely as I, as a lawyer, would have them read it. While the hub locations are the points that will be receiving the largest numbers of employees, they’re not the only places that will be receiving new employees.”
“Among them that are specifically named in the memorandum are St. Louis, Missouri, and Athens, Georgia.”
“We’ve also recently announced with Senator Deb Fischer of Nebraska that USDA’s wonderful facilities in the Lincoln area will be receiving additional employees.”
“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.”
“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.”
“We are well aware of the security and other needs of the World Agricultural Outlook Board, how important that is. And we have taken that into account in our plan and in our future footprint. It has an entire backup system, including backup computers, a backup location to do lockup, et cetera, et cetera. So in the event of a calamity, the information would still go out and lockup could still occur. And that location is nowhere near Washington, D.C.”
Ag Trade Outlook report commentary
Question: Will USDA restore commentary to the U.S. Agricultural Outlook report?
Vaden: “It’s kind of a damned if you do, damned if you don’t situation. 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.”
“I think the secretary made the right call. We give you the raw numbers. We tell you what’s changed and everybody can add their own commentary to it.”
Asked if the current report process would continue, Vaden said: “I do expect it to continue. Yes.”
RFS, 45Z, SAF, and maritime fuels
Question: What can you say about the Renewable Fuel Standard (RFS) and Sustainable Aviation Fuel (SAF)?
Vaden: “With regard to the renewable volume obligation (RVO), our friends at the EPA have been hard at work… 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.”
“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.”
“When it comes to the 45Z rule, Treasury has put out its piece, but this is a triptych, if you will. There are three pieces to this work of art, and we’ve got the first piece from Treasury out, but now we’ve got pieces from USDA and the Department of Energy.”
“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.”
Asked if there is a timeline for the USDA and Energy information, Vaden said: “Not one that I’d like to make publicly.”
Question: Is the administration thinking more like Brazil, building domestic use and value-added demand?
Vaden: “I think it (coming RFS announcement) 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.”
“I’m excited about the prospect that sustainable or synthetic, whatever your favorite S is, aviation fuel represents. I’m even more excited about its maritime counterpart.”
“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.”
“Japan has the intention to put in place biofuel blending mandates for airplanes. They want synthetic or sustainable aviation fuel to be used. The Japanese government has stated as part of its trade framework negotiating with the United States, they want to buy SAF from us.”
“I just told the European Union … you need to be buying SAF from us and you need to allow that SAF to be from a crop-based feedstock. Don’t be foolish.”
Section 32 flexibility
Question: Should Section 32 authorities be made more flexible?
Vaden: “We do have to follow congressional enactments and as you know Congress has a cap… if we wanted to tap into that fund for more than that amount we would need Congress to raise or remove that cap.”
“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 fruits and vegetables in order to try to remove excess surpluses from the market.”
“We have made several large purchases of dry beans, which has been particularly helpful to farmers in the upper Midwest. And 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.”
Commodity Credit Corporation (CCC) borrowing authority
Question: Should CCC borrowing authority be raised beyond the current cap of $30 billion?
Vaden: “Well, it is still a lot of money. I don’t want to act like $30 billion is chump change. But it’s not what it was forty years ago when the cap was established because of the pernicious effect of inflation over these past decades.”
“If you were to do an inflation adjustment on $30 billion for when it was established, you’d be at more than fifty billion. You’re probably going to be closer to nearly double *$60 billion) now.”
“We keep [House Ag] Chairman Thompson, [Senate Ag] Chairman Boozman as well as our agricultural appropriators very close and we always have conversations with them about what the packages that they pass mean for our budget including the Commodity Credit Corporation, and we stand ready to make any suggestions or give them any data they need should they be interested in raising the borrowing authority.”
New World screwworm and Mexico cattle border
Question: Is there any update on reopening the border for Mexican cattle?
Vaden: “We want to follow the science, and we believe the actions we have taken over the past calendar year plus have had an impact.”
“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.”
“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.”
“The secretary (Rollins) believes her first goal is to ensure the health and the quality of the American cattle supply.”
“It’s my expectation that that plant will come online later this summer, late this summer. We’ll have that plant online and distributing sterile flies.”
“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. There will be no female flies produced.”
“We expect to be deploying this later this year.”
Cattle market margins, packers, retailers, and herd rebuilding
Question: What is your view of cattle producer margins versus packers?
Vaden: “It’s not just limited to the cattle market. 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. And the greatest share of the value of each product that is raised or grown is now captured by someone other than the farmer.”
“When I look at the beef market and I see who is currently making money, it’s not the packer.”
“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.”
“Their customers, the big grocery stores, whatever your favorite is, H-E-B, 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.”
“If we were to go back a few years ago, the situation would be completely the reverse. 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.”
“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.”
“We are beginning to see the barest minimum signs of people beginning to hold heifers back. And we want to encourage more cattle ranchers to do that.”
China purchase commitments and “unknown destinations”
Question: Will China keep meeting its agricultural purchase commitments, and will there be an official statement from China?
Vaden: “Every indication that we have at USDA, both public and private, has been just like they met that 12 million metric ton commitment [for soybeans] that everybody tried to rain down on and claim wouldn’t be met the first time. They continue to intend to meet the commitments they have made regarding 25 million metric tons [ahead].”
“I have no ability to control what the Chinese government says, but I will say that USDA, when the government is not shut down, we report pretty accurately the sales that are made that are notable for export.”
“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. If we don’t know, we’ll say X number of tons of soybeans or sorghum or whatever it is have been sold and they’re going to an unknown destination. But what we have learned over time is the large majority of those unknown destinations also end up being China.”
“So for most purposes, if you are 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.”
Outlook for U.S. agriculture now and in the future
Question: What would you tell farmers and ranchers that is positive about U.S. agriculture now and in the future?
Vaden: “Well, I would tell them as someone who grows commodity crops that I would wish the price were higher just like they. But when you look at the momentum that we have, things appear to be moving in the right direction. We’re not at the destination yet by any means, but there has been progress.”
“Look at our corn price. Our export momentum in corn is absolutely amazing. It surprises even market experts. And that’s why you’ve seen that corn price. Even after the USDA report, which got so much attention back in January, it’s popped right back up. And it’s right now at, or perhaps even just a little higher than it was before that report came out.”
“Why is that the case? We have incredibly high export sales, and our trade team is at work trying to ensure that more of those sales occur.”
“And for everyone who’s watching who’s not a part of the policy discussion every day, I want to assure them, every time there’s a trade discussion, it doesn’t matter what country it is, ag has to be on the table. If there’s not a win for ag, we’re not going to get a framework agreement. It’s that simple.”
“That’s why every agreement you have seen has an ag piece in it, whether we’re talking about Vietnam, Indonesia, Bangladesh or Western Hemispheric Partners, the European Union. They all have ag wins. That’s going to continue.”
“I have confidence that the EPA will be finalizing that pro biofuels rule very soon. That’s going to send a demand signal to the market. If Congress will do its job and pass E-fifteen as President Trump has asked them to do, that’s going to send a further demand signal to the market.”
“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, 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.”
“This is not going to be something where it’s going to be magic, Jim, as you know, and be able to throw a switch and one day we’re going to be back to $15 beans or what have you.”
