Transcripts For CSPAN Secretary Sonny Perdue On Agriculture Outlook 20240713

Innovation imperative, shaping the future of agriculture. This is a fitting theme for the secretary to announce, something that weve been working on at usda, called the agriculture innovation agenda. Were excited to share more with you this morning. Im joined by many of you that are working to shape the future of our agriculture economy. Its important we take stock not only of where we are today, but also of where we need to go to meet a growing Global Demand, with rising standards of living at a time when producers are dealing with uncertainties in the farm economy and the conditions needed to farm, including the climate. Our chief economist, dr. Rob johansson, will provide an indepth overview of the state of the farm economy. Theres a lot to take in in 2019, but certainly not a typical year. There were many factors influencing the economy, including extreme weather, trade, importing and exporting countries, to name just a few. Following dr. Jays talk, the secretary will outline some of the amazing progress weve seen and should be talking about more in the agricultural sector. Hell alsontioned, tee up what were calling the trend of success that weve seen to meet the future challenges, including doing our part to make sure that were growing enough food to feed a population thats likely to grow to 9. 7 billion people by 2050 while at the same time conserving our Natural Resources for the future. That will be followed by a fireside chat that the secretary will have with john hartnett, ventures,d ceo of svg a platform of corporations, universities, and investors focused on agriculture industries. Secretary perdue and dr. Hartnett will discuss the future of agriculture, challenges facing the sector, and emerging solutions that will address them. Tomorrow, secretary perdue will be joined by his colleagues, his ministers from argentina, canada, and mexico for a session titled, feeding the world through innovation. They will discuss cooperative innovation and global trade as foundations of global food security. A recurring theme that youll hear through this conference is this. Innovation. Innovation will be the key to sustaining the success of our sector. Here at usda, we are working to reframe this narrative on agriculture. Speaking of the future, i also want to acknowledge our 30 University Students who are in attendance as per disciplines in this years agricultural outlook forum. They are here participating in usdas 2020 future leaders and Agriculture Program. There attendance in this forum caps off a week long trip to washington, d. C. The program selects 20 University Undergraduates and 10 graduate students based on essays on agricultural careers and challenges. The students major in cultural related studies, including business, economics, communication, nutrition, food science, and veterinary studies. Fromists are selected colleges of agriculture. The future leaders is supported by academic institutions, corporations, and government institutions dedicated to promoting the education of the next generation of agriculture. This year, sponsoring organizations include the university of maryland Eastern Shore and farm credit. This program is one of the many usda,s that we have among the 1862 landgrant institutions, the 1890 historically black colleges and universities, the 1994 travel landgrant colleges and universities, and hispanic serving universities. These partnerships support Capacity Building initiatives and bolster education and Career Opportunities for students interested in a career in agriculture. I also want to acknowledge, as part of that, the 10 graduate students that we have in attendance as a part of that program. The usdas economic use Research Service partner last year with the Farm Foundation to create a new Scholars Program that takes these 10 graduate level students of agriculture through a Yearlong Program of training to train the next generation interested in agriculture finance and other applied fields of economics. Can we have all of our 2020 future leaders in Agriculture Program attendees stand . And lets give them a round of applause. [applause] stephen be sure to seek them out during the breaks because these are some of the sharp young minds that we want in agriculture and i know you want, as well. With that, i would like to say here is our chief economist, dr. Robert johansson, who unveiled the departments outlook for Commodity Markets and trade in 2020, and discussed the u. S. Farm income situation. Dr. Johansson. [applause] dr. Johansson thanks so much. Thanks for joining us today. Thank you for those comments, mr. Deputy secretary. Welcome to the 96th annual agricultural outlook forum. As the deputy just mentioned, we have a Great Program for you. Everything this year, innovation imperative. Thats appropriated mary many ways. Ill highlight two that underline comments i will make today. Year filled with uncertainty for agriculture in many ways. Innovative responses were necessary to get them through the year. Second, we know innovation in agriculture will shape our future. What can we expect for 2020 . I know youre waiting with baited breath. Lets get to the numbers. I want to talk about three main themes today. 2020 is a big year for trade, of course, with our top agricultural partners. Thats going to help sales and prices. Second, Crop Production should rebound and we expect record crop, meet, and dairy production. Third, the economy continues to show signs of stress, but there are hopeful signs. Low Interest Rates are reducing borrowing costs and land values. Lets start with the global economy. In january, the imf projected slover Economic Growth slower Economic Growth. The redline may not look like much, but it equals a lot in buying potential of 1. 5 trillion over that period, with almost all of that revision due to declines and growth in the emerging economies, such as india. Central banks have responded by collectively cutting Interest Rates 71 times across 49 different countries. Still, that being said, higher Global Growth in 2021, 2022 is expected, which should increase our opportunities to sell abroad. Now those estimates by the imf did not account for the most recent outbreak of the coronavirus in china, which has been impacting much of chinas economy. You can see here in january that the shanghai composite index fell by 10 in january with the emergence of the coronavirus, but it has since started to recover. Were tracking this on many levels. Weve found significant supply chains, and we expect less spending by chinese consumers, specifically in the first quarter. That may reduce purchases such as meats. Privatesector forecasts with over their forecast by as much as two percentage points. Its far too early to tell what the final impacts will be, but most of those forecasting operations expect secondquarter, thirdquarter, and fourthquarter china to rebound. Any perceived risk of uncertainty often strengthens the u. S. Dollar. And thats what we saw last year as a safe investment. Trade uncertainty and Interest Rate cuts kept the dollar strong in the first part of 2019. But over the second half of the year, the dollar depreciated against several currencies. We saw moderations in china, resolving uncertainty above brexit. And we saw Higher Oil Prices in the end of the second half of 2019, which supported both the australian and the canadian currencies. Classes are Interest Rate cuts by some central banks, such as russia, which help their currency. Incidentally, the coronavirus led to an appreciating doll not reflected in these slides. Despite the mixed economic signals, there have been important progress that im sure were going to talk about. Thats going to improve access for u. S. Agriculture in 2020 and beyond. Three main trade deals well hear about cover half of u. S. Exports. The usmca will lower trade friction between our north American Trading partners and is expected to grow the market to more than 41 billion in 2020. Japan u. S. Agreement will lower tariffs on 7 billion on exports and it will equalize Market Access for u. S. Beef and euk, similar to those by the and canada into japan. And their market. The phase i deal with china will boost sales to the main agricultural customer, however there remains much more work to do, such as gaining better access to the 1. 4 billion consumers in india, and our trading negotiators are working on that as we speak. Im going to put up a slight here and hopefully this works. This is the first time ive tried this, but this shows some of what were expecting in trade and what were excited to see. This is a timeline of different economies and the size of the bubble reflects how much wer u. Product theyre purchasing from us. The per capita gdp is along the x axis. Three decades ago, japan was our largest market at 8 billion. At the same time, our experts were concentrated on the eu and canada. Exports at that time were less than 1 billion. Exports to india were 200 million. China had gdp capital of 200 a person. This changed dramatically. The assad that in 894. U. S. Agate you saw that in 1984. Wto commenced boosting Market Access globally. In 2001, china entered the debbie tio the wto. He was exports over the last half decade declined over increased foreign competition. And in 2018, exports slowed dramatically, bringing us to well watch it one more time and go to the next slide. You can see china and india starting together. Turn opens to the global marketplace, starts growing dramatically, as well as exports in india yet to take off. Highlighting the importance of getting into that market in the future. Where are we today in 2020 . Four 5are forecast at billion. China forecasting at 14 billion for fiscal 2020, up from 10 billion last year. That reflects Public Information available right now, but the trade outlook forecast also reflects uncertainty that i mentioned earlier. Is currentlyt expected to be canada, forecasted 21. 5 billion. Fornd japan slightly down fiscal 2020. Again, just to emphasize the calendar year, phase i commitments are not reflected in a fiscal your calculation completely. One question we get is what to expect the largest growth to be in import demand the next 10 years . Global demand expects especially emerging markets, are expected to grow global exports. The prospect for additional exports is strong, growing at least two 186. 3 billion. Overall, trade is expected to increase by 37 million tons, up 17 , with big markets in mexico, egypt, and south america. Global trade is expected to increase by 36 million tons, up 24 , mostly in china. Global wheat trade is expected to increase by 30 million tons, up 60 , mainly in africa and the middle east. In the world meet trade is expected to grow a million tons. Alright, lets turn to the 2020 crop and livestock sector. First, lets recap in 2019 and what we saw for usda forecasts. As we all know, 2019 was a very wet year in much of america. Stillvest, wet weather hundred progress. Hindered progress. Some natural gas shortages and price spikes occurred in many areas. In parts of north dakota, minnesota, wisconsin, early heavy snowfall on top of what ground ended fieldwork early, leaving significant acreage for harvest in the spring. As you know today, were coming out with estimates for the 2020 year, and this is what we had last year for corn in 2019. Estimates are based purely on supply and demand fundamentals and price expectations. We do assume normal weather. Of course its fairly wet out there right now. The first estimates released in may, and that reflects the surveys released at the end of march. In june, we reduced acreage in yields. They released the acreage of report. Given the high corn prices and signals to plant corn, it is not surprisings farmers so they will plant more corn in the july estimates. In august, the report Monthly Service based data, acreage and yield estimates coupled with administrative data and satellite information. As you all know, in august, the surveys came in noting fewer came in as expected but higher yields than forecasted. Its pegged at 14. 9 billion bushels, significantly different from the average trade estimate from many of you in the room by more than 6 million bushels. What did we see . Many farmers outside, and outside analysts felt the analysts did not reflect the poor planting conditions that were seen on the ground in many states. With the estimates did reflect was what farmers were saying on their surveys, coupled with satellite information as well as administrative data. A Market Correction happened in august, falling almost . 50 a bushel, frustrating farmers dealing with. Frustrating planting conditions one thing we heard this year is why doesnt the usda you satellite information to help them with their estimates . Of course, weve been using satellites for many years and weve been Getting Better each year as they approve improve our ability to increase production. You can see how improved satellite information has helped usda refine their estimates over time, going back to the 1970s. We havent seen a year when the corn Crop Forecast in august was more than 7. 5 of since 1995. And the deviation spent less than 5 over the last five years. Again, ever estimates in august, relative to the final, and the orange, is the estimate relative to the final. Lets look ahead now to 2020. A question out there is where are we going to plant all those acres . Corn, soybeans, wheat, averaged 2. 7 million acres. Looking at the principal crop acreage for the principal crops, acreage was down in 2019 by almost 60 million acres, most of that coming from soybeans relative to 2018. Again looking across the United States, we saw significant planting, prevent plant and unplanted acres in 2019, relative to 2018. Where are we going to put those acres . We expect a good portion of those to go to soybeans in 2020. Lets look at what the price fundamentals are. About thet we think upcoming demand for those commodities, and we can see strengthening in the Balance Sheets for corn and soybeans relative to wheat and rice. So we expect better returns visavis those commodities for corn and soybeans. Ilarly, we expect going growing Global Demand for diets to stimulate demand. Here, we see its not just the United States improving their output. Brazil is optimizing theres, utilizing double cropping, more soybean acres and a second crop corn that has taken over brazils first season crop. Current record production is pegged at 4 billion bushels of corn and four point 6 billion bushels of soybeans. In addition, planting decisions will be affected by a number of factors, such as expectations about trade and tariffs, and prices compared with input costs. Current futures prices point to a larger u. S. Corn crop. The ratio has dipped to four euros. We know that local demand and transportation crops will drive regional plantings. Priceample, we see that is currently favorite the planting of more soybeans as opposed to planting more corn. Under anticipation of return to , we project that Soybean Prices will rise ,odestly this coming year supported by lower stocks. Last years record level. Contrast, corn is suspected to decline with an expected return to trend yields. It is reflecting low ending howeverrices remain low conditions and they return normal trading patterns remain a significant uncertainty for the coming. Coming year. Last years difficult he resulted in millions of fewer acres, equivalent to roughly 600 million bushels. That supports an increase in soybean acreage. Following last years prevent plan, it sets a relatively favorable price to corn. Lets turn to meat and dairy production. Production will set another record at 8. 8 billion pounds. 1 andion will increase boiler production up about 4 the increasing production has been accompanied by increasing exports with more than 25 of production expected to be exported and nearly 20 of dairy. I will note record dairy production. I will let you take a look at the slide really fast theres a lot going on here, but this tries to encapsulate what is going on with african swine pflueger fever in one slide. Theres a lot going on. We have seen significant production andk we expect reduction of another 80 million. Chinese pork prices have spiked to 250 of what they were one year ago. The eu is seeking to increase to chinaork exports phase i deal in place, we would expect a larger portion to come from the u. S. Lets look at the loss of chinese consumption and supplies. It is far larger than global trade of pork and will take some time to resolve. Total trade is 4 Million Metric Tons plus another seven. So we have got a significant hole inproteins protiens which will be filled by other, higher exports of pork from the United States. Steer priceshat are expected to close slightly up. Strong demand for pork is expected to support an increase in prices. Milk prices are expected to strengthen slightly in 2020 as well. Lets look a little bit closer. We know that milk production is expected to grow over the next 10 years, prices are only expected to increase 5 . Production has been through increased gain in milk efficiency. However, dairy remains a sector experiencing structural reform. Recent mass census shows how the distribution of dairy operations to fewer butnging larger operations. Cows arehat half of being built on operations less than 1000, five times higher than we thought 20 years ago. The reason is apparent in this chart, showing the cost of production for dairy farms across the United States. The chart shows that the majority of operations have caused a production greater than the price. Occurring inis Operations Costs higher than the price based on this, we would expect continued consolidation in the sector. Lets turn to the farm economy and foreign policy. Farmers faced. S. A number of natural disasters and the usda responded with the tools available. In addition to those tools, they have implemented the wildfire indemnity program, plus, they have provided payments to producers affected by natural disasters in 2018 and 2019. Looking back, if we look at sentiment of farmers over the last year, we can see that, by and large, most of these indices that we track, the barometer from the survey, the Dow Jones Industrial average are all up relative to this time last year. In may come farm sentiment fell due to an increase in trade tensions. May was the lowest overall index. N june, the barometer rose in rose with the plant and so did the barometer. Prospects have included improved trade relations and prospects about the future continue to improve. There is a large boost of after the deal was signed by china and the u. S. Farmers are optimistic. Bout the next six months lets turn to Farm Household and. Farm Household Income is a good benchmark to look at when you think about family farms. Overall, Household Income 8000 to more than 300,000. That is typically found above the median Household Income. 50 of, there is roughly farms out there that do not earn positive returns. Operatorsf farms have where they list another job as a primary occupation. A growing u. S. Economy helps the Household Income but low economy prices have weighed on Household Income. It has rebounded slightly since 2016, in part due to high levels of indemnities and government payments. Income tonet farm rise slightly with higher cash receipts. Payments andt more indemnities on normal weather. Usually, when we think of disaster payments normally we are talking about crop insurance. But in this case still covers the bulk of most of what is lost. It still shows up in the 2018 and 19 numbers for those years. Again,been important, this portrays the importance of the program to providing that basic safety net. Similarly, the billions in msp payments will be paid out in 2019 and 2020. You can see how the Program Payments were targeted to the exceedingh msp millions states like texas and north dakota. Trade is affected by tariffs and on the left, Program Payments expected. Farm debt is forecasted at 445 billion with 265 in real estate that. Overall month farm sector debt is near its peak from early 1980. Equities are forecasted to increase very slightly while debt is anticipated to increase slightly. That puts the debt to asset ratio at 13. 6. Still low, but the highest since 2003. Rates are expected to remain low, which has kept Debt Financing manageable and maintained equity high farmland over all values can mask areas of greater vulnerability. Asset ratios have been slowly , butg for several sectors overall, the number of crop ream remains constant over time and is stt sitting at about one in 16 right now. Overall, bankruptcy rate has remained level. While it has increased year over year, the rate is still historically low. Interest rates and inflation remain low, which helps maintain Farmland Values some states show higher than average encrypt the others have9, but rates lower than the average. Most bankruptcies are in line with a historic average, again, the redline here being the average. If you are above the redline, lower bankruptcies. Overall, going into 2020, the basic outlook for many farms looks better than it did that steer. We have expectations of better trade, whether, and continued lowInterest Rates. Nevertheless, the Balance Sheet remains tight. Exceedsst generally expected revenues in many regions with cash flow difficult for soybeans and wheat in particular. The Balance Sheet does not include payments. The 2019 payments are not included in here, but this just farmers renting land are going to have a difficult time. Farmers that do have significant and equity are in a better shape going into 2020. But me put some slides together. Current conditions point towards an improved outlook for 2020. Is expected to improve opportunities abroad and we returned to normal trade with lower friction and costs for producers. Economic fundamentals are stable and Interest Rates remain low. Equity remains high relative to debt and we have stable land values. Weather conditions are harder to forecast into the new year. Theres a lot of precipitation over the last weeks and months, but we would expect conditions are better than the historic conditions we saw last year. That should improve outlook for crops and other commodities. Up based on to be price signals we are seeing. Stocks are poised for continued growth with record production. This is paired with continued Global Income growth in 2021. Intense, production is particularly with countries to the south. In brazil, we continue to see coin and soybean expansion and production. Agricultural productivity remains strong and that something we will hear about. Continued investment is the key to maintaining arc it off market profitability. So what are our expectations . Reachtion of crops should 612 million tons over the next 10 years. Thats up about 10 from this time and this is on the same amount. Somethingctivity is will continue to hear about and it remains one of the only ways to ensure problems. We know that markets are drivers are tos be efficient and to innovate. Shown time andve time again their resilience. More people will have access to food as prices fall and economic boosts growth purchasing power. Get much more remains. The number of people were food insecure had risen to roughly 10 of the global population. Innovators have a vital role to play in responding to demand. We can see that the number of undernourished is moving in the wrong direction if we are to meet our u. N. Targets of zero hunger by 2030. Our producers and innovators will have a vital role to play. Now, it is my pleasure to introduce the usdas 31st secretary of agriculture, sonny perdue. Do be speaking about the innovation agenda. Perdue. Elcome secretary [applause] good morning. Welcome, everyone. It looks like we have a full house today. We are delighted to hear the 96th annual cultural outlook summit. Raise your hand if you were here first on . Here the first time . Looks like some of you. Our mission here is the future of agriculture. We are delighted to have you here. Not tell the story of agriculture very well. What we will be doing over the next year is sharing where we have been and where we want to go. Include an agricultural success story. You honor students dont need to read it all at once, i will go towardone so you valid so you valedictorians trying to take notes, we will go forward. Producing, good at they are just not good at telling. Quiet andem are quite dont talk about what has happened. But this is the story of the last 90 years of u. S. Agriculture. Production and fewer resources, that is the story. What does that mean . It means we have opened export opportunities, and if you look at trade, we have offered export necessities. Because we are producing more, we are contributing to the trade balance, and more importantly, we have kept food prices low for our American Consumer families. Is making americans spend less on their paycheck they had almost anywhere in the world. We have got some facts to back that up. Of americanstory agriculture. See over the last 70 years, u. S. Output has almost tripled three times while inputs have only increased 10 annually. You can see here the line of agricultural output and what our economists would say is the total factor productivity, it has been wonderful in that way. It has been a great story, and the indicators of how efficient our sector has become. Tell, butat story to we have not really done that. Innovation has made this possible. We know farmers are great innovators and entrepreneurs and oem equivalents sorted in a farm share. They have innovated their way to success because they have made this possible. Behind thed to stay farm gate, go to the shed, and do what they needed to do. Its important for us to illustrate the truth about american agriculture and it is really important as we go. We understand that the United States model of private sector information encourages farmers to adapt the latest technologies. There are increases hear from technological advances we see all the way back to 1929. All the various kinds of things. Biotech issues, drought research, all of those things. Technological innovation has improve agricultural productivity over the years. That is why we continue to do that. We have to focus more on aligning those things as we go forward. Embracing technologies allows farmers become more efficient while improving bottom lines. Even in the stressed dairy sector, you can see productivity gains over the last several years. 90 years ago, we had this many cows now we have 60 fewer but twice as much milk. That is one of the reasons dairy is so much sector. To keep costs low for consumers while the livelihood has been under stress. We hear a lot about methane emissions per gallon of milk, which have dropped over 50 as we go forward. We know about precision adoption ofand isicultural technologies enabling farmers to boost productivity. When i went to the progress show in 2017, i saw technology there ripping that soil and placing about half of the nutrients there. In the spring, coming back and placing the seed. That is quantum productivity increases we are seeing in our and innovation that is driving these kinds of technological advances. Datadriven decisionmaking and digitization. I was telling john that the best farmers use great ai on top of their shoulders, intuitively making the best decisions. That, we willze go several decimal places the right and make even better decisions. They can make better, digitized decisions Going Forward that means less input, better utilizations of water and using technology of the future. Innovation will continue to drive. We see these on 60 of our iable land regardless of ops cant compete with gps guided. We will keep reminding of the access to reliable, affordable conductivity. It depends on Rural Broadband in the stead and the field for this corrected precision agriculture. It is one of the most transformative things we can do from an infrastructure perspective that really matters Going Forward. Not only have we done a great job productivity wise, but from a conservation perspective. Thats because they live on the land and are smart enough to note not to poison the land. Any farmers goal is to pass the land along to the next generation. My father telling me that my responsibility was to leave it better than we found it and thats what we are doing today. Since 1980, farmland has decreased while forest land has increased. We know that increases Greenhouse Gas issues. Farmers are doing a better job because they know it helps productivity. Rather than having topsoil eroded, they are doing a great job with a decline in soil erosion. That is a real conservation effort and i think modern. Echnology can do even better used widely but still not universally adopted and what we hope to do is give the data and facts where farmers can adopt these technologies and make a different difference. The story of american agriculture is doing much much more with much much less and thats what we want to talk about. All of thet with successes we have had, there are challenges ahead. You read about them in the press. Nd from consumers most will tell you that the World Population is expected to be about 9. 710 billion people. Thats a lot of hungry mouths to feed. Is totto since we began do right and feed everyone, how are weallenge going to feed everyone by doing right . Those are the sustainability goals we are talking about. We want to announce today a new innovation agenda Going Forward. That is what is going to drive the successes, and agricultural innovation agenda. The real question is how we are going to do it. There is a departmentwide effort to provide all farmers with the tools they need to be successful and position american agriculture as a leader in the global effort, to recognize our role is to support farmers of all sizes. Innovative, older farms doing great things thered i was in michigan where this one man left a highpaying job on three acres. She was growing flowers for the wedding industry all over the world. Got a lot of innovation and creativity out there. Tohave challenged ourselves set goals and hold ourselves accountable. Stimulate the innovation of American Culture and achieve the shared goal of while wee with less reduce our contribution to the footprint by half in 2050. That is an attainable stretch goal and we think we can get there. Were going to stimulate innovation so agriculture can work towards a shared goal while cutting environmental footprints. Its going to take all of us to do that and alignment to do that. That is how we define doing right and feeding everyone. How will we get there . We get there strategically by working together with an research and public and private entities we will align metrics and data in four ways Going Forward. In research, our plans are to develop a strategy that synchronizes public and private Sector Research and communicates the questions we need answers or we have got so many things differently in design, digitalization, prescriptive in it mention intervention and all kinds of things. I got a chance to travel all over the country and world and look at what is happening out here. Interesting things like light Spectrum Technology and the opportunities that we never would have imagined before. Research is part and we wanted bothign our programs with nsa dealing with farmers and our producers out here. To align the work of our research and deliver it through with communication tactics across the globe so that we can integrate the Innovative Technologies into our programs. ,s you know, sometimes government regulations lag technology and whats going out in the world. We want to be shoulder to shoulder on a regulatory perspective acknowledging the changes so that we can lead that way rather than hinder. Many times, the private sector is hindered by whats available as this moves out through the industry and innovation. This is so we can fasttrack the implementation of the Cutting Edge Technology everywhere we want to go. Then, we are going to measure. Importantd data are and we are in a great place to do that. We need to make sure we do it in a way that preserves privacy. We know farmers are private about our data. Data ando guard the help the private sector accumulate the data while making sure we preserve the data and as we go the right way forward in analyzing data and production. We have got a lot of very clear priorities that are going to come from big data. Andave a lot of data sets we are trying to make those more publicly visible through technologies and dashboard so that everyone can have access to make better decisions. Then, im from the old school. We cannot afford it just to practice Going Forward. Right,are going to do it you had better keep a score. We are looking pretty good here. Is where we want to be in 2050. Lossnt food waste and food , you know the statistics about that. We could reduce loss and waste from the field where we leave to the consumers place. Thise so blessed in country to have an able supply of food. We take it for granted, but we are wasteful about it. We cannot do it if we have the moral imperative feeding everyone. We have got to make this part of the discussion and we are already developing champion in various sectors. We are going to bring our retailers in and make this a goal for all of us. We want to do more with less and we believe agriculture can be art of the solution. Sequestering carbon that we already have goals and demonstrations. Good news is that while we sequester carbon, it improves soil health which improves ductivity thered productivity. Farmers win by doing right and they win by sequestering carbon, using the farming techniques that keep the carbon in the soil, improving the productivity of those soils as well. From a Water Quality perspective, we know in a lot of places weve allowed nutrients to escape our fields. We can do better and our goal is to reduce that nutrient runoff off of our fields and farms by 2050 in that way. We think farming can be a real contributor to our air quality through Renewable Energy and weve seen that already through our ethanol and bio fuels industry, but we think we can do more in that way by creating a better environment for renewable fuels. Hopefully really moving forward with goals of 15 of our Transportation Fuel moving to that. These are all important goals, but were going to have a scoreboard that keeps track of these. Were not going to wait until the buzzer sounds 00 because you know that its progressive and were going to have really annual types of indications of trends of where we are in providing data to the industry and to the world to know were serious about this and serious about making these goals by collecting more timely information thats useful to our customers, i think we can ensure that were putting points on the scoreboard and making these kind of scores good as we go forward. Because why . We want to win. We want to win big. I mean look there. Its exciting when you win. You celebrate when you win, right . Its really important to win. Thats what we want to do as we go forward and winning for the world and doing right and feeding everyone as we go forward. You know the challenges are meeting the fuel, fiber, fuel, feed, and environmental demands of the future is going to require some challenges, going to require all the things that we talked about. Innovation is the key, aligning the public and private sector as we go forward, and the real question is, will you join us . Will you commit yourself out there in your various sector and sphere of influence to dos the right thing of u. S. Agricultural innovation agenda. This is our mission, should you choose to accept it. Will you accept . [ applause ] now, i would like to invite to the stage someone who has accepted that mission and it is john hart net who is quite an innovator and investor here and is going to talk were going to have a fireside chat here about the kind of innovation. Hes a futurist in so many ways and hes done a lot of things and i want to invite john. Join me at the stage so we can have a conversation about the innovation imperative shaping the future of agriculture. Thank you, secretary. [ applause ] music as i indicated john has accepted that challenge, that Mission Impossible of doing more with less. John i feel i should have come out of the ceiling on a rope down here. You missed the rope. We werent quite secure, we didnt want you falling. Nonetheless, youre an innovative guy. Thankfully i read your bio and its amazing what youve been involved in. I told john earlier, i dont know if you remembers the palm pilot but john was one of the early innovators that area of the palm pilot and hand spring. He was delighted to know i was a palm pilot user as it went forward. Hes leveraged those technological skills and become leveraged in the food sector knowing how important it is. John, i appreciate you making the trip to really talk about the alignment of the private sector and the Public Sector as we go forward. Youre the founder and ceo of sbg ventures, an investment and Technology Firm and you founded thrive which i had the opportunity to visit with you last year in california, a leading ag food Innovation Ecosystem comprised of the top food and Technology Systems using the digitalization we talked about for doing more with less and very innovative kind of ways. I know thats kind of your bio, but what do you really do, john . Well, ive been in Silicon Valley 22 years and you might notice i dont have a Silicon Valley accent. Im originally from ireland. I want to get my agriculture credentials out early here. I dont want to be accused of being a tech city slicker. Eight and nine and ten years of age i drove my horse tractor. I bailed hay in ireland. I worked on a dairy when i was about 14 or 15. My early years were in agriculture. Thats where i got my big values. Right. In Silicon Valley, look, i had an opportunity to be there for basically a revolution of the smartphone. I think everybody in the room here today has a smartphone in their hand. Its changed our lives. But, you know, in the 90s that didnt exist, and we had to kind of project forward to say okay, will this how will this happen . We looked at some of the key trends in terms of connectivity and how that was going to project forward, driving costs down and kind of getting the size of computing to fit in your palm and that was how they called the company. We invented the smartphone and created about a 5 billion business from that, over about nine years. Thats kind of my a big part of my background. About ten years ago, i set up sbg ventures and we set up an accelerator to be able to accelerate companies. Having been a ceo, having been a coo who has set up companies, companies dont happen easily. Its hard work, having a great team, building a manufacturing operation and distribution. We took the approach to build an accelerator and bring key mentors around those companies to be able to help them, you know, drive forward. Birthing and getting them weened is a challenge, right . Yes. I think that, you know, thats kind of my early days. I got into the agriculture world really by accident. You know, we i think Everybody Knows Silicon Valley but obviously california is one of the richest land in the world, obviously a leader in the fresh food category and specialty crops, and even though Silicon Valley and Salinas Valley, you came here last year and it was phenomenal for you to come down and walk the fields and meet with taylor farms and the Technology Companies in Silicon Valley, but even though we were an hour apart, the world of agriculture and technology we werent communicating as best we should and trying to align that was a big part of why we started to do this. Well that really leads into my next question. You heard the outline of the goals today, doing more with less, using innovation and technology to get there. Talk about how that alliance with what youve already seen in the private sector and aligning with the Public Sector for these audacious goals of feeding 10 billion people by 2050 . First of all, these goals, i think theyre bold, theyre ambitious, but its something that we need. You know, this is probably the most important industry on the planet, it touches every family and every life on this planet, so this is probably the most Important Mission for all of us. I think that alignment with entrepreneurs, you know, my experience has been entrepreneurs can really change the world, they can bring new innovations, new technologies together and disrupt industries and if you look at the sequence of events over the course of the last 20 years, whether to do with fin tech or entertainment or how you use entertainment, this comes from individuals and entrepreneurs that have actually done that. The world of agriculture is not straightforward. Its a complex industry, its a complex supply chain. I think having these goals really kind of set the bar, but i think really aligning the industry, aligning entrepreneurs, aligning innovators, with the problems and understanding how theyre going to solve those problems and use the technology and innovation to solve these problems, this is something that we did at thrive, you know, in california. We brought growers up from Silicon Valley or Salinas Valley up to Silicon Valley and sat down and talked to the innovators about the problems that they have around labor, food safety, Water Quality, you know, water scarcity, et cetera. I think the key thing is to enable innovation and unleash innovation you have to direct it and focus it on the problems that youre most feeling the pain and i think that will help driving a lot of the innovation Going Forward. I think thats a big change of what we at usda have recognized, is that weve got to asks the right questions to solve the Biggest Challenges of agriculture. Now what i would like to hear, your honest appraisal of how does usda do a better job as a neutral arbiter of not picking winners and losers, but facilitating the private Sector Research with where we need to go in that way, helping to synergize and synchronize both the production challenges i hear . What are the best producers asking that needs to be solved next and helping to align the research between both the public and private sector . What role do you see usda playing in that . Yeah, i mean i think its obviously a very Critical Role in terms of theres a lot of animals out there innovation out there. I think over the last five or ten years farmers are seeing more sensors, applications, data, more solutions and i think theres so much confusion out there in terms of being able to understand whats the best technology i should be using to drive yield to solve some of the challenges there. I think guidance and education and putting a road map out there for farmers to really kind of understand and see what are the top technologies that they can apply. We just did our thrive, you know, top 50. We evaluated 3,500 startups from over 90s countries around the world. You might want to take a little time to explain what thrive is and the competitive aspect of thrive, almost like an agricultural Food Production shark tank type of thing. Yeah. So we set up thrive really to as an accelerator to accelerate innovation and solve the problems of the agriculture sector. We also work with major startups that are, you know, Like Companies like plenty and aero farms who are trying to scale under a controllable environment agricultural sector. Working with entrepreneurs on one side and on the same side working with farmers. Were working with western growers, over 2,500 largest farmers on the west coast of the United States, land o lakes across the midwest, really to understand the challenges of the farmer and at the same time working with 3,500 startups and entrepreneurs that are solving these problems. Were kind of sitting in the middle and weve driven programs to address the problems with the farmers and also bring the community together. You know, seven years ago we founded the ag tech summit with forbes media and you came to visit that last year. The whole idea about that was the thrive challenge was to bring the ecosystem together, you know, bring farmers, researchers, innovators, entrepreneurs, corporate Technology Companies, so that we can get after these problems so its a combination of the foundation of what were doing is the ecosystem and bringing that together and putting programs in place whether its the programs around accelerating technology, identifying the problems of the farmer and investing behind those as well. Weve worked very closely and carefully with the industry to identify these challenges. It sounds like you and sdg ventures and thrive are already doing what ive challenged all of us today to do, is to align the public and private sector. Youve gone to farmers and taking the match with investors and match with technology and innovators and entrepreneurs of finding solutions that way. Thats what i hope to really add usda as a Public Sector partner of facilitating more of that. What do you have specific recommendations of how we can engage . As you know, youre not the only one. Theres a lot of interest in Silicon Valley in the food sector now. A lot of investment and a lot of interest and its almost like after the technology revolution, theyve kind of discovered that the Food Industry and the Food Supply Chain that really needs focusing. Yeah. I mean look, i think when investors and Silicon Valley, you know, Big Companies look at this sector, the ag food sector in the Food Supply Chain is an 8 trillion industry. When you look at some of those graphs you talk about in terms of a growing population, growing to 10 billion people, but also a changing consumer, you know, 50 of the current, you know, population is genz or millennials who are changing the way theyre consuming and eating food, and at the same time youve got the challenges around water scarcity and all the challenges around labor, et cetera, that gap, you know, its hard to keep doing what youre doing. You have to innovate. I think thats where weve kind of focused on the innovation in those areas. But then as you kind of as we kicked into this, we have to get the entrepreneurs aligned with the problems. How we did that was we put a challenge out to entrepreneurs. Instead of a generic challenge and saying hey, lets increase productivity by 50 , were saying okay, robotics automation is going to make this impact, controlled environment is going to make this impact, bioscience is going to make this impact and digitalization and data is going to make this impact. Kind of breaking down the aspects of this, putting a challenge out to 5,000 entrepreneurs from around the world and getting them to kind of come up with the ideas, the innovation and then pitch live on stage, you know, five years ago we brought entrepreneurs from around the world into the western growers, a group like this, and the sharks on the stage were the farmers asking the tough questions in terms of how much is this going to cost me, how is it going to improve my yield . Its kind of putting the entrepreneur and the farmer together and addressing those challenges and those kind of programs like the challenges i think can be very impactful. We need to go out to industry with these challenges you set the bar, not just industry in the United States but worldwide, there are countries around the world here like israel, you visited netherlands earlier this year, i came back from australia yesterday, you know, you look at countries canada, brazil, they have all the same challenges. They are innovating as well. How can we collaborate with those countries as well and maybe get some of the best of the best from some of these other countries to make us, you know, more competitive in wa what were doing. Its a combination of the global aspect, aligning the problems, and focusing on these. I love what youve done here. I mean having a scorecard, having it right up there transparent with regard to this is the bar were going for, were going to hold a team accountable for this, these are this is the road map and then were going to measure this year by year and see how were performing. You know, i dont play american football but i play soccer and rugby and you can be on the field but if you dont score goals youre not winning and we have to score those goals. I think having that kind of transparent view i think is going to be very, very important as we move forward here. What you described as far as segmenting the focus of research, i didnt have time to get it into this morning, thats exactly what we want to do with our usda agricultural Research Service is really to identify the real challenges and problems. What are the barriers and limitations here and deal with those things in various sectors and i know dr. Hutchinss will be talking more to our industry as a whole about that to do that as we go forward. We look forward. Thats a great strategy and i hope you dont mind us copying that role. I know probably whats on the mind and on my mind and the mind of people out there, we want you to give us a peek into the future. You have a front row seat at some of these types of industries that are burgeoning out here and just developing, whether theyre just sprouting out of the ground or whether theyre growing good, tell us what you see. Whats the future of some of the exciting things that you think will help us meet some of these goals . You know, i look at it in a couple of ways. Obviously were looking at entrepreneurs and seeing technology, Venture Capital investing into the future and where is Venture Capital going and placing the bets for the future in terms of technology. When we did the analysis of where all these dollars are going in terms of Venture Capital, obviously bioscience is going to continue to drive the way in terms of, you know, driving doing more with less. I think precision agriculture is going to step up in a really big way. I think investment in controlled environment agriculture, theres a billion dollars already gone into this from the private sector. Companies like plenty and aero farms, for example, theyve raised 600 million. Theyre no longer little startups. These companies are scaling, theyre growing leafy greens, testing out berries today, and i see this as being a really interesting supplement to the challenge that we have. I dont see it i dont see controlled environment and vertical farms as a competitive force. I do see it supplementing what were doing, but i see that as kind of a key path Going Forward. I also see that in terms of the supply chain itself, you know, putting farms in the Distribution Center or vertical farms, i think is definitely going to be taking place in the next few years. Robotics automation has played a major role in what were doing today. I think investment into this space, again, has not has the same at the same level as it should be. I think this is an important area where we can drive, you know, Automated Vehicles that are theres nobody on the vehicle and that theyre actually driving and doing the weeding and seeding and driving solutions there and i think thats what youre going to start seeing. Theres companies, i think you met in Silicon Valley, a Company Called farm wise and blue river technologies, these are some of the technologies that already exist and i think theyre going to let me tell the audience about that. Yes. I didnt realize this is one of the companies you helped to accelerate there. Yeah. We were in the Salinas Valley and these two guys showed me this machine where, as you know, theyll put many i believe it was cabbage there, many seeds in the row and then you had labor come through there and thin out the most unproductive in a space there to leave hearty plants there in a regular space. Well this machine autonomously went downs the row, it had optics there that would choose the most healthylooking seedling that had come up there and inject some nutrients into that and unfortunately for those weaklings it put them out of their misery. So that was what i saw autonomously saving i think about a crew of 25 labors. Thats right. And doing it like five or ten times faster. Yeah. That was a great example that i saw right there what innovation, sensor technology, Optic Technology can do autonomously driven that was pretty amazing. One of the other things is dris driscall berries are driving robotic in the harvest auto makes. Picking strawberry, thats going to be amazing as you see that scale today. The other one is data. Data is one of the issues that is out there, you know, data without a. I. And analytics is useless. At the same time, its a challenge in terms of the trust and sharing that information. I think this is going to play a key role in terms of the future. You know, secretary, i would say one thing, you know, when we were in the smartphone industry, when apple announced they were coming into the iphone in 2007, the technology was around for ten years beforehand, when the internet started, the technology was around for 20 years, so i dont think its something thats going to be invented in the next couple years thats going to be the big breakthrough. I think its going to be adoption of the technology. Right. I think, again, this is where the usda can help farmers to adopt some of this technology. I also feel like some of the big players that are sitting on the sidelines today, google, and amazon and microsoft, they are starting to embrace this space. I think once they come in, i think it will really kind of put that inflection point, you know, in there terms of this productivity and obtaining a productivity goal. Right. You talked about something i want to go back to for a second because traditional agriculture and traditional producers sometimes hear this geewhiz futuristic kind of thing and may feel threatened. You mentioned very specifically this will be an evolution there and its going to be complimentary, not replacing it. It wont disrupt to the point of through the adoption of these techniques that most people will move to, its not going to disrupt a livelihood aside from helping them become better, so its going to become complementary, rather than desecrating. Yeah. I guess if we look the at vertical farming, i mean why doesnt any farmer here have their own vertical farm . Why cant they run their farm in a supply chain as well . I think youre going to see this change. Obviously theres a couple of early players like plenty and aero farms driving this today. I think theyre going to set the bar and show the way. Does that become something that other farmers can deploy themselves, you know, in the supply chain . I think it can be. With the local sourcing that Consumers Want today and knowing where that came from, how it was grown, certainly thats part of it. The other thing i mentioned in my presentation was, i love your advice and counsel on how usda from a regulatory perspective can be alined. We dont necessarily, we cannot lead the technological revolution there, but how can we make sure that regulations dont inhibit or hold it back in that way . Its a challenge here in usda in d. C. To make sure our Regulatory Environment the president has been very interested. In fact, i think the deRegulatory Environment hes created has been almost as much a part of the economic boom that were seeing here as tax policy. So people want to know, entrepreneurs want to know that youre not going to hold me back if i have a great invention. How do we do a better job of aligning usda regulatory issues with that . I know one of the things were dealing with right now is new breeding techniques. How do we do animals in that way. Yeah, look this is, its a very complicated and big challenge. I think regulation will slow down innovation, and it will slow down the flow and rate of what were trying to do. At the same time you need regulation. Like theres significant data out there, you know, on peoples businesses, you know, and, you know, farmers need to be sure about whats going to be done with their information in terms of privacy. I think that theres definitely a role here to make sure that theres regulation, but at the same time this data could make us much more productivity if its actually interpreted and analyzed accordingly. I think that balance is very important. I think one of the areas i would say, you know, moving on in terms of how we could drive some innovation is, why cant we set up super farms in a couple of key locations across the United States and start to lead the world and kind of build clusters of excellence, whether its in Silicon Valley around digital and automation, Research Triangle or various different locations . I think its important for us to identify these key technologies, whether its robotics automation, controlled environment, you know, on the biotechnology side, but set up areas of excellence where we can lead not just only research, but super farms where we can bring entrepreneurs from all over the world and put their technologies to place and demonstrate to us that this is going to reduce the costs, its going to increase productivity, and also we can lead the world here. I think theres an opportunity for us to kind of create super farms that can really demonstrate this and obviously with connectivity as a big issue and a major challenge for the industry. You know, its very hard to enable Technology Without connectivity. I think, you know, a few weeks ago my kids, we had a power outage in california with the fires, and my kids came to me, didnt realize the lights were off, didnt realize the power was off, but the only thing they realized was there was no wifi. [laughter] yeah. Thats a challenge. If you think how important that is, i think in terms of every rural environment, i think this is to me in terms of mission, this is the Biggest Mission that we have. If we want to enable and light up the farms and enable and take one hand from behind the back of the farmers we have to drive that, you know, connectivity and also maybe by having super farms where we can kind of showcase, you know, 5g in some of these areas and show what the best of innovation can do. I think these can be great areas where we can drive this forward. I think youve just given usda a good idea here to create , certainly if we can put 5g in our nfl stadiums we can put it in super farms in that way to do that. I know that, i did visit in north dakota and the governor , who had a career at microsoft, they were creating a smart Farm Environment there and doing many of the things youre talking about. I love the terminology super farm, and i would love for usda to be facilitating that, going to congress and saying, lets create some demonstration plots out here for the future because those ideas coming out of Silicon Valley need to be proven in the field in some places. Thats right. You know, as i say i just came back from australia, we were in melbourne, and the victorian government is driving hard in terms of connectivity in locations there and theyve created an initiative, you know, like this. They didnt call it a super farm, but the whole idea is to have kind of a farm of the future that, you know, that has that, i think if you look at canada today, you know, theyve kind of come out with these super clusters around next Generation Foods and protein, next generation in terms of data, next generation, you know, automation and robotics. I think we need to, were leading the world already, but i think we need to be careful we dont get complacent and i think having this kind of a focus in terms of having these clusters, aligned with challenges that are going out to the Industry Worldwide or out to entrepreneurs to say, solve this problem, increase productivity by 40 , reduce our footprint by 50 , and then breaking that out, putting the challenge out there to every entrepreneur, bringing them over here, and putting them on our super farms. And as these super farms demonstrate the future lets bring that right across the United States, the midwest and across the west coast. And the ecosystem we have in the United States is very fertile for that. Weve got obviously private Sector Research, public Sector Research and were talking about trying to align, we have entrepreneurial innovators and demonstration farms over that, but we also have an Extension Service that a Land Grant University thats very good at getting the best ideas and the most productive ideas out to a wide crosssection of people. Just like we were talking today, we know the things that can produce soil health over no till and cover crops and those things, but we dont have universal adoption yet there. Yeah. Thats what we need to get the best ideas of how soil health. I happen to believe soil health may be one of those Quantum Leaps with we see as more of the biology is going on in the soil itself from productivity. Weve gained a lot over genetics and we will continue to do genetics improvements, but i think soil health is also a huge component. Absolutely. Again some of the technology is already there. You know, theres two young girls from Stanford University set up a Company Called trace genomics and theyre fouryearsold and the company is growing and scaling and theyre focused on this area and, you know, theyre driving the whole area on soil health. How can you, how can a company like that scale and how can we get that adoption of their technology into the fields across the u. S. . Well, john, youve challenged us. We want the globe to thrive by feeding everyone and doing, while were doing right. I think your contribution there, were delighted that you have focused in the food and the agro food sector and supply chain there of helping us to accomplish some of these go bold goals we have. I look forward to continuing a relationship. We want to invite you to help us hold usda accountable and as you see things that could enable and facilitate the technological advances that will get there, i hope you will feel free to help us do better. Well, thank you very much, secretary. Its an honor to be here. I know in my, you know, last ten ive spent much more time in this industry and ive been humbled by the industry and ive been very passionate about this industry because its really investing in our future and, you know, when i look at our children, i look at our families, this is the industry thats going to make a difference to our world, to our health, and also to our families. Theres nothing more important than this industry, and thats why im really here and motivated to make it happen. Well, i think the producers in the audience today and across that hear this i think would be very proud to hear you say that youve been humbled by the challenges and the complexities of production agriculture. That makes somebody like you thats on the cutting edge of innovation, make us feel better out here. Its easy kind of manufacturing a smartphone. Its difficult, you know, producing food and bringing it to the most complex supply chains in the world. In fact, some people even think its easy farming. Its not. [laughter] thank you. Washington journal live every day with news and policy issues that impact you. This morning former u. S. Representative jason altmire. Bipartisan efforts to make government more representative. As part of museum week we featured the museum of africanamerican history and culture. And africanAmerican Cultures in world war i and how their experience served as a catalyst for the civil rights movement. Watch washington journal at 7 00 a. M. This morning. Join the discussion. The cspan networks, the secretaries of the army, navy, and air force on the state of their departments, defense strategy, and issues in the fiscal 2021 budget. Trump0 p. M. President holds a Campaign Rally in las vegas ahead of the nevada caucus. On cspan two we joined the political and humanitarian situation in syria. And countering chinas influence in the indo pacific region. Cspan, your unfiltered view of government. 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