DES MOINES — U.S. Agriculture Secretary Tom Vilsack said demand for U.S. agricultural goods continues to grow, and fears about another farm crisis are unfounded despite record high prices for agricultural land.
“The difference is the level of debt,” said Vilsack, who was Iowa’s governor from 1999 to 2007. “About 70 percent of the (agricultural) land sales are not debt-financed.”
That compares with about 60 percent of the farms using debt financing in the mid-1980s, according to a new report by the White House’s year-old Rural Council.
Vilsack discussed the report Tuesday at a gathering with business and community leaders in Des Moines and in a telephone call while he wrapped up a two-day visit to Iowa.
The report notes that food agricultural exports for fiscal 2011 reached $137.4 billion, and those exports supported more than 1.15 million jobs. It also says that farm income set a record of $98.1 billion that year, and when adjusted for inflation it was the third-highest level for farm income in the past 50 years.
Vilsack said those statistics are indications of a strong agriculture sector, which the U.S. Department of Agriculture expects will continue to expand due to a growing middle class in China, India and southern Asian countries.
He also said free trade agreements with Korea, Panama and Columbia are expected to increase exports by more than $2 billion annually for U.S. farmers.
Vilsack added that there’s “a greater understanding” of genetically modified foods by importers of U.S. agriculture goods.
“We expect a demand for exports to increase by 70 percent in the next five years,” Vilsack said. “You can’t say ‘no’ to science and still meet that demand.”
He said agricultural scientific research goes beyond exports, and new energy technology will allow farmers to find increased markets in biofuels, such as ethanol. The country became a net exporter of ethanol in 2011.
“And there’s tremendous opportunity in wind power,” Vilsack said. “Iowa has the second-largest capacity in wind in the country.”The White House’s Strengthening Rural Communities Report is available by clicking here.