USDA’s 96th Annual Outlook Forum

If you could please find your seat would
like to welcome everyone to USDA’s 96th annual outlook forum USDA’s oldest
annual meeting I’m Steven sanski Deputy Secretary of Agriculture and it’s great
to see everyone here this morning this year’s theme is the innovation
imperative shaping the future of Agriculture this is a fitting theme for
the Secretary to announce something that we’ve been working on at USDA called the
agriculture innovation agenda we’re excited to share more with you this
morning I’m joined in this room by many of you that are that are working to
shape the future of our agriculture economy it’s important that 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 and 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 Johansen will
provide an in-depth overview of the state of the farm economy there’s a lot
to take in in 2019 was certainly not a typical year and there were many factors
influencing the economy including extreme weather trade and policy changes
in importing and exporting countries to name just a few
following dr. Jays talk the secretary will outline some of the amazing
progress we’ve seen and should be talking about more in the agriculture
sector and as I mentioned he’ll also tee up what we’re calling on on this call to
continue the trend of success that we’ve seen to meet the future challenges
including in doing our part to make sure that we’re we’re growing enough food to
feed a population that is likely to grow to nine point seven 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 founder and CEO CEO of SVG ventures a
platform of corporations universities and investors focused on food and
agriculture industries secretary Purdue and dr. Hartnett will discuss the future
of Agriculture challenges facing the sector and emerging solutions that could
address them tomorrow secretary Purdue will be joined by his colleagues as
ministers from Argentina Canada and Mexico for a plenary session titled
feeding the world through innovation they will discuss cooperative approaches
to promoting agriculture innovation and global trade as foundations of global
food security a recurring theme that you’ll 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 participants in this year’s a Gregorian they’re here
participating in USDA’s 2020 future leaders in agriculture program their
attendance in this forum caps off a week-long trip here to Washington DC the
program selects 20 universities undergraduates and 10 graduate students
based on essays on agriculture careers and challenges these students major in
agriculture related studies including Business Economics communications
nutrition food science and veterinary studies finalists are selected from
land-grant universities Hispanic serving institutions and non-grant LAN non
land-grant colleges of Agriculture the future leaders in agriculture program 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 efforts that we have among USDA
the 1862 land-grant institutions the 1890 historically black colleges and
universities the 1994 tribal land grant 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 ten graduate students that we have in
attendance as part of that program the USDA’s Economic Research Service
partnered last year with the farm foundation to create a new agriculture
Scholars Program that takes these 10 graduate level students of Agriculture
through a year-long program of Ag related training the objective is to
inspire and train the next generation of agriculturalists interested in policy
commodity market analysis agriculture finance and other applied fields of
economics can we have all of our 2020 future leaders in agriculture program
attendees stand and let’s give them a round of applause 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 department’s outlook
for US commodity markets and trade in 2020 and discussed the u.s. farm income
situation dr. Johannson well thanks so much thanks everybody for joining in us
today thank you for those comments mr. Deputy Secretary and of course welcome
to the 96th annual agricultural outlook forum as the deputy just mentioned we
have a great program for you our theme this year as he just talked about the
innovation imperative of course that’s appropriate in many ways he just
enumerated some of them I’ll just highlight two that are gonna underline
some of the comments I make today first 2019 is a year filled with uncertainty
for agriculture in many ways and innovative responses were necessary by
farmers to get them through the year and second we know that innovation in
agriculture will continue to shape our future what can we expect for 2020 I
know you’re waiting with bated breath so let’s 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 and that’s going to help sales and prices second
crop production should rebound from next last year and we expect record crop meat
and dairy production third the economy continues to show signs of stress the AG
economy but there are other more hopeful signs for example low interest rates are
reducing borrowing costs and strengthening land values let’s start
with the global economy in January the IMF projected slower global economic
growth the downward revisions from the pink to the dark red line on the slide
there may not look like much but it equals a loss in buying potential of 1.5
trillion dollars over that period with almost all of that
revision due to declines and growth and emerging economies such as India central
banks from across the world have responded by collectively cutting
interest rates 71 times across 49 different countries still that being
said higher growth higher global growth in 2021 and 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 corona virus in China
which has been impacting much of Chinese China’s economy you can see here in
January that the Shanghai Composite Index fell by 10 percent in January with
the emergence of the corona virus but it’s since started to recover we’re
tracking this on many levels globally we’ve observed significant disruptions
and shipping and supply chains and we would expect less spending by Chinese
consumers particularly in the first quarter that may reduce their purchases
of higher value products such as meets private sector forecasts have lowered
their estimates of China’s first quarter GDP by as much as 2 percentage points
it’s far too early to tell what the final impacts will be but most of those
forecasting operations expect the second quarter third quarter
and fourth quarter and China to rebound any perceived risk or of uncertainty
often strengthens the US dollar and that’s 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 a moderation of
tensions between the US and China we saw we saw resolving uncertainty about
brexit and we did see some higher oil prices in the end of the second half of
2019 which supported both the Australian and the Canadian currencies we also saw
interest rate cuts as I mentioned earlier by some central banks such as in
Russia which helped support their currencies such as the ruble and
incidentally the coronavirus recently has led to an appreciating dollar that’s
reflected in these slides despite the mixed economic signals heading into 2020
there has been important progress and trade that I’m sure we’re going to talk
about a lot over the next two days and that’s going to improve access for us
agriculture in 2020 and beyond three main trade deals that we’ll hear about
today and tomorrow cover over half of US exports the u.s. MCA will lower trade
friction between our North American trading partners and is expected to grow
the u.s. export market to more than forty 1 billion dollars in 2020 the
japan-us agreement will also help lower tariffs on more than seven billion
dollars in u.s. AG exports but more importantly it will equalize market
access for sectors such as US beef and pork similar to those enjoyed right now
by the EU Australia New Zealand and Canada into Japan and their large seven
trillion dollar market and the phase one deal with China will boost sales to our
main agricultural customer however there remains much more work to do such as
gaining better access to the nearly 1.4 billion consumers in India and our
trading negotiators and administration and president are working on that as we
speak all right I’m going to put up a slide here and hopefully this works this
is the first time I’ve tried this but this shows some of what we’re expecting
and trade and excited to see so this is a timeline of different economies and
the size of the bubble reflects how much we’re trading with that or how much US
product they’re purchasing from us and their per capita GDP is along the x-axis
so a lot going on there what did we see we saw three decades ago Japan was our
largest market for US exports at about 8 billion there at that same time they
were our exports were concentrated mostly in the EU in Canada the u X
exports at that time to China were less than 1 billion dollars and exports to
India were only 240 million dollars at the time China had GDP per capita of
about $700 a person in India at $600 a person this change dramatic
NAFTA took effect you probably saw that in 1994 u.s. Ag exports to Canada and
Mexico grew 300% in 1995 WTO officially commenced boosting market access
globally and 2001 China entered the WTO and US exports to China expanded hitting
almost 26 billion dollars in 2014 US exports over the last past half decade
have declined under increased foreign competition and a 20-18 exports slowed
dramatically under the disputes with our major trading partners bringing us to
watch it one more time and then I’ll go to the next slide so I just talked about
all this look at we can see China and India starting together
boom China opens to the global marketplace starts become you know
growing dramatically both in per capita GDP as well as our exports in India yet
to take off but again highlighting the importance of getting into that market
in the future where are we today in 2020 us egg exports are forecast at a hundred
and thirty nine point five billion dollars that’s up four billion from last
year China were forecasting right now at 14 billion for fiscal 2020 up from 10
billion last year now that reflects public information
available right now and phase one but the trade outlook forecasts are based on
a fiscal year and this outlook also reflects uncertainty that I mentioned
earlier our top market in 2020 is currently expected to be Canada
forecasts at 21.5 billion and Mexico forecasts up to nineteen point eight
billion you and Japan slightly down for 20 fiscal 2020 again just to emphasize
the calendar year phase one commitments are not reflected in a fiscal year
calculation completely one question we get is where do we expect the largest
growth to be in import demand over the next ten years global demand for
agricultural commodities expect especially emerging markets are expected
to grow global exports the prospect for additional US exports over the next 10
years is strong growing at least to 183 point six billion dollars overall world
coarse-grain trade is projected to increase by 37 million tons up 17% with
big markets in Mexico Egypt in South America
global soybean trade is projected to increase by 36 million tons up 24
percent mostly in China global wheat trade is projected to increase by 30
million tons up 16 percent mainly in Africa in the Middle East and the world
meat trade is expected to grow by 9 million metric tons poultry up 28% beef
by 18 percent and pork by 23 percent alright let’s turn to the 2020 crop and
livestock sector I know many of you are excited to see these slides first let’s
recap though in 2019 what we saw and which drew a lot of attention and
critiques of USDA forecasts as we all know 2019 was a very wet year in much of
America spring planting delays led to slow maturing corn and soybean crops and
at harvest wet weather still hindered progress across wide areas of the Corn
Belt that led to a surge in demand for drying capacity and some natural gas
shortages and price spikes occurred in many areas in parts of North Dakota
Minnesota Wisconsin early heavy snowfall on top of wet ground ended field work
early before the harvest was complete leaving significant acreage for harvest
in the spring as you know today we’re coming out with our early estimates for
the 2020 year and this is what we had last year for corn in 2019 our estimates
are based at this time purely on supply and demand fundamentals and price
expectations and we do assume quote unquote normal weather of course we know
it’s fairly wet out there right now the first official estimates for the new
crop year in the Oise d are released released in May and that reflects the
planting intentions surveys that Nass will release at the end of March in June
last year we reduced our acreage and yields reflecting observed weather
conditions at the end of June Nass released its acreage report which was
used in the July Wasti given the high corn prices and strong price signals at
that time to plant corn it is not surprising that farmers said they would
plant more corn and that was reflected in the July estimates in August Nass
began begins to report monthly survey based day
acreage and yield estimates which are coupled with administrative data and
satellite information as you all know in August Nass surveys came in from
producers noting fewer acres planted than expected but higher yields than had
been forecast earlier overall the corn harvest was pegged at roughly thirteen
point nine billion bushels slightly above the July estimates but
significantly different from the average trade estimate from many probably of you
in the room by more than 600 million bushels what did we see many farmers
outside and outside analysts felt that the USDA estimates did not reflect the
poor planting conditions that were seen on the ground in many states what the
estimates did reflect was what farmers were saying on their surveys coupled
with satellite information as well as administrative data from FSA and RMA a
market correction happened in August with the December futures falling
quickly by almost 50 cents a bushel further frustrating farmers that were
dealing with difficult planting conditions one thing we heard this year
is why doesn’t USDA use satellite information to help them with their
estimates of course we’ve been using satellites for many years and we’ve been
getting better each year as those datas improve our ability to estimate crop
production you can see how improved satellite information and improved usage
of administrative data have helped USDA refine their estimates over time going
back to the 70s we haven’t seen a year when the coram crop forecast in August
was more than 7.5 percent off since 1995 and the deviation has been less than
five percent over the past five years again in the blue here is our estimates
in August relative to the final and the orange is the average trade estimate
relative to the final let’s look ahead now to 2020 big question out there is
where are we going to plant all those acres our eighth major row crops corn
soybeans wheat upland cotton sorghum rice barley and oats averaged nearly 257
million acres over the 2012-2014 period looking at the principal crop
pay courage for the NASS principal crops acreage was down in 2019 by almost 16
million acres which most of that coming from soybeans down 13 million relative
to 2018 so again looking across the united states we saw significant
planting prevent plant and unplanted acres in 2019 relative to 2018 so where
are we going to put those acres this year we would expect a good portion of
those to go to court and soybeans in 2020 let’s look at what the price
fundamentals are we look at global stocks relative to use at first to see
what we think about the upcoming demand for those commodities and we can see
strengthening in the balance sheet or the stocks to use for corn and soybeans
relative to eat and rice so we would expect larger better returns visa fees
those commodities for corn and soybeans similarly we expect growing global
demand for varied diets and increasing animal proteins to continue to stimulate
demand for feed grains and soybeans and here we see it’s not just the united
states that are improving their output but Brazil is optimizing their land as
well utilizing double cropping resulting in more soybean acres and a second crop
corn now that has overtaken in Brazil’s first season crop current record
production in Brazil is pegged at roughly 4 billion bushels of corn and
4.6 billion bushels of soybeans in addition planning decisions will be
affected by a number of other factors such as expectations about trade and
tariffs and prices compared with rising input costs the current futures prices
point to a large US corn crop the soybean to corn price ratio has dipped
to four year lows in addition we know that local demand and transportation
costs will drive regional plantings for example we see that soybean the corn
prices currently favors the planting of more soybeans in the Upper Midwest
compared to planting more corn in the Eastern Corn Belt as well as the
southeastern part of the United States under anticipation of return to normal
trade with some growth in those markets boosted by trade agreements we project
that soybean prices will rise honestly up a nickel to 880 a bushel
this coming year supported by lower stocks compared to last year’s record
level in contrast corn is expected to decline 25 cents to 3 dollars and 60
cents a bushel with larger corn acres and expected return to trend yields
wheat prices are expected up 35 cents to 4 dollars and 90 cents a bushel
reflecting low ending stocks cotton prices remain low however global
conditions and the return to more normal trading patterns with China remain a
significant uncertainty for the cotton market in the coming year cropland area
last year’s planting difficulties as I mentioned resulted in 13 million fewer
acres of soybeans compared to which is equivalent to roughly a 600 million
bushel carryout that reduction supports an increase in soybean acreage to
roughly 85 million acres up 12 percent corn area is expected to rise 4.3
million acres to 94 million following last year’s prevent plant supported by a
new crop prices that are relatively favorable to corn wheat and cotton acres
are down with more acres planted to rice let’s turn to meat and dairy production
2020 production of meat will set another record at one hundred and eight point
eight billion pounds beef production will increase about one percent pork
about four point five percent and broiler protect production up about four
percent the increase in production over the past ten years has been accompanied
by increasing shares of production exported with more than 25 percent of
our pork production expected to be exported in nearly 20 percent of dairy
being exported I’ll just note of course we’ve got record dairy production as
well in the red there at more than 220 billion pounds expected for 2020 I’m
gonna let you take a look at this slide real fast while I get it there’s a lot
going on here but this tries to encapsulate what’s going on with African
swine fever in one slide there’s a lot going on
I can even use a pointer on this one so what have we seen we’ve seen significant
declines of pork production China in particular China hog production in 2019
down 195 million head and we expect a reduction of another 80 million in 2020
Chinese pork prices have spiked to one hundred and fifty to two hundred percent
of what they were a year ago you can see in 2019 most exporting countries
particularly the EU increased their pork exports to China and China’s
dramatically increased their imports globally with purchases from the US up
150 percent from 2018 the phase 1 deal in place we would expect a larger
portion to come from the US in 2020 but let’s look at the loss in China
consumption and supplies it’s far larger than then all of global trade in pork
and we’ll take some time to resolve so again the drop in China consumption
significant 15 point 8 million metric tons total trade for 4 million metric
tons plus another 7 gets you only to 11 so we’ve got a significant hole there in
proteins that is going to be filled with other proteins such as beef poultry and
again higher exports of pork coming from the United States what a prices show
despite record levels of beef production steer prices are expected to close
unchanged for 2020 slightly up strong demand for pork domestically and
internationally is expected to support increased hog prices broiler prices are
expected to come under pressure from higher production levels going down
slightly but fairly unchanged and milk prices are expected to strengthen
slightly in 2020 as well let’s look a little bit closer at dairy you’ve heard
a lot about that and the news over the past year we know that US milk
production is expected to grow by 13 percent over the next 10 years but
prices milk prices are only expected to increase about 5 percent as with other
sectors growth and production has been through increased gains and animal
efficiency steady increases in milk per cow however
dairy remains a sector experiencing significant structural reform and the
number of licensed herds has been falling as production has been
increasing the recent USDA Nass census shows how the distribution of dairy
farming operations has been changing from one with many small dairy farms to
one with fewer but much larger operations now more than half of u.s.
dairy cows are being milked and operations with a thousand or more cows
five times higher than we saw 20 years ago and the reason for this is apparent
in this chart showing the cost of production for dairy farms across the
United States the chart shows that the majority of dairy operations have cost a
production that are greater than the old milk price but the majority of milk
production is occurring non operations with costs higher than the old milk
price based on this we would expect to see continued consolidation in the dairy
sector let’s turn now to the farm economy and farm policies we know that
US farmers as I mentioned faced a number of natural disasters in 2019 and USDA
responded with all the tools available to it making timely payments for lost
claims and crop insurance policies and utilizing FSA’s suite of disaster
assistance programs in addition to those tools USDA implemented the Wildfire and
hurricanes indemnity program plus using the funding provided by Congress wit
Plus provided payments in addition to crop insurance to producers affected by
natural disasters in 2018 and 19 stepping back of course this is
something that I typically show at the beginning of this presentation but we
look at sentiment to farmers over the past year relative to where we were in
February of last year we can see that by and large most of these indices that we
track whether that’s the corn price consumer sentiment from the from
Michigan the AG barometer from the CME Purdue survey the rural Mainstreet
survey that’s done by Creighton the Dow Jones Industrial Average or the housing
market are all up relative to this time line
year but certainly farmer sentiment was volatile over this period in May farm
sentiment fell due to increasing trade tensions May was the lowest overall egg
Brom Perdue a Gromit er index since October of 2016 in June the barometer
rose with the announcement of the new MFP program for 2019 in July the core
price of corn rose with the knowledge of widespread prevent plant and so did the
AG barometer however in August was we just talked about with more corn acres
and expected in weaker commodity prices sentiment fell in December with
prospects of improved trade relations farmer sentiment about the future
continued to improve and in January there was a large boost in optimism as
the phase 1 deal with China was signed by the US this is a new record before
this index for the AG barometer index indicating that farmers are very
optimistic about the next six months let’s turn to farm household income more
than 98 percent of farms in America are family farms so farm household income is
a good benchmark to look at when thinking about the health of the family
farm we can see that overall family farm household income stretches from negative
8 this is a cat farm household income stretches from negative 8,000 to more
than 300,000 with the median roughly at 72 thousand dollars that’s typically
found to be above the median u.s. household income however this chart
illustrates there are still roughly 50% of farms out there that do not earn
positive returns from farming and we also know that more than 50% of US farms
have primary principal operators that are either retired or list another job
as a primary occupation a growing US economy helps farm household income but
low commodity prices in recent years have weighed on farm income yet farm
income we see has rebounded slightly since 2016 in part particularly last
year that was due to high levels of indemnities and government payments in
2020 we expect net farm income to rise slightly from 93
point six to ninety six point seven billion dollars with higher cash
receipts but we also expect lower farm program payments and lower indemnities
on normal weather even though input costs will be rising and we’ll talk
about that at the end here usually when we think of disaster payments we think
normally are talking about crop insurance and that’s what we’re showing
here but in this case crop insurance still covers the bulk of most losses due
to weather but we saw in particular an increase in prevent plant last year of
more than four billion dollars whip and whip plus along with the top up for that
prevent plant still show up in the twenty seventeen and eighteen and
nineteen numbers as the pink sitting on top of those years so whip has been
important but again this portrays the importance of the crop insurance program
to providing that basic safety net for farm producers to weather risk
similarly the fourteen point five billion dollars and MFP payments the
2019 program will be paid out in 2019 and 2020 you can see here how those
program payments were targeted to the state’s most affected by the retaliatory
tariffs with MFP exceeding five hundred million dollars in eight states running
from Texas to North Dakota and over to Indiana the picture of the states there
on the right showing trade that’s affected by tariffs and the picture on
the left where MFP program payments are expected for this year farm debt is
forecast at four hundred twenty five billion dollars with two hundred sixty
five in real estate debt and one hundred and sixty 1 billion in non real estate
debt overall the farm sector debt is near its peak from the early 1980s
equity is forecast to decrease very slightly 0.7 percent in 2020 while debt
is anticipated to increase slightly by 0.5 percent that puts a debt to asset
ratio for the farm sector at thirteen point six that’s still low but certainly
it’s the highest we’ve seen since 2003 on the other hand both interest rates
and inflation are expected to remain low 20 which has kept debt financing
manageable and which has also helped maintain equity through higher farmland
values those overall values can mask areas of greater vulnerability the
percent of farms with very highly leveraged balance sheets that’s debt to
asset ratio is above 71% has been slowly rising for several sectors including
corn soybeans and hogs but overall the number of crop farms in highly are very
highly that’s above 0.4 debt to asset ratio is about 1 in 12 and that’s remain
constant over time and the number of livestock and dairy farms in highly are
very highly leveraged financial situations is sitting at about 1 in 16
right now again fairly constant over time we’ve seen a lot about bankruptcies
and I put some slides together on that the overall bankruptcy rate has remained
low below three farms per 10,000 over the past nine years and while has
increased year-over-year by 24 percent the rate is still low historically what
is helping with that again both interest rates and inflation remain low which
helps maintain farmland values if we look at states there are some that show
higher than average bankruptcy rates such as Georgia Nebraska and North
Dakota in 2019 but others such as Maine Michigan and Florida or bankruptcy rates
have been lower than the average by and large most states had fewer than two
bankruptcies per 10,000 farms in line with the historic average again the red
line here being on average if you’re below the red line that would mean that
in 2019 you had higher bankruptcies the state had higher bankruptcies than the
ten year average if you’re above the red line lower bankruptcies than the ten
year average overall going into 2020 the basic outlook for many farms look better
than it did last year we have expectations of better trade
expectations of better weather and continued low interest rates
nevertheless the farm balance sheet remains tight for farms without
significant land equity total costs including land rent generally exceeded
exceed expected revenues in many regions with cash flow difficult for
corn and soy or for soybeans and wheat in particular of course this balance
sheet does not include government payments so arc/plc is not included in
here the 2019 tranche three payments for MFP are not included in here but this
just underlines that in many places farmers that are renting land are going
to have a difficult time showing cash flow if you own your own land it’s a
different story of course because that’s the highest input cost that’s here so
farmers that do have significant land equity are in a better shape going into
2020 let me put some summary slides together here first of all current
conditions as I pointed out point towards that improved outlook in 2020
trade deals are expected to improve our access and trading opportunities abroad
and return to more normal trade with our major trading partners with lower
friction should lower cost for producers and improve returns the economic
fundamentals are stable interest rates remain low and that will keep borrowing
costs down equity remains high relative to debt and we have stable land values
weather conditions are likely to be better of course that’s hard to forecast
going into the new year we do know there’s a lot of rain out there a lot of
wetness a lot of precipitation that we’ve seen over the last couple weeks
and months but again we would expect that conditions will be better than the
historic conditions we saw last year and that should improve outlook for corn and
soybean crops as well as other commodities we do see corn and soybean
air occurs likely to be up from 2019 based on price signals that we’re seeing
right now livestock sector is poised for continued growth with record production
in beef pork and poultry growing export access from meat exports reflecting the
trade one phase one deal of China the US Japan agreement and continued global
income growth in 2020 and 2021 the international competition in crop and
livestock production is intense particularly with our
four countries to the south in Brazil we continue to see corn and soybean
expansion in production u.s. agricultural productivity remains
remarkably strong that’s something we’re going to hear about over the next couple
days with continued investment in technology and innovation key to
maintaining markets profitability and feeding a global population so what are
our expectations for the next 10 years production of crops in the US should
reach 612 million metric tons over the next 10 years these are the main
commodities we’re talking about today the main eight that’s up about 10
percent from the from this time from current and that’s on the same amount or
a slightly less cropland again increase in productivity is something we’re going
to continue to hear about but it remains one of the only ways to ensure decent
livelihoods for US farmers and farm workers it will help us meet global food
security challenges and manage scarce natural resources we know that markets
are competitive which dries producers to be efficient and to innovate US farmers
have shown time and time again their resilience and ability to compete
globally and we know that more people will have improved access to food in the
coming 10 years as food prices fall and economic growth boosts purchasing power
yet much work remains the number of people who are food insecure in 2018 had
risen to 820 million roughly 10 percent of the global population u.s. producers
and US innovators have a vital role to play in responding to that demand we can
see that the number of undernourished is moving in the wrong direction here if we
are to meet our UN target of zero hunger by 2030 as I mentioned US producers and
innovators will have a vital role to play in responding to the demand in a
sustainable way two challenges facing agriculture such as limited land water
and natural disasters now it is my pleasure to introduce
usda’s 31st secretary of agriculture sonny perdue he’ll be speaking today
about USDA’s agricultural innovation agenda and we’ll sit down with his guest
John Hartnett to talk about that innovation imperative please welcome
Secretary Purdue good morning welcome everyone looks like we got a
full house here today and we are the light to have year two the 96th annual agricultural outlook summit it looks
like some of you may have raise your hand if you hear the first one I think
looking out there some of you may have made it the first one so we’re happy to
have you here today and this our theme this year is the innovation imperative
shaping the future of Agriculture so we’re delighted to have you here and we
the story today we’re going to talk about I don’t think we’ve told the story
of agriculture very well and what we’re going to be doing over this next year is
sharing where we’ve been as far as a footprint for where we want to go and
that’s going to include certainly an agricultural success story but an agenda
now for all you honor students you don’t need to read that all at one time I’m
going to go one by one okay so the valedictorians out there trying to take
notes we’re going to we’ll have more of that going forward but really the
success story of American agriculture what we haven’t done farmers are pretty
pretty good about producing they’re just not good about telling what they’ve done
and most of them are kind of quiet set behind the farm gate and really don’t
talk a lot about what’s what’s happened but this is the fact the story of the
last 90 years of US agriculture a four hundred percent increase in food and
fiber production and increased productivity with fewer resources and
that’s the that’s what’s the story is here they’ve what does that mean in that
way it means that we’ve opened export opportunities and in fact if we look at
trade over the last couple of years we’ve offered export necessities and and
because we’re producing more than we can consume here we’re contributing to the
to the trade balance here in the United States but more importantly we’ve kept
food prices low reliable for our American farm families American family
consumer families all over this country in an amazing way so that’s what’s
making Americans spend less on their paycheck then almost anywhere are really
anywhere in the world and we’ve got some facts to back that up
so here’s what here’s what the story of American agriculture has been it’s
producing more with fewer inputs and we see just over the past 70 years u.s.
outputs almost tripled here three times up there while inputs have only
increased by ten two percent annually so you can see here the line of total
agricultural output and what our economists say dr. Johannson would tell
us the total factor factor productivity for agriculture has been wonderful in
that way of the measuring the inputs versus the outputs versus the inputs
which you see down here with the end inputs there so it’s been a great story
and the measure is an indicator of how efficient agricultural sectors have been
and become over that past 70 years and it’s a great story to tell we really
haven’t done that but how have we gotten there and this is the key innovation is
me that’s possible we know that farmers are great innovators they’re great
entrepreneurs they’re great ingenuity and many of the OEM equipment we see
from the majors today started in a farm shed somewhere you know that farmers
were looking for a better way to do whatever they needed to do they design
things they welded it they built it and they’ve innovated their way to success
and that’s what has made this possible farmers aren’t always the biggest
advocates for their own successes they tend to stay behind the farm gate and go
to the farm shed and and do what they need to do in order to become better
about what they’re doing so but it’s important of us to illustrate the truth
about American agriculture and it’s it’s really important as we go go forward in
doing that so we we understand that the united states model of private sector
innovation and our science-based regulatory approach encourages farmers
to adapt the latest technology is there and that’s what we want to do you see
the productivity increases here from technological advances there we see
all the way back to the 1929 the rubber tyred tractors here and all the various
types of things irrigation and robotic milking and no-till and satellites for
precision agriculture really biotech issues about tolerant research all those
kind of things innovation has has driven technological
innovations have helped to rep that record place of 400% including
agricultural productivity over these years so that’s why we want to continue
to do that we’ve got to focus more on aligning those kind of things as we go
forward in that way so embracing innovative technologies allows farmers
to become more efficient while ultimately improving their bottom lines
keeping costs low and productivity high so even in the dairy sector which has
been under quite a bit of stress you can see their productivity gains over the
last several years ninety years ago we had this many cows and now we have 60%
less cal fewer cows with guess what twice as much milk and that’s one of the
reasons dairy there’s so much sector because they’ve been so productive we’ve
over produced really to keeping these costs low for our consumers while the
the livelihood of dairies has been under stress so of an interesting thing over
here at the same time we hear a lot about methane emissions from cattle and
dairy cattle methane emissions per gallon of milk have dropped over 50% as
we’ve gone forward there we see also we know about precision AG the
digitalization of agriculture and adoption of precision agricultural
technologies is enabling farmers to again to increase improved productivity
I remember when I went to the Farm Progress Show in 2017 I saw the the sub
inch technology they’re ripping that soil in the fall
placing about half the nutrients there that were typically done
and then the spring coming back and placing that seed in that very same sub
inch technology with a 20 bushel per acre increase that’s quantum type of
productivity increases that we’re seeing in agriculture that’s driving the end of
the innovation that’s driving these kind of technological advances here
data-driven decision making this digitization I was telling John earlier
this morning that well the best farmers have used this great a aisle on top of
their shoulders for many years intuitively making the best decisions
the most successful farmers have been the best about that but when we’re
digitizing that we’re going several decimal places to the right where they
can make even better decisions and even the ones that had not been as successful
can look at that data and make better digitized decisions going forward for
American agriculture what does that mean less inputs better utilization of water
using sensor technology optic technology for the future and again innovation will
continue to drive with these self-steering vehicles that you see
almost on 60% of our arable acres today regardless of what kind of crop you’re
growing pretty amazing I used to take pride in the kind of straight row but I
can’t compete with the GPS guidance today and probably many of you farmers
out there can’t either when you took a lot of pride in that but we’re going to
containing people of the access to reliable affordable connectivity in
rural America what does it depend on there’s no rural broadband not only in
the farmsteads but also in the fields for this corrected kind of precision
agriculture to really take place we’re going to have to have that I think it’s
the one of the most transformative things we can do from an infrastructure
perspective that really matters in American agriculture as we go forward so
we need to continue doing that not only we’ve done a great job productivity wise
but farmers are doing a much better job from a conservation perspective that’s
because they live on the land and they’re smart enough to know they don’t
want to poison that land for future generations any farmer you talk to their
goal is to pass that land along to the next generation I remember very clearly
my father they’re telling me son our
responsibility whether we own it or rent it is to leave it better than we found
it and that’s what farmers are doing today as we see I think again this is
important since 1980 farmland has decreased over 49 million acres while
forest land has increased over 3 million acres we know that what that contributes
to the greenhouse gas issues in that way the other thing here farmers are doing a
much better job because they realize it helps their productivity rather than
having topsoil eroded they’re doing a great job here with 45 percent decline
in soil erosion from 82 to 2012 including water and wind erosion
declined by 45 percent that’s real conservation efforts that I think with
modern technology we can even do better knowing what no-till and what cover
crops and conservation tillage now used widely on many major crops but it’s
still not universally adopted what we hope to do is to until the data and the
facts of where people farmers will adopt these kind of technologies and make a
difference in that way so we’ve the good news is it’s it’s essentially what the
story of American agriculture is is doing much much more with much much less
and that’s what what we want to talk about as we go forward we know obviously
with all the successes that we have that there challenges ahead they’re always
going to be challenges you read about them in the press you read about them in
from consumers and others about the challenges going forward and the
challenges of the world population most people tell you that the world
population is expected to be about nine point seven to ten billion people by
2050 that’s a lot of hungry mouths out there to feed you may know that our
motto at USDA since we began is to do right and feed everyone that’s a
challenge and there are challenges ahead how are we going to feed everyone while
doing right and that’s the best of sustainability goals that we’ll talk
about here in a few minutes the challenges of feeding everyone almost 10
billion people while doing right and by the environment and our social
goals as we go forward so we today we want to announce a new AG innovation
agenda going forward and it’s because that’s what’s going to drive the
successes the AG in agricultural innovation agenda and the real question
is how we’re going to do it and it’s a department-wide effort to better align
USDA resources programs and research to provide all farmers with the tools they
need to be successful into position American agriculture as a leader in the
global effort we recognize that our role at USDA is to support farmers of all
sizes we see some very innovative smallholder farms creating different
things I was in Michigan a few weeks ago and this young man that was 32 years old
that had left a high-tech well-paying job was operating on three acres and
guess what he was growing dahlias for the for the wedding industry of a flower
shipping all over the world in that way so we’ve got a lot of a lot of
innovation a lot of creativity out there so we’ve challenged ourselves to set
goals and to prioritize innovation and to hold ourselves accountable USDA goal
is to stimulate the innovation of American agriculture can achieve achieve
that shared goal of increasing doing more with less increasing US
agricultural production by 40 percent by while we reduce our contribution to the
footprint about 1/2 in 2050 and we think that’s attainable it’s a stretch goal it
should be but we think we can get there so here’s what we’re going to do
stimulate innovation so that American agriculture can work toward the shared
goal of increasing agricultural production by 40% while cutting the
environmental footprint by half in u.s. agriculture by 2050 it’s going to take
all of us to do that it’s going to take alignment to do that between the public
sector and the private sector but that’s how we define doing right and feeding
everyone as we go forward so how will we get there how will we get
there we’re going to get there strategically by working together with a
innovative creative private sector from the farmer on the ground to our great
research public and private entities here we’re going to do research online
programs measure metrics and data and we’re going to have a school board so
that’s what we want to do in four ways going forward research our plans are to
develop a u.s. AG innovation strategy that aligns and synchronizes public and
private sector research synergizes that communicates with one another on what
we’re doing where we need to go what are the questions that we need to answer as
far as where we can and help to achieve these goals through public and private
research going forward we’ve got so many things differently a genome design
digitation digitalization automation prescriptive
and of intervention and systems based on farm manager there are many many kind of
things it’s it’s amazing out there I get a chance to travel really all over the
country and all over the world and look at what so what’s happening out here
simple things not simple but interesting things like light spectrum technology
regarding their influence on plants and the kind of opportunities that are that
we’ve never imagined before so research is part of that key certainly we want to
align our programs as our customer facing opportunities with both FSA
dealing with farmers NRCS dealing with our our producers out here in these two
farmer groups we want to align the work of that research and deliver it through
cooperation with the Extension Service and communication tactics across the
globe of aligning the work of our customer faces agencies so we can
integrate those innovative technologies and practices into our programs as you
will know many times government regulations lag technology they lag what
is really happening out there in the we want to be ahead of that we want to
be certainly shoulder to shoulder a line from a regulatory perspective
acknowledging the changes that are taking place so we can lead really that
way rather than hinder many times the private sectors endured by the
technology that are available because of outdated regulatory structures and our
goal or to align those and move out with the industry as it moves out through
innovation and improve the coordination here between our research and our
programs so we can fast-track the implementation of that cutting-edge
technology into the hands of our producers everywhere we want to go so
that’s important as well then you know we’re going to measure we we have to
measure metrics and data are important and USDA is is in a great place to to do
that and we need to make sure that we do it in a in a way that preserves privacy
we know that farmers are very private about their individual data the same way
would be about our tax returns we need to guard this data but the USDA’s to
help the private sector in accumulating the data but also making sure that we we
preserve that data and use it for the right way as we go forward in moving
moving out creating a review of productivity conservation data and
analyzing that production to make the best decisions going forward if you
don’t measure and have the data and we’ve got a lot of a lot of very clear
priorities they’re going to come from the big data you hear a lot about big
data but in agriculture we’ve got the USDA has a lot of data sets we’re trying
to make those more publicly visible through graphic technologies through our
dashboards so everyone can have access to that to make better decisions as they
go forward and then I’m from the old school of Vince Lombardi if you not
don’t have a school board if you don’t keep score you just practicing
we cannot afford just to practice in this going forward if you’re going to do
right and feed everyone you better keep a score in that area so we’re looking
pretty good here by 20 the USDA 99 and hunger zero so that’s
what we want to that’s where we want to be in 2050 and we want to smack them we
want to food waste food lost in food wastes you know this you know the
statistics about that just think about if we could reduce food loss in food
waste all the way from the field of what we leave there to the consumers plates
what we’re leaving there it’s amazing we are we’re so blessed in this country to
have an ample supply of food we’ve just taken it for granted and frankly folks
we’re just wasteful about it we cannot afford to do that if we’re going to have
the moral imperative of doing right and feeding everyone across this world we’ve
got to make this part of the discussion and we already developing champions to
deal with us in the various sectors of convention areas and reefs or resorts
and other places and we’re going to bring our retailers into this and make
this a goal for all of us certainly we want to do more with less we believe
that agriculture can be part of the solution sequestering carbon rather than
a mitting carbon through the techniques that we know that work and NRCS already
has plans and goals and demonstrations of of carbon sequestration the good news
about this is while we sequester carbon in our pelvis you improve soil health
which improves productivity so farmers win by doing right and they win by
sequestering carbon using the farming techniques that help to keep that carbon
in the soil improving the productivity of those soils as well certainly from a
water quality perspective we know in a lot of places we’ve allowed nutrients to
escape our fields we’re doing a better job there but we can do even better and
our goal is to reduce that that nutrient runoff off of our fields and farms by
30% by 2050 in that way and then again we think farming can be a real
contributor to our war air quality through renewable energy and we’ve seen
that already through our ethanol and biofuels industry but we think we can do
more in that way by creating a better in environment for renewable fuels
hopefully really moving forward with goals of 15% of our transportation fuel
moving to that so these are these are all important goals but we’re going to
have a school board that keeps track of these we’re not gonna wait till the
buzzer sounds a zero zero because you know that it’s progressive and we’re
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 that we’re serious
about this and serious about making these goals by collecting more timely
information that’s useful to our customers I think we can ensure that
we’re 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 at their
and it’s exciting when you win you celebrate when you win right and it’s a
it’s really important to win that’s what we want to do as we go forward in
winning for the world and doing right and feeding everyone as we go forward so
you know the challenges are meeting the food fiber fuel feed and environmental
demands of the future is going to require some challenge it’s going to
require all the things that we talked about innovation is the key aligning the
public and private sector is we go forward and the real question is will
you join us will you commit yourself out there in your various sector and your
sphere of influence to do the right thing of us agricultural innovation
agenda and this is our mission should you choose to accept it will you accept now I would like to invite to the state
someone who has accepted that mission and it is John Hartnett who is a quite
an innovator and investor here and is going to talk we’re gonna have a chat a
fireside chat here about the kind of innovation he’s a futurist in so many
ways and he has done a lot of things and I want everybody John join me up at the
States so we can have a conversation about the innovation imperative shaping
the future of Agriculture as I indicated John has accepted that
challenge that mission impossible of doing more with less and John I feel I
should have come out at a sealing unit on a rope down here you missed the Rope
we weren’t quite secure sir sure but secured we didn’t want you falling so
but nonetheless you’re an innovative guy frankly I uh I read your vaio and it’s
pretty amazing what what you’ve been involved in I told John earlier I don’t
know if you remember the Palm Pilot but John was one of the early innovators in
that to that area of the palm pilot and handspring and he was just delighted to
know that I was a Palm Pilot user as we went forward but he’s leveraged those
kind of technological skills and become interested in the food sectors well
knowing how important it is so 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 you’re the founder and CEO of SVG ventures an investment in technology
firm and you founded thrive which I had the opportunity to visit with you last
year and in California a leading AG innovation food innovation ecosystem
comprised at the top food and technology systems using that digitization that we
talked about for for doing more with less and very innovative kind of ways so
I know that’s kind of your bow but what do you really do John well I’ve been in
Silicon Valley for 22 years and you might notice I don’t have a Silicon
Valley accent or a Californian accent I’m actually originally from ireland and
and I want to get my agriculture credentials out early here because I
don’t really accused of being a tech city slicker here
I did get eight and nine and ten years of age I drove my first tractor I bailed
hay in County Clare in Ireland and I worked on a dairy when I was about 14 or
15 so my early years were in agriculture that’s where I got my big values but in
Silicon Valley you know look I had a an opportunity to be there for the
basically revolution of the smartphone I think everybody in the room here today
has a smartphone under half in her hand it’s changed their lives
but you know in the 90s that didn’t exist and we had to kind of project
forward to kind of say okay will this how will this happen and we looked at
some of the key trends in terms of connectivity on how that was going to
project forward driving costs down and kind of getting a size that computing to
fit in your palm and that was how they called the company so we invented the
smart phone and created about a five billion dollar business you know you
know you’re from that over about nine years so that’s kind of my a big part of
my background and about ten years ago I’d set up SVG ventures and we set up an
accelerator to be able to accelerate companies you know so haven’t been a CEO
haven’t been a CEO who set up companies you know companies don’t happen easily
you know it’s hard work hiring a great team building manufacturing operations
distribution so we took the approach to build an accelerator and bring key
mentors around those comfort those companies to be able to help them you
know try forward birthing and getting them lean there’s a challenge yes so I
think that you know that’s kind of my early early days and you know 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 fresh food category and speciality crops and
even though Silicon Valley in Salinas Valley you came here you know last year
and it was phenomenal for you to come down and walk the fields and meet with
Taylor farms and also meet with the technology companies in Silicon Valley
but even though we were an hour apart the world of agriculture and technology
we weren’t communicating as best we should and really trying to kind of
align that was a big part of why we started to do this well that’s really
leads into my next question you you kind of heard the outline of the goals today
of doing more with using innovation and technology to get
there talk to me you talk to us a little bit about how that aligns with what
you’ve already seen in the private sector and aligning with the public
sector for these audacious goals of feeding 10 billion people by 2050 yeah
well first of all my secretary I mean these goals I think they’re bold they’re
ambitious but it’s something that we need you know this is you know 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
and 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 they can disrupt industries and if you look at some of
the sequence of events over the course of the last 20 years whether it’s either
to do with FinTech or entertainment or how you use information you know this
has all come from individuals and entrepreneurs that have actually
actually done that but the world of agriculture is not straightforward it’s
a it’s a complex industry it’s a complex supply chain and 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 they’re going to solve those problems and use the technology
and innovation to solve these all these problems this was something that we did
a thrive you know in California we brought growers up from Silicon Valley
and are from from Salinas Valley up to Silicon Valley and sat down and talked
to the innovators about the problems that are have you know around labor food
safety water quality you know water scarcity etc so I think the key thing is
to enable innovation and to unleash innovation you’ve got it directed and
focus it on the problems that you’re most feeling the pain and I think that
will help drive a lot of the the innovation going forward and I think
that’s a big change of what we USDA recognize is it we’ve got a we’ve got to
ask the right questions to solve the biggest channel
of agriculture now what I’d 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 out here
what are the what are the best producers asking that needs to be solved next and
helping to align the research between both the public and the private sector
what role do you see USDA playing in that yeah I mean I think it’s obviously
a very critical role in terms of there’s a lot of innovation out there I think
over the last you know five 10 years you know farmers are seeing more sensors
more applications more data more solutions and I think there’s just
somewhat confusion out there in terms of being able to understand what’s the best
technology I should be using to drive yield to solve some of the challenges
there so I think guidance and education and and putting a road map out there for
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
three and a half thousand startups um over 90 countries around the world you
might want to take a little time and explain what thrive is and how you’re
the competitive aspect of thrive almost like a an agricultural food particular
production shark tank any other things yeah yeah so we we set up thrive really
to as an accelerator to accelerate innovation to solve the problems of the
of the agriculture sector we also work with major growth stage startups that
are you know like companies like plenty and arrow farms who are really kind of
scaling under a controllable environment agriculture sector and working with
these entrepreneurs on one side and then at the same side we’re working with
farmers so we’re working with you know Western growers who were over two and a
half thousand largest farmers in the west coast United States we’re working
with the likes of land of lakes across the Midwest really to understand the
challenges of the far and then at the same time you know we’re
working with probably about three and a half thousand startups and entrepreneurs
that are solving these problems so we’re kind of sitting in the middle and we’ve
driven programs to address the problems with the farmers and also bring the
community together so you know what seven years ago we founded the AG tech
summit with Forbes media and you know you came to visit that last year the
whole idea about that was to thrive you know 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 it’s a combination of the the foundation of what we’re doing is
the ecosystem and bringing that together and then putting programs in place
whether it’s either the programs around accelerating technology identifying the
problems of the farmer and investing behind those as well but we’ve worked
very closely and carefully with the with the industry to identify these these
challenges what sounds like you and sgv ventures and thrive are really already
doing what I’ve challenged all of us today to do is to align the public in
the private sector you’ve gone to farmers you’ve gone to taking the match
with investors when you match with technology and innovators entrepreneurs
of finding solutions that way so that’s what I hope to really add USDA as a
public sector partner of facilitating more that what we have specific
recommendations of how we can engage and your as you know you’re not the only one
there’s a lot of interest in Silicon Valley in the food sector now a lot of
investment and a lot of interest and it’s almost like after the technology
revolution they’ve 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
agri-food sector in the full supply chain is an you know eight trillion
dollar industry when you look at some of those graphs that you talk about in
terms of you know a growing population growing to ten billion people but also a
change consumer you know 50% of the current you
know population is Gen Z our Millennials who are changing the way they’re they’re
consuming and eating food and at the same time you got the challenges wrong
water scarcity and all the challenges around labor etc so that gap you know
it’s hard to keep doing what you’re doing you have to innovate and I think
that’s where we’ve kind of focuses on that 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 with the problems how we did that was we put a
challenge out to entrepreneurs so instead of a generic challenge and
saying hey let’s increase productivity by 50% we’re 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 you know digitization
and data is going to make those impacts so 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 it was a group like this and the the Sharks on
the stage where the farmers ask the tough questions in terms of how much is
just going to cost me how is it going to improve my yield so it’s really kind of
putting the entrepreneur and the and a farmer together and addressing those you
know those challenges and those kind of programs like the challenges I think are
can be can be very very impactful so I think we need to go out to the industry
with these challenges that you’ve set the bar and go out not just the industry
in the United States but worldwide there are countries around the world here like
Israel you visited Netherlands you know earlier this year I just came back from
Australia yesterday you know you look at countries you know obviously Canada
Brazil they have all the same challenges they are innovating as well how can we
collaborate with those with those countries as well and and maybe get some
of the best of the best from some of these other countries to make us you
know more competitive of what we’re doing so I think there’s a combination
of the global aspect aligning the problems and focusing on these and I
love you’ve done here I mean having a
scorecard having it right up there transparent with regard to this is the
this is the bar we’re going for we’re gonna hold a team accountable for this
these are this is the roadmap and then we’re gonna measure this year by year
and see how we’re performing you know I don’t play American football but I play
soccer and rugby and you know you can be on the field but if you don’t score
goals you’re not winning and we’ve got to score those goals so I think having
that kind of a transparent view I think it’s going to be very very important as
we move forward here what you describe this for is segmenting the focus of a
research I didn’t have time to get into it this morning but that’s exactly what
we want to do with our USDA Agricultural Research Service is really to identify
the real challenges and problems where the barriers what are the what are the
limitations here and deal with those things in various sectors and I know dr.
Hutchins will be talking more to our industry as a whole about that too to do
that as we go forward so we look forward that’s a great strategy and I hope you
don’t mind us copying that into that role I know probably what’s on the mind
and in my mind and a man of many people out there we want you to give us a peek
into the future you you have a front row seat at some of these types of
industries that are that are burgeoning out here and just developing where
they’re just sprouting out of the ground or whether they’re growing good then
tell us what you see what’s what is what’s the future of some of the
exciting things that you think is going to help us meet some of these goals yeah
I think if you you know I look at in a couple of ways obviously we’re looking
at entrepreneurs and seeing the technology that they’ll have venture
capital is investing into the future and where is venture capital going and
placing the bets for the future in terms of technology so when we did the
analysis of where all these dollars are going in terms of venture capital
obviously Biosciences is going to continue to drive the way in terms of
you know driving driving driving doing more with less but I think precision
agriculture I think is going to step up in a really big way I think investment
in controlled environment agriculture there’s a billion dollars already gone
into this as Academy from the private sector so companies like plenty and
arrow farms for example they raised six hundred million dollars you
know they’re no longer a little startups these companies are scaling you know
they’re growing leafy greens they’re testing out berries today and I see this
as being a really interesting supplement to the challenge that we have I don’t
see it I don’t see controlled environment and vertical farms as a
competitive force I do see it supplementing what we’re doing but I see
that as a kind of a key key path going forward i altered see that in terms of
the supply chain itself you know putting farms in the distribution center or
vertical farms I think is is definitely going to be taking place in the next few
years robotics automation has played a major
role in what we’re doing today I think investment into this space again
has not has the same at the same level as they should be I think this is an
important area where we can drive you know automated vehicles that are there’s
nobody on the vehicle and that they’re actually driving and doing the weeding
and the seeding and and and driving solutions there and I think that’s what
you’re going to start seeing there’s companies I think you met in in Silicon
Valley commonly called farm wise and blue river technologies these are
somebody technologies already exists and I think they’re about yes I didn’t
realize that this was one of the companies that you had helped to
accelerate there but we were in the Salinas Valley and these two guys showed
me this machine whereas you know they’ll put many I believe it was cabbage
they’re many seeds in the row and then you had labor come through there and
thin out the most unproductive and a space there to to leave hearty plants
there at a regular space well this machine autonomously went on the road
it had optics there that would choose the most healthy-looking seedling that
had come up there inject some nutrients into that and unfortunately for those
weaklings it put them out of their misery and so that was what I saw
autonomously saving I think about a crew of 25 laborers in doing it like the five
or ten times faster yeah so that was a great
example of us all right there yeah what innovation sensor technology optic
technology can do autonomously driven that was pretty amazing I mean one of
the other things is you know Driscoll Barry’s as you probably know are driving
robotics into harvest automation picking strawberries you know it’s going to be
pretty amazing as you kind of see that kind of scale today I think the other
one is data I mean data is is one of the issues that
is out there you know data without AI and analytics is useless at the same
time it’s a challenge in terms of the trust and sharing that information so I
think this is going to play a key role in terms of the future you know
secretary I would say one thing that you know when we were in the smartphone
industry you know when Apple announced they were coming into the iPhone it was
2007 but the technology was around for 10 years beforehand when the internet
started the technology was around for 20 years so I don’t think it’s something
that’s going to be invented in the next couple of years that’s gonna be the big
breakthrough I think it’s gonna be adoption of the technology and I think
again this is where the us day can help farmers to adopt some of this technology
I also feel like some of the big players that are sitting on the sidelines at
today Google and Amazon and Microsoft they are starting to embrace this this
space I think once they come in I think it’ll really kind of put that inflection
point you know in there in terms of this productivity and entertaining at a
product productivity goal right you talked about something I want to go back
to for a second because traditional agriculturalists traditional producers
sometimes hear this gee-whiz futuristic kind of thing and may feel threatened
you you mentioned very specifically this will be an evolution there and it’s
going to be complementary not replacing it will it won’t disrupt to the point of
through the through the adoption of these techniques and most people will
move to it’s not going to disrupt a livelihood aside from helping them
become so it’s going to become complementary
rather than desecrating yeah I think I mean I guess if we if we look at you
know vertical farming I mean why doesn’t any farmer here or have their own
vertical farm why can’t they run their farm in a supply chain as well so I
think you’re gonna see this this change obviously there’s a couple of early
players like plenty and air farms driving this today I think they’re going
to really set the bar and show the way but you know does that become something
that other farmers can deploy themselves you know in the supply chain I think it
can be yeah with the local sourcing that consumers want today and knowing where
that came from I was grown certainly that’s 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 aligned we don’t want
we don’t necessarily we we cannot lead the technological revolution there but
how can we make sure that regulations don’t inhibit or hold it back in that
way it’s a challenge here in USDA at DC to make sure our regulatory environment
the president’s been very interested in fact I think that the D regulatory
environment that he’s created has been almost as much a part of the economic
boom that we’re seeing here as tax policy so people want to know
entrepreneurs want to know that you’re not going to hold me back if I’ve got a
great invention so how do we do a better job of lining USDA regulatory issues
with that and I know one of the things we’re dealing with right now is new
breeding techniques how do we how do we do the in animals in that way yeah I
mean the this is it’s a very complicated and a big challenge I think regulation
will slow down innovation it will slow down the flow and the rate of what we’re
trying to do at the same time you need regulation you know like there’s
significant data out there you know on people’s businesses you know and you
know farmers need to be sure about what what’s going to be done with their
information in terms of privacy so I think that there’s definitely a role
here to make sure that there’s regulation but
same time this data could make us much more productive if it’s actually
interpreted and analyzed the coordinates so I think that balance I think is very
very important I think one of the areas that I would say you know moving on in
terms of how we could drive somebody innovation is why can’t 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 you know whether
it’s in Silicon Valley are on digital and automation where it could be in
Research Triangle or you know various different locations I think it’s
important for us to identify these key technologies whether it’s robotics
automation control environment you know on the on a biotechnology side but set
up areas of excellence where we can lead not just only research but super farms
where we can bring entrepreneurs small over the world put their technology into
place and demonstrate to us that this is going to reduce the cost it’s going to
increase productivity and also we can lead the world here so I think there’s
an opportunity for us to kind of create super farms that can really demonstrate
this and obviously with connectivity is a big issue and a major challenge for
the industry you know it’s very hard to enable technology without connectivity I
think you know a few weeks ago I’d my kids with power outages in California
with the fires and my kids came to me didn’t realize that the lights were off
didn’t realize the power was off or the only thing they realized was there was
no Wi-Fi so so if you think how important that is I think in terms of
every rural environment we you know 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 that 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 could be
great areas where we can actually drive you know drives us forward I think
you’ve just given us da a good idea here to create certainly if we can put 5g in
our now NFL stadium we put in super forearms and that way to
do that but I I know that I did visit in North Dakota and Governor burgum who was
had a career in Microsoft they were creating a smart farm environment there
and doing many of the things you’re talking about I love the I love it the
terminology super farm and I’d love for USDA to be facilitating that going to
Congress and saying let’s create some demonstration plots out here for the
future because those ideas come out of Silicon Valley need to be proven in the
field in someplace that’s right you know as I said I just came back from
Australia we were in Melbourne and the Victorian Government are really driving
hard in terms of connectivity you know in locations there and they’ve created
an initiative you know like this didn’t 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 they’ve kind of come out with these
super clusters whether it’s around next generation foods and protein next
generation in terms of you know data next generation or you know automation
and robotics so I think we need to you know we’re leading the world already but
I think we need to be careful that we don’t get complacent fertile and I think
you know having this kind of a focus in terms of having these clusters aligned
with challenges that are going out to the industry worldwide are out
entrepreneurs to say solve this problem increased productivity by far you know
40% reduce our footprint by 50% and then breaking that out putting the challenge
out there every entrepreneur bringing them over here and putting them on our
super farms and as these super farms demonstrate the future let’s bring that
right across the United States across the Midwest and across the west coast in
the ecosystem we have in the United States is very fertile for that we’ve
got obviously private sector research public sector research and we’re talking
about trying to line we’ve got entrepreneurial innovators and
demonstration farms over that but we also have an extension service that our
land-grant universities that’s very good of getting the best and the best ideas
and productive ideas out to a wide
cross-section of people so just like we were talking today we know the things
that can produce soil health over no-till and cover crops and those kind
of things but we don’t have universal adoption yet
there yeah and that’s 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 that we see as we
understand more the biology that’s going on in the soil itself from a
Productivity we’ve gained a lot over genetics and will continue to do
genetics improvements but I think soil health is also a huge component
absolutely and again you know some of the technology is already there you know
there’s you know two young girls from Stanford University set up a company
called trace genomics and you know they’re four years old the company’s
growing and scaling and they’re really focused on this area and they’re you
know they’re they’re driving the whole area on on soil health so how can you
how can a company like that scale and how can we get that adoption of their
technology into into the fields across the cost across the u.s. well John
you’ve you’ve challenged us we want the globe to thrive by feeding everyone and
divert doing while we’re doing right and I think your contribution there we’re
delighted that you have focused in the food and agri-food sector and the supply
chain there of helping us to accomplish some of these go bold goals that we have
and I look forward to a continuing relationship we want to invite you to
help us hold USDA accountable and as you see things that could enable and
facilitate the the technological advances that will help us get there I
hope you’ll feel free to help us do better well thank you very much
secretary it’s an honor to be here I know in my you know last ten years I’ve
spent much more time in this industry and I’ve been humbled by the industry
and I’ve been very passionate about this industry because it’s it’s really
investing in our future and and you when I look at our children I look at
our families this is the industry that’s gonna make a difference to our world to
our health and also to our families so there’s nothing more important in this
industry and that’s why I am really here and motivated to make it happen well I
think the producers in the audience today and across their to hear this I
think would be very proud to hear you say that you’ve been humble by the
challenges and the complexities of production agriculture that makes
somebody like you that’s on the cutting edge of innovation and make us feel
better out here it’s doing it it’s easy kind of manufacturing a smartphone it’s
difficult you know producing food and bringing it to the most complex supply
chain of the world in fact some people even think it’s easy farming all right everyone we’ve got a little
bit of a time for a break right now so feel free to catch up with your favorite
innovator out over coffee we’ve got a great lineup for you coming back at make
sure you’re back here at about 10:15 10:15 we’ve got us we’ve got speaker
speakers from Iowa Nebraska Indiana and also from the Food and Drug
Administration so thanks everyone be back here at 10:15 so Scott you got your everybody if you could please take your
seat folks in the back could please come on in and take a seat we’re ready to
begin with the next session of the program so again appreciate hope
everybody enjoyed the break got a refill on coffee and is ready to go for this
very exciting panel that we have next again if people in the back could please
have a seat come on in take your seat once again as we get ready to roll it gives me great pleasure to introduce
for our next panel our moderator and facilitator of this next panel and it’s
dr. John Newton dr. Newton is chief economist for the American Farm Bureau
Federation the largest organization of independent farmers in the United States
in this role dr. Newton is responsible for the management of Farm Bureau’s
Economics Department and coordinates and conducts analysis used for the
development and advocacy of Farm Bureau policy on the hill prior to joining Farm
Bureau Newton was an agriculture economist for USDA and was detailed to
both the Senate Agriculture Committee and the USDA office of the chief
economist following a service to USDA and the congressional committee dr.
Newton was was an award-winning faculty member at the University of Illinois
urbana-champaign Newton is a Kentucky native and holds two masters and a PhD
from the Ohio State University please welcome dr. John Newton good morning that was terrible good
morning that’s much better I’m glad that the
deputy secretary put the V in there we were trying to trademark that at my alma
mater but I don’t think that was successful but I’m John Newton I’m the
chief economist for American Farm Bureau Federation
we’re the largest general farm organization in the country we have
nearly 6 million farmer and family farmer members across these United
States and and I have the opportunity in my role as chief economist to travel the
country and visit with farmers around the country and see firsthand the
efforts of farmers and ranchers on innovation and I’ll tell you when I
visit with our farmer members across the country when I visit with other farmers
across the country I’ll tell you farmers are more than folks they’re just playing
the dirt farmers are meteorologists they’re entrepreneurs they’re risk
takers they’re economists they’re scientists
finance ears veterinarians inventors and innovators those are the farmers that I
engage with on a day-to-day basis farmers must reinvent themselves every
year reviewing the lessons of the past and adopting to ensure we never repeat
past mistakes and be better and more productive than we were the year before
our dairy farmers and livestock producers innovate to improve efficiency
turn waste products into fuels and to better care for our animals and I think
one of the places that we see that the most and one of the most important
conversations that agriculture has been having for the past year and a half is
one around sustainability and one about climate change I think it’s important to
put in the perspective where US agriculture is in that conversation
globally agriculture contributes about 24 to 25 percent to greenhouse gas
emissions and co2 equivalent in the United States because of our
innovative techniques because of our technology adoption whether you’re using
the economic sector measure or the IPP IPCC measure from the United Nations US
Agriculture contributes about eight to nine percent of greenhouse gas emissions
in the United States some people talk about livestock and livestock scon
tribution – greenhouse gas in the United States maybe if you don’t put milk in
your coffee you can reduce our greenhouse gas exposure but if you look
at dairy farms for example 0.6 percent is what dairy farms contribute to us
greenhouse gas emissions the beef cattle sector contributes one point nine five
percent to us greenhouse gas emissions and the pork sector contributes less
than point zero four percent to us greenhouse gas emissions collectively
animal agriculture contributes less than three percent to us greenhouse gas
emissions and that’s because of the productivity the technology and the
innovation of American farmers American livestock producers and their
agribusiness partners across the country including the Department of Agriculture
many people call the farm bill the first green New Deal and it’s because of the
efforts in the conservation title that we’re able to achieve a lot of these
goals and if you look at each sector look at the livestock sector on the beef
side if you measure as an index beefs contribution to greenhouse gas emissions
per unit since 1990 when the EPA first started monitoring the greenhouse gas
data beef contributions are down seven percent swine contributions are down
nineteen percent nearly twenty percent and the secretary mentioned this morning
the success of the dairy industry they’re down nearly 25 percent in terms
of their contribution on a per unit basis to greenhouse gas emissions in the
United States over the last thirty years and that’s because of the innovative
techniques technologies increased productivity of the dairy farms all of
that contribute to AG successful innovation story and I
think one of the more and most successful parts of that innovation
story we can find when we look at our row-crop sector if we look at corn in
2018 81 million acres of corn were harvested in 1990 we would have needed
121 million acres to produce the same amount of corn so we were 40 million
acres more efficient in corn production in 2018 than when we were 30 years prior
on cotton we were four million acres more efficient soybeans 42 million acres
more efficient and on wheat 8 million acres more efficient combined nearly a
hundred million acres more efficient in crop production than where we were 30
years ago that’s because of precision agriculture
that’s because of innovation today the secretary announced the agriculture
innovation agenda which includes a goal and you got to go big or go home
it includes a goal of increasing US agricultural productivity by 40 percent
while cutting the environmental footprint of US agriculture by 50
percent by 2050 to do that we must be innovative and we’ve got four excellent
panelists today to share their stories of innovation we have jeff brewing the
founder and CEO of poet frankie honest the Deputy Commissioner of food policy
and response at the FDA Bruce Cutler who I just recently found out as a the Ohio
State University will forgive that was Purdue and Indiana ties their director
of the Indiana State Department of Agriculture and then we have sherry ragi
Fidler president of the farm foundation those are our four panelists today and
they’re going to talk about biofuels climate change rural viability
innovation in agriculture as a solution and digitation
food safety and traceability our first speaker today is jeff brewing the
founder and CEO of poet jeff is the founder and CEO of poet the world’s
largest producer of biofuels poet currently operates 27 by
setting plants with a combined annual production capacity of two billion
gallons of ethanol reducing carbon emissions and improving air quality
nationwide for the past three decades Bruins mission to meet the needs of the
world through agriculture rather than fossil fuels has grown the biofuels
industry while increasing grain demand in rural America stimulating
international economic growth and positioning agriculture to be a leading
solution to the climate crisis please join me in welcoming Jeff to the stage thank you I’m excited to be here today
to talk to you a bit about something really big today we’re going to talk
about the planet Earth but you see him up here on the screen of the timeline of
the history of the planet it shows the past the present and the
future let’s take a look at the past so how do we sustain ourselves for tens of
thousands perhaps hundreds of thousands of years on the planet Earth well it’s
pretty simple plants grew on the planet Earth animals consume the plants people
consume the plants and the animals eventually we even had row crop
agriculture using the animals that till the land and the waste from the animals
went back to the earth as fertilizer in the wastes from the plants and the dead
matter went into the earth and became crude oil
I believe God made the earth to hold unlimited amounts of carbon unlimited
think about that he made the earth to hold unlimited amounts of carbon so in
the past everything was in balance on the surface of the planet Earth then
came the next era the Arab oil and the timeline of mankind this timeline is
probably as wide as your fingernail it hasn’t been that long a hundred and
fifty years and hundreds of thousands of years we’ve had the era of oil so began
taking that dead matter back out of so well not of the earth extracted about 50
million years of it over 150 years and blew it up into the environment
anybody think that’s just a little bit out of sync made 50 million years 150
years yeah probably a little bit out of sync this has caused enormous
environmental damage today more than 20,000 species of plants animals and
bacteria are going extinct every year there’s only nine million on the planet
you a recent University of Arizona study in fact was in the paper last week
showed that one-third of plant and animal life will be gone in 50 years
permanently gone you can’t get it back how long before we have catastrophic
consequences from our choice to pull dead matter out of the earth how long
can we may wait to make a change so what has to happen in the future to fix this
problem we created well I feel there’s only one choice we need to return to our
roots literally we need to stop extracting oil from the earth it’s going
to take time but it’s got to start now we need to return to agriculture in the
future I believe AG will provide the food fuel and fiber to sustain all life
on our planet it’s a little-known fact that starch and
cellulose which my company processes are the building blocks of almost everything
that come from a barrel of oil and the byproduct is food protein oil and
micronutrients we can use the feed people all over the planet and the more
we make the lower the price gets for the food so y’all think it will it cost more
it’s gonna cost more to make it out of agriculture instead of oil well not
necessarily today biofuels are significantly cheaper than the oil that
they replace and that’s what zero subsidies in fact oil still carries some
subsidies we have none so why is this happen because oil prices
have increased exponentially in the last few decades while commodity prices have
stayed pretty much the same due to increase in yields and I believe that
will continue in the future will continue to have higher and higher
yields and very competitively priced commodities while oil which is running
out will get more expensive so the opportunity is here and the time is now
in my opinion the only way to avoid the catastrophic consequences of climate
change this return to agriculture now here’s another thing you’re not thinking
about biofuels will need to be a catalyst for profitable sustainable
agriculture what was the most profitable time in agriculture in the last 50 years
when biofuels saw explosive growth we tightened up worldwide commodity
supplies and prices went up farmers need a profit to invest in the technology of
sustainability we can’t expect them to lose money and invest in sustainability
so biofuels will need to grow to bring worldwide prices up if we do move to eat
from each end e15 seven to eight years ago what should have happened commodity
prices would not be where they are today they’d be much higher of course we’ve
been fighting a lot of battles of course against our opponents to get there you
would not believe the battles oh I’ll show you a book on the history of it if
you want to see it it’s been a tough tough road and the 30% increase in
biofuels by 2050 announced by Secretary of Purdue per day today will play a key
role you see we simply can’t eat we can’t eat
what we produce and we never could are you all aware that a recent Stanford
study a few years ago showed that a billion acres went out of production
while the US and Europe subsidized grain for 50 years billion acres went out of
production the agricultural capacity of the world is virtually untapped and
nobody seems to know it virtually untapped let’s look at our other demand
sources exports really haven’t changed in the u.s. in more than 30 years
in addition other countries around the world are producing more and cheaper
grain so what’s the opportunity for us agriculture how about we process our
crops right here into higher-value biofuels and bioproducts and export
those around the world in fact that’s what my company does and we can do a lot
more of it and what else can we export with it
protein oil and micronutrients which will get cheaper I’ve been to Africa
numerous times those kids that don’t grow here in Africa it’s because they
don’t have enough protein let’s lower the price of it and send it to him as a
by-product everyone in this room needs to tell the story the farmers don’t just
produce food they precede fuel and fiber they’ve already been doing it for
decades I’ve been in the business of 32 years of taking starch and turn it into
biofuel and shipping the byproducts all over the world because – we produced 2
billion gallons of clean burning fuel 10 billion pounds of high protein products
that go around the world and 500 million pounds of corn oil that becomes
biodiesel that’s biofuels as a byproduct of
biofuels how’s that for cool biofuels is anybody
thinking about that it’s exciting it’s very exciting it’s very exciting so you
might ask how can agriculture replace oil I mentioned the AG potential of the
world is virtually untapped I’ll give you an example so we fund a we actually
created a nonprofit that works in Africa and Kenya specifically we’re working 160
thousand farmers in Africa right now we can increase their yields by 400 to 900
percent on every crop they raise including their trees for avocados and
and mangos and we can do it in two years and if for years we can walk away in a
self-sustainable because they all go from starving and not being able to feed
their own family having a surplus and being able to sell so if you look just
at the continent of Africa alone we can bury the world in commodities for 30 to
50 years all we have to do is teach them how to do it helping with some
infrastructure and create the products that can replace oil that says nothing
of India South America China and others who are not using their land of the
fullest and remember there’s a billion acres out there that we set aside that
that hasn’t come back into production while the US and Europe are subsidizing
grain so the agricultural potential the world is huge and I just don’t think the
world understand that but we should tell the story we all need to tell the story
I believe we need to tap the power of the earth through agriculture to solve
the climate crisis AG isn’t the problem you just saw some data on that a minute
ago AG is the solution what will it take to get the message out there it’ll take
all of us working together AG isn’t famous for working together in fact
we’re pretty bad at it we need farmers AG companies AG organization biofuel
produces biofuel organizations food companies the USDA may be our president
sustainability drivers like pan Agana Culver’s and people who are super
interested in agriculture I know them they’re very excited about these agendas
for agriculture and everyone we can convince to tell the agriculture climate
change story we need to tell the world we are the only short-term major
solution to climate change because that’s true if you look at the data the
only short-term solution to climate change will need to fight an oil
industry that’s well entrenched and they spend a lot spend a lot of money to stop
us but I believe we can win it is critical that we win because failure
isn’t an option if we succeed we may literally save the earth and restore a
healthy planet for future generations what kind of world do you want to leave
behind for your children and grandchildren thank you thank you so much Jeff I think a couple
things you mentioned really stand out economic sustainability and the fact
that agriculture can be part of the solution so thank you very much for
those remarks our second speaker is Frankie Anna’s Deputy Commissioner of
food policy and response at the Food and Drug Administration he’s the principal
advisor to the FDA Commissioner on food safety policies including implementation
of the FDA Food Safety Modernization Act his leadership role covers a broad
spectrum such as outbreak response traceback investigation product recall
activities and supply chain innovation mister Yanis came to the FDA from
leadership roles with Walmart and the Walt Disney Company he has long been
recognized for his role in elevating food safety standards and building food
safety management systems based on science and risk please join me in
welcoming Frank to the stage well good morning it’s good to see CH
and every one of you and I’m delighted to be part of this conversation about
the role of innovation and agriculture and food production a topic that’s near
and dear to my heart as you heard by the way of the intro fairly new to the
federal government I arrived at FDA in December of 2018 a little bit over a
year ago and prior to that I spent 30 years in the private sector I spent the
first 20 years of my career working for the Disney Company where oversaw safety
and health including food issues past 10 years I was at Walmart where I was the
global VP of food safety and now for a little bit over a year I’m the Deputy
Commissioner of food policy and response at FDA so I like to joke I went from the
happiest place on earth the Disney Company to the busiest place on earth
the Walmart company and now I’m at the and I’ll let you fill in the blank I saw
some of those mouths moving I didn’t like what I heard I actually think it’s
one of the most prestigious regulatory agencies on earth and I’m delighted to
be here yeah I’m with FDA not USDA when I was in the private sector I thought
well USDA and FDA don’t work together but I can tell you having been in that
role and because of the strong leadership of secretary Purdue and our
Commissioner dr. Steven Hahn and because the American people expect their
government to work together the USDA and FDA are working together better than
ever but even before I joined government one of the things that was really clear
to me sitting atop of the world’s largest retailer was that innovation was
needed for food and in particular the one that I’m really interested in today
and the one that I’ll share with you is digitalizing or digitizing the food
system and I’ll share two use cases just for illustration to allow you to imagine
I think digitalizing the food system is critical because I believe we can create
a safer smarter more efficient and sustainable food system and we have to
so that’s what I’m gonna talk to you about today
now just like the previous speaker that gave a bit of a history lesson I like to
think of myself as a food safety futurist and so any good futurist knows
that they have to understand and learn from the past I love history
and so what I’m gonna try to do if you permit me I’m gonna give you the history
of food production and food processing in one slide in about 60 seconds I’m
gonna go through it pretty quickly at the beginning of time man and I used
the term man affectionately ladies to refer to both genders men and women
would eat food quickly say here eat it before it spoils because they were going
out and hunting and gathering food fast forward over time humans said that food
spoils fast here–let’s salted and we have literally in the literature our
first hint of early preservation techniques after appeared it’s eating
salty food apparently for a long long time
humans said hey that salt tastes best here let’s put that food on ice another
form of preservation humans unsaid that ice melts fast here let’s place that
food in a refrigerator now they’re not the type of GE refrigerators that you
and I have at home but they were wooden blocks that contain blocks of ice for
preservation around 1864 the science begins to evolve with the work of one of
my heroes Louis Pasteur that food still spoils here let’s pasteurize it and food
can last longer and it can be safer 1980 scientists tell us that pasteurized food
doesn’t last long enough here let’s irradiate it we can now have
shelf-stable foods for 50 60 70 years sounds yummy 1997 we start here from some consumer
groups that say that irradiate food is bad for you here heat this all-natural
fresh strength and at the turn of the century this is what we’re hearing that
all natural fresh stuff goes bad here eat this food quickly before it spoils so all you need to know about the
history of food and clearly it’s intended to be a bit humorous and you
laugh but there’s a lot of truth to that it’s isn’t it the pressure that’s being
placed on food producers and farmers are saying we want naturally processed
minimally processed and forgetting some of the lessons we’ve learned from the
past such as consumers renewed interest in drinking unpasteurized milk and the
lessons forgotten about pasteurization so you can see in
some ways we’ve come full-circle and while the slide is intended to be
humorous I want to pause on a more serious note I genuinely believe that
the way forward is not going back to some type of romanticized idea of how
good things used to be but I think it’s this march of continued improvement that
you’ve heard outlined here this morning with innovation technology and change
the reality is the food system has always been changing we talked about
hunter-gatherer you heard earlier today about domestication of plants and
animals and early farming techniques generally around rivers of you
fast-forward to the early 1900s what did you have the industrial farming
revolution with more farmers able to produce more food than ever before to
feed a growing population and letting people specialize in other professions a
mere hundred years ago a lot of the people in society would have been
involved in food production and that’s not so today and so the food system is
changing and it continues to change in the 1980s the typical grocery store had
about 15,000 food products food SKUs how many food items do you think your
typical grocery store has today anybody want to guess I heard 60,000 clothes
50,000 a Supercenter could have up to 75,000 food items I know sometimes I
hear people very critical about the food system
what a terrible food system I think today’s food system is pretty marvelous
are there opportunities for improvement yes but imagine being an individual that
was living in the 1500 through the 1600s and getting in a time machine at
fast-forwarding it to time and walking into our grocery store today
you’d think they’d say what a terrible food system they’d be in awe they say
you live better than kings and queens thousands of different food products
fresh seasonally available foods from all over the world available to you for
a fraction of your hard-earned dollar that’s the great work that all of you
have done but that doesn’t mean that we can’t do better and where are we going I like to think about at the endless
shelf I’ve seen the tsunami coming of online conversion and you no longer
needing brick and mortar in this concept of omni-channel where you can get online
order anything you want from anywhere at any time maybe at your fingertips a
million SKUs that’s the world that we’re living in research suggests that by the
year 2023 it’s right around the corner one at every five dollars spent on food
in this country will be spent on online platforms there’s a tsunami coming of
how consumers are going to shop that’s the equivalent of thousands of grocery
stores popping up all over their country because I online conversion and they’re
more changes coming I believe let me see if you believe this
– I believe we’re in the midst of a food revolution how many of you believe we’re
in the midst of a food revolution if so it raise your hands quite a few hands
going up listen – I think there’s going to be more changes personally in the
next 10 years I’ll predict this not a big better but I’d almost bet it I bet
we see more changes in food in the next 10 years than we have in the past 30
anybody want to take me up on that bet listen to this products will be pre
formulated they’re being reformulated new food sources and production
approaches will be realized they’re being realized and the food system will
increasingly become digitized and I believe in what you’ve heard this
morning is that to succeed in these modern times we’re going to need more
modern approaches I don’t think anybody disagrees with that that’s why at the
agency FDA we announced in April of last year that we were going to be embarking
on an initiative called a new era of smarter food safety will very soon very
soon be releasing a blueprint and will outline how the agency will plan to
oversee food safety for the next decade but it will strongly emphasize the use
of new and emerging technologies the goal is to create a more digital
traceable and smarter food system what is smart a food safety it’s a new
approach thinking about the problems differently
leveraging all of the technologies that are existing in society and used by
business sectors all around us to provoke provide efficiencies and improve
predictive capabilities Dell includes some of the technologies that you’ll
hear today blockchain technology sensors you’ve already heard about that the
Internet of Things artificial intelligence when you look at other
industries or tracking let’s say airplanes for example ride-sharing or
packages that you order online we can do this with Woude we can create what I
refer to as the equivalent of FedEx tracking for food and that will be good
for the food system let me tell you why because the Y really matters why is a
digital and traceable food system important the Y informs how we act
foodborne illness while by a large I think the food system today is pretty
safe there’s still too much foodborne illness and we believe that one
foodborne illness outbreak is one too many one in every six Americans will
experience a foodborne illness every year about 48 million Americans the cost
is up into the ninety eight billion dollars annually loss to the US economy
a digital and transparent food system could allow us to have a safer food
system imagine small reductions in food safety will achieve or deliver hundreds
of millions of dollars to the US economy that’s a good reason how about
traceability how many you remember here’s a picture of the spinach outbreak
that occurred in 2006 their more recent outbreaks what happened
bagged spinach associated with e.coli o157 h7 FDA says we know there’s an
association but we don’t know what brand of salad or spinach it was what do we
have to do we have to go out with a broad consumer advisor and say Americans
avoid bagged spinach basically all bags of spinach wiped from all grocery store
restaurants across the nation sweeping measure takes two weeks to trace that to
source when it’s all said and done it was one producer one day’s production
one lock member the damage that that did to farmers that were unnecessarily
implicated is hard to measure and the damage that that did to consumer trust
is hard to measure it some reports and studies suggested that
it was years six eight ten years before the spinach cover industry ever fully
recovered food fraud do you think a digital transparent food system could
deter food fraud how many of you heard this there’s more organic food sold in
the world that is produced in the world how many of you buy organic I just by a
show of hands just make sure it’s true just make sure it’s true how about the
horse meat scandal in the UK a few years ago remember that horse meat prices were
down beef prices high they had a glut of horse meat some unscrupulous suppliers
decided well we’ll just substitute horse meat it’s to the beef consumers were
going to the grocery store buying what they thought was 100 percent beef
lasagna and guess what there was no beef in it whatsoever do you think a digital
transparent food system that can trace back to a fraudsters door would be good
absolutely it would be good regulatory requirements no need to be doing this on
paper food waste you’ve heard that a couple times a day I worked in retail so
I like to think of it this way imagine going into your favorite grocery store
buying three bags of grocery and as you walk out of the grocery store you take
one of those bags of groceries and you throw it in the garbage can that sound
ridiculous sounds really ridiculous some of you say you’re crazy but that is in
essence what’s happening everyday across the land and I’ve seen how these digital
tools and learning by working at a very large supply chain that had pretty good
supply chain logistics how small tweaks and improvements commit dramatic
benefits and allow you to flow food and reduce waste and then lastly the
consumer is asking for this consumer expectations are changing I worked at a
discount retailer for 10 years I will tell you consumer expectations at the
beginning of my tenure were drastically different than at it by the end of my
tenure even in discount retailer consumers wanted to know more about the
food how it was produced and where did it come from
and so hopefully I’ve convinced you the why we’ll be outlining the work that
we’re going to be doing to create this new digital transparent food system
under what we’re calling a new era of smarter food safety and it’s time I have
meaning I just want to give you two examples to illustrate what I mean you
can see those are the four focus areas Tec enabled traceability smarter tools
prevention new business models as food system changes in retail modernization
in food safety culture but let me talk about the two that I want to which is
tech enabled traceability and new tools for prevention in terms of tech enabled
traceability I’ll tell you why here’s another example of why it’s important
how many you remember just this past Thanksgiving and the Thanksgiving before
that the romaine scares in 2018 there was a scare and the CDC and FDA advised
consumers to avoid romaine regardless of where it was grown because we couldn’t
tell where those illnesses were coming from again the damage that that trust is
pretty important unfortunately last Thanksgiving there was another outbreak
there was progress made in that one year the Advisory in 2019 wasn’t to avoid
romaine lettuce from all over the country it was more an error on the
scope that was based on good work done by some state health department’s the
role that states play an Ag and food is critical but we had some firms one
retailer and manufacturer particular starting to adopt tech enable
traceability and that allowed us to trace it back to Salinas California so
the devisor e was limited but you can fast forward into the future and say if
these tools become more abundant we could trace back to source for precision
and identify maybe it came from a particular ranch or a particular farm
when I was in the private sector a couple of years ago I’m going to
illustrate how this looks and how it adds value I did a proof of concept what
I refer to as the life of the mango I’ll go through this pretty quickly but I
wanted to see if this new and emerging technology called blockchain could play
a role in traceability I’d been pursuing the holy grail of trust ability for a
long time this is the life of a mango mango seedlings get planted generally in
small farms in North and Central and South America takes about six to eight
years for those mango seed links to produce fruit the mango trees are
bearing fruit and they’re ripe farm crews come out pick the mangoes take
them to a packing house they get washed treated box shipped by air lands
United States you can see in this example those mangoes were further
sliced in place than clam shells they were then sent to 40-plus distribution
centers across the United States and eventually made their way to 6000 retail
outlets pretty complicated journey I wanted to know how does traceability
work the world’s largest retailer with very modern supply chains I took a
package of sliced mangoes literally came in to one of my staff meetings put it in
the center of the conference room table and I said trace back study starts right
now trace these mangoes back to source how long do you think it took the
world’s largest company to trace those mangoes back to source anyone I guess
six days 18 hours and 26 minutes seven days and they’re supposed to be good at
it we then started working to capture that
information and very useful simple fashion on the blockchain reran the
study scanned the packed and mangos was able to trace back to source in 2.2
seconds that’s food traceability at the speed of thought now what does that mean
it’s what it means it’s really important if there’s a food scare you don’t have
to pull all those mangoes you can identify what was the problem the other
thing that we learned was the benefit to freshness was important because we
started lighting up the supply chain and having better data than we ever had
before and we found out that there was two to three days to get across the u.s.
customs border for every day of shelf life or removed from that border
crossing that’s a day a shelf life you give back to the consumer that could
also change how many of you buy these mangos they’re generally not too ripe
because they pick them when they’re not quite ripe because they’re concerned
about shelf-life and so you could even my optimized so that you have a fresher
product I’m persuaded that there’s a strong public health and business case
for better traceability let me close with another use case but let me go back
and say that example that I gave you it’s not about blockchain I believe in
blockchain technology because if you understand how it works is it’s
decentralized and distributed digital ledger and the food system is a
decentralized and distributed food system it’s going to be hard to get
everybody in the food system in a centralized database
it’s different but it’s not about blockchain it’s about better
traceability and smarter supply chains the other example I’ll give you and then
I’ll close is ai ai sounds like it’s like saying people are chasing the shiny
coin we’re not imports in the United States Americans expect their foods to
be safe whether it’s imported or domestically produced what percentage of
the food do you think Americans either it’s imported from abroad smart group of
people here it’s not as high as people think it’s 15 percent our estimations
it’s much higher in some commodities seafood we estimate that about 94
percent of seafood consumed in this country is imported that one’s really
high so we did a proof-of-concept using a technology tool that we’ve used that’s
been pretty good predict that ranks import lines and then we didn’t pull
samples and we analyzed them to see if they’re violative than me at u.s.
standards we added on some functionality of machine learning onto an existing
tool looking back at two years of data retrospectively to see if it improved
and what do you think happened it dramatically improved dramatically
improved our capability of finding violative products not very hard but
your earlier today there’s a lot of data and the human mind just can’t comprehend
that neither can old-school traditional statistical techniques but some of these
new tools can and so imagine all of these million lines of food shipments
coming into the country those containers imagine having a tool that lets could
let’s say increase your predictive capabilities by hundreds and hundreds of
percent to say that’s the container you should look at that’s the container that
has the violet of food product that’s what we’re talking about let me close
with this I hope I persuaded you that digitizing is really important but what
I want you to think about is not what about I want you I want you to think
about well what if I want you to close with just imagining imagine how
different our work and your work could be if we use some of these tools to make
work and lives better imagine this imagine knowing the
potential of weather impacts from places affected let’s say by hurricanes or
floods that maybe hundreds of miles away because we’re leveraging big data
analytics imagine sitting here in this room being concerned about water quality
being used on your farmer and your food production facility and saying now I
feel good about it because on your handheld device you’re
looking at some type of feed from sensor technology and saying my water quality
has under control imagine having greater confidence in the
food that’s being provided by you or to you and your supply chain because
somebody in your organization is using a tool like AI to dramatically increase
your predictive capabilities or imagine going into a grocery store buying a bag
of salad and scanning it and knowing where it came from what certainty what
we’re talking about this morning aren’t things that can’t be done they’re
already being done we just need to use them we’re talking about innovations to
create a safer smarter and more sustainable food system we can do this
no no we will do this and we will do this together thank you for listening thank you so much Frank that was very
very exciting presentation our next panelist is Bruce Cutler director of
Indiana State Department of Agriculture Bruce Cutler is the appointed by
governor Eric Holcomb on January 8th 2018 Bruce was appointed to governor
Holcomb’s cabinet in December of 2019 he also serves as a director of
agribusiness development for the Indiana Economic Development Corporation and
reports directly to the Lieutenant Governor Suzanne crouch
prior to joining Indiana State Department of Agriculture as I indicated
earlier he was a Buckeye but Bruce worked as the director of public
relations for Becks hybrids and brings to the department over 30 years of
agricultural leadership experience and knowledge that spans from production
agriculture and sales to community and Industry Relations please join me in
welcoming Bruce so staged thank you John I appreciate that so I’m here from a
state government and so not only did he blow my credibility by being a Buckeye I
suppose now I say I’m from state government try to make that to make that
even better I guess but thank you it’s an honor to be here I certainly look
forward to learning along with all of you about a lot of things that are
happening and and the theme of the innovation imperative is just really
intriguing to me not as much the innovation part but the imperative and I
think that we’re hearing a lot of a lot of work around how imperative and how
important the work that we’re going to be doing is is important and a lot of
people might say why should someone from a State Department of Agriculture be
part of this conversation aren’t you folks like stifling innovation and real
slow and stodgy and well maybe there is some of that I think that there is
probably some of that but I think it’s also important for us to understand that
that there’s a lot of folks involved and I want to start with this thought that
no individual sector within what we do in the industry of
Agriculture operates in this vacuum it might be the public and private sector
working together it might be that we’ve got rural and urban we know that there’s
a lot of things changing with the food system around that I think we need to
understand that farmers the Agri businesses that support them and then
the rural communities and the consumers where they are wherever they might be
also are part of this in fact you can probably take these each of those
individual circles and put circles within them because it becomes pretty
pretty complex pretty quickly and so no one operates in a vacuum and there’s a
lot of interdependence that happens when we think about where we are with that
real quickly I just want to start with our department as a state Department of
Agriculture these are the the five divisions that we operate in I’m going
to spend just a few minutes on several of them talking about how we look from
an innovation standpoint and what we do the reason I throw this up here is is as
a state Department of Agriculture we’re organized quite frankly differently than
most of my counterparts and their departments across the United States in
that we do not have a significant regulatory function within our
department with the exception of the Indiana grain buyers and warehouse
licensing agency the rest of the regulatory functions within our state
that affect agriculture are within different departments around there so I
start with that to say that that what we look to do is to focus on a couple of
areas that we’re looking at and really it’s about how we participate in the
process and how we make sure that we’re looking from an innovative standpoint to
be able to make that and improve that I want to start with that public affairs
piece really it’s about advocating or making sure that we help a lot of people
understand what agriculture is about what agriculture does and what it’s for
it was mentioned earlier this morning I think my secretary Purdue we really
don’t tend to be very good at telling what we do whether it’s on the farm or
even within the AG businesses and and people that help assist with that so
from a policy standpoint we look not only federally obviously
from a state perspective within the department but we also get involved in
local efforts to try to make sure that we’re working on the right things that
that farmers and people involved in that process want us to work on really it’s
about us helping to provide guidance and awareness to each of those sectors so
we’ll work with our our legislators that are here in Washington DC will help work
on on local policy sometime to make that happen
really what it amounts to is sometimes we find ourselves because we don’t have
that significant regulatory function we very often find ourselves as a policy
broker I’ll give you an example when when the folks that are regulated let’s
say it can find feeding operation very often they may have they want to
understand what their what their to operate under but they may not want to
go to the regulator the regulating agency to start to talk to have those
conversations well as an agency we can help with that and do help with that on
a pretty regular basis and sometimes even between state state agencies like
our Department of Environmental Management Department of Natural
Resources there are areas that affect our farmers and we we often play that
policy broker then the other area of course is simply from a communications
whether it’s public relations use of our social media channels we get involved in
advocating the next area is youth leadership and work for – Workforce
Development some folks might say is this really have anything to do with
innovation in agriculture I would argue that’s really really important and we do
get involved in you may have noticed on that slide the State FFA Association in
Indiana actually is housed within our department and so we look from an
agriculture education standpoint the classroom piece if you will to the State
FFA Association and we have the leadership within our department and it
just presents a lot of really unique opportunities for example one of our
staff members who focuses on the AG education piece really is embedded
almost every day with the governor’s workforce cabinet and folks involved in
state education she’s a she really brings a unique
perspective to help them understand what are the future jobs going to look like
what are the skills that are needed in the future in the industry of
Agriculture so that as a state we know and understand what we need to work
toward what do we want to have happen and and starting in our high schools and
junior high schools and working up through post-secondary education another
example we had a trade mission lieutenant governor and I took a trade
mission to outside of the United States last fall and we took the FFA
organization with us to help talk about agriculture education youth leadership
development and why that’s important not only to our state but to our country and
it was really interesting the conversations that were had with people
and other governments outside of the United States to make that happen you’ll
notice in the upper corner I mentioned Agri Novus Indiana this is an
organization that is focused on the AG Biosciences John knows them very well
and has been very helpful with a lot of things Agri Novus Indiana has been
formed to focus on that area but a lot of what they do besides trying to make
sure that that the AG bioscience sector within our state is is growing and it’s
functional and we have the workforce there to make it happen one of the
things that they do and they’re working on is trying to help people understand
in what I would call the non-traditional areas maybe outside for example of our
land-grant universities why there’s a good opportunity in agriculture to be
able to participate in these sciencism for example rose-hulman is a university
in indiana well-known really worldwide for its engineering school we probably
aren’t doing a lot to talk to Rose Hulman about the engineering
capabilities in food and Ag and Biosciences – to those students that
rose homeland and their parents and they’ve got a Agri novus is building a
tool called field atlas that is really going to help students and parents at
the high school and even even younger age know and understand that next area
soil conservation and water we’ve heard a lot this morning all
about how important this will be in Indiana we we reside really in two major
watersheds of course the Mississippi River watershed or Basin and the Western
Lake Erie Basin and I’m sure a lot of you have heard over the last several
years about Lake Erie and the problems and issues and and things that are going
on a good part of the northeast part of Indiana resides in that basin as well so
soil conservation clean water is really important to our farmers and to be able
to make sure that they’re doing what they need to do the approach that we’ve
taken on this is really a partnership approach you’ll notice that I’ve got
listed on there a couple of agencies from USDA at the federal level NRCS Farm
Service Agency then we also work with the local Soil and Water Conservation
districts so the approach is truly a partnership we have formalized this
partnership in what we call the Indiana conservation partnership really it’s
trying to look statewide not just within water basins or within one Basin or the
other but we’re looking statewide and the idea is that a landowner and a
farmer they don’t care if it’s the federal government the state government
or even a local Soil and Water Conservation District that is there to
help them in fact many off many times and very
often they have to work together to be able to help them accomplish some of the
practices that they want to put on there so we have formalized this partnership I
mentioned that it’s statewide and more importantly this confident this
partnership has brought in the commodity groups on the crop side it’s brought in
the livestock groups and we’ve even brought in the Nature Conservancy into
this partnership for example and to take a holistic approach at what needs to be
done and make sure that we’re we’re doing the right things and we want to
have that so not only we’re doing that I throw up some information from this
partnership this is 2018 data we don’t have 2019 quite finished yet but you’ll
notice that this partnership in 2018 implemented over 22,000 practices on
farms and in the state of Indiana and you can see
the the information there on the side by the graphic about what we accomplished
in that one year alone almost 2.8 billion pounds of sediment that did not
flow into the waters in the state of Indiana so again if we work together and
we we keep in mind that landowners and farmers really don’t care whether it’s
its federal state or local that’s working on it but if we’re working
together and we align that we make that happen the other thing we’re finding is
this alignment really helps from from a private sector perspective we hear a lot
about sustainability well we all know that everybody has their own definition
of sustainability but if we can start to show data and information about what
we’re doing how we’re affecting it it really helps to line those efforts up
from from the private sector and even nongovernmental organizations the soil
health aspects start to become an important part of the conversation and
we make sure that it’s done so we’re aligning those folks up we’re getting
them together and making sure that they understand that this is just not
something that only farmers or only landowners are out there on their own rural economic viability this to me
whether we think about farms AG businesses rural communities this is a
really important part to me and very often it gets ignored
I believe so part of what we’re trying to do is as a state Department of
Agriculture is is find ways to look at how we view our rural communities a
little bit differently and what does that look like and what we want to do I
believe that we have to get this right as as businesses transition whether it
be generational transition or the advent of technology that helps to be able to
make those transitions different we’ve got to make sure that we get this right
in my opinion so our department in fact part of my role as John mentioned in in
the introduction part of my role is to work with the Indiana Economic
Development Corporation we have an Economic Development Division as you saw
on the slide and part of my role specifically says I’m going to work with
these folks to make sure that we have a focus on Agri
culture that were the folks that can be sitting at the table when a business
wants to grow or expand in our state or if we want to recruit them into the
state of Indiana we make that happen so really what it allows me to do is to
what I refer to as scope the realities because we’re working with these folks
they very often think about jobs wages and those are the numbers that is kind
of their report card typically from an economic development standpoint nothing
wrong with that that’s good but in agriculture we have to think
about it maybe a little bit differently it’s it’s it’s just a little bit
different so Jeff talked about so if poet wants to wants to bring a plant
into the state of Indiana very often folks in the economic
development level may say it’s I don’t know what 40 50 60 jobs something like
that maybe okay a lot of people would say well that’s not really very many
jobs I would argue in a lot of our rural areas those are huge that’s a huge
number of jobs that affect these and the jobs and the wages that they have are
important so part of my role is to scope the realities of what happens when a
business wants to come into our state one we’re a large manufacturing state
Indiana’s one of the largest manufacturing states in the country so
they tend to think about things in terms of raw materials going into the process
well in agriculture we have to help them understand what those raw materials are
and what do you do with the raw materials and do you have the right raw
materials to feed into that that manufacturing plant if you will from an
agriculture perspective and then try to help make sure they understand that the
impact of the jobs whether it’s ten or whether it’s fifty or a hundred can be
very large in rural areas and that’s what we do one of the one of the ways
that we’re doing something a little bit different is what we call a gas at maps
and that’s an example that you see on the on the side of the screen about 18
months ago we initiated a process and and develop what we call the rural
economic development model we work with Purdue Center for regional development
our commodity groups Indiana Economic Development Association and essentially
what we does we’ve taken USDA AG census data
and we’ve digitized it and put it in a format that these folks can look at this
map that you see is our hog concentration or hog numbers so the
larger the bubble the more concentrated or the more number of hogs that are in
that area so when we can go to a local economic development group and help them
understand what are the AG assets that are in place in your area but more
importantly what we’re trying to get them to do is not just think about their
County or maybe their their town or their small city but to start to think
more regionally about how this impacts them and by having these maps they start
to see and it we’ve got this on all the crops all the commodities even on
hardwoods in our state it starts to allow these folks to think more
regionally and know and understand that it’s more than just our little town we
have to start thinking about it outside of our little bubble and making sure
that we have it and it’s been very very effective we’ve got a lot of excitement
around this and people are figuring it out and lastly from an economic
viability standpoint in our rural communities I think the quality of life
and what we can do to affect quality of life is really important a lot has been
mentioned about rural connectivity we’re working on that as well we have a
position within state government called the director of broadband opportunities
I’ve taken it of myself as a personal mission to help him understand how
agriculture has to be connected and why it’s important he is he admittedly he
knows nothing about agriculture but I’ve taking it I’m taking him out to the
farms I’ve taken him to businesses to help him understand why the proverbial
Fitbit for cows or whatever is important and how you make that information flow
so that we get it done our legislature legislature and governor last year
implemented a grant program called next level funds it’s about a hundred million
dollars they’ve gone through the first round we know a hundred million dollars
is it going to fix the complete problem but it is an effort to start to say okay
the areas that are unserved with good connectivity or underserved we’ve got to
start to work on them and make that happen and we get involved in that
process on a regular the last example down there is Indiana
grown this is a membership program that was started five years ago in our state
I know probably almost every state has this but basically it’s a way to say
that products whether it’s food products or whatever it might be that are grown
raised process in our state have a certain level of professionalism if you
will in a certain level of activity and we’re working hard on this it’s it what
we’re finding is the diversification on the farm whether it’s livestock crops
even food happening on the farm level is growing the Indian of grown for schools
is a fairly new program where any and of grown members we’re connecting them to
their local school cafeterias and their food service folks to again I think was
mentioned this whole local food movement trying to help members plug into their
schools where they can supply food to those schools and we’ve had some great
efforts around healthcare a lot of health care facilities are looking to
find ways to take food as medicine if you will and we’ve got several examples
where this has happened where Indiana grown members are supplying locally
raised locally based foods into healthcare facilities to be able to be
able to make that a reality for what they want to do and so I think those are
ways that we can help try to make sure that our quality of life in our rural
areas is improved really what it comes down to if you think about it is
collaboration collaboration is key in this whole effort to be able to make
this work so we as a department are really trying to find ways to think
about how we are innovative in our work we’re innovative in our policies that
maybe we work through and more importantly innovative in the
relationships that we have as a department to making sure that we
collaborate effectively and I I love this quote because great vision without
great people is irrelevant and it still comes back to the people and we firmly
believe that we have to make that happen to make it successful thank you for your
time I appreciate it I look forward to meeting more of it thank you so much Bruce our fourth and
final speaker of the panel is sherry Wragge fiddler president of the farm
foundation sherry is a fifth-generation farm owner and operator from Nebraska
who began her career in London and finance and then with the Boston
Consulting Group recently she led a sustainability focused AG tech firm was
then CEO for a group of a thousand farms before recently joining Farm Foundation
as their new CEO and after visiting with her yesterday I also learned that sherry
is a graduate of Harvard University so please take an opportunity to welcome
sherry to the stage or should we say the Harvard University sorry couldn’t resist
that so I am delighted to be here today and even though farm foundation is a
multi-stakeholder organization I’ve chosen to take a farm level perspective
for my remarks today because I thought it would be complimentary to what the
other folks have been talking about today so if you could help me out I
would like to take the pulse of the room to see how many other farmers are in the
room today can you raise your hand let me see awesome
that makes me feel good well thank you for all that you do as innovators and
leaders and I hope that you’ll share your insights with everyone else in the
various sessions over the next few days so in terms of what I would like to
cover today I’m gonna start with the brief in tow
and I’m gonna be wearing two hats I’m going to wear my personal farmer hat and
I’m gonna be wearing my farm foundation hat so we’ll cover that a little bit and
then at the risk of being a bit of a debbie downer I’m gonna talk about some
of the challenges of being a farmer the innovation is a solution and then try to
share three examples across the u.s. of how innovation is being used across
different types of farming systems then maybe turn
the innovation as a solution on its head for a little bit so hopefully you’ll
engage with me there and then close out with ways that you can collaborate to
help with this so I want to start with my why it’s why I’m here I’m very
passionate and hopefully you’ll pick up some of that from me today I’m basically
sharing my photo album with you here I’m a fifth generation farmer we celebrated
our hundred and fiftieth year of farming in Nebraska and as you just even see
from the collection of photos there we are a family business just like most of
the farming operations across the u.s. so I’ve shared my family there with you
I also thought it might be good to show literally some of our photo albums so
what you see there is what farmers are often proud of is what we photograph so
we photograph our families just like all of you do and we’ve photographed the
things that we’re proud of or that we’ve invested in so you see the first awesome
barn that we built when we landed in Nebraska from Germany there that little
pinstripe barn you also see some of the equipment that we as a family are proud
of that we’ve invested in in terms of our heavy equipment our irrigation that
came late to our farm in the big scheme of things what I wanted to show was
really our technology and forward-looking
aspects of our farm so I was going to show a photo of all the apps that I have
on my phone that we can run our farm with but I didn’t want to show you the
brands that were using it and and biased you all but I will just say that I’ve
shared that that has been a huge transformation on our farming operation
I was able to check on our irrigation equipment when I was in Ethiopia and see
if it was on or offline and I only somewhat jokingly said I do have
challenges using that same technology in parts of the US to check on my
irrigation equipment so that is something we have to fix together the
last picture there over the last few years in our farming operation we text
each other photos photos of what’s going on so we text each other are awesome
cover crops we’ve been doubling our cover crops so we share photos of that
last year we shared no photos of innovations
cause of that photo you see down there in Nebraska we had probably the worst
year in our hundred and fifty years of farming so we shared lots and lots of
flooding photos believe it or not that’s our inputs driver that’s going to drive
across that body of water to deliver our inputs he has a tower on the other side
that he’s using to spot to stay on the road to deliver our inputs that’s just
one of many of the photos of that challenging year there’s about three
slides in here that I could spend the whole time on and this is one that I
could just keep talking about my family farming operation but I’m going to move
on and talk about farm foundation because I imagine some of you aren’t
familiar with it and that is a perspective that I’ll be taking now too
our mission is to build trust and understanding at the intersections of
agriculture and society that’s a challenge today and we need to do that
through collaboration we are we believe we are uniquely positioned to do that
because of our multi stakeholder view one of our signature events and programs
is our roundtable which you may have heard of which is exactly that multi
stakeholders coming together to talk respectfully with each other about the
challenges and opportunities and how we can navigate it together we were we
believe the first AG think tank in the US but we have just repositioned
ourselves as a new breed of an accelerator trying to catalyze ideas
into action and one way one example of that is we helped stand up the soil
health institute it’s sprung out of some of the work that we were doing and
that’s just one example over time we saw ourselves creating more
action and that’s where we want to play is really catalyzing those ideas into
action I do want to take a moment to highlight our next-generation programs
and again we’re trying to build them out in a suite of next-generation programs
to mirror our multi-stakeholder approach and our cultivators is our undergraduate
program AG scholars is our postgraduate program and I’m going to embarrass them
also and have them raise their hands where you are in the audience right now
over there in that corner this is our partnership as the secretary mentioned
with yes ers there graduate students please take
the opportunity to get to know them they’re an awesome group of students
we’re happy to have them as our first ever AG Scholar class but as I said
we’re building out a suite we have congressional fellow programs where we
bring them on farm help them understand the different types of farming
operations we’re just launching our young farmers program and a young
agri-food leaders program so later I’ll talk about if you have ideas of people
you’d like to nominate for those we’d like to let you know how you can do that
so we’re really proud of that this is the future and why we have innovation is
for the next generation on our farm and for the leaders in Ag so now I’d like to
change gears and talk about if innovation is the solution what are the
problems we’re trying to fix on farm and to share with you what some of those
challenges are as I see them as a farmer and I came up with this because in our
farming operation and others there’s problems we talk about and there’s
problems we don’t talk about and that’s probably like any other family that
there are things you just don’t talk about and I thought I’d differentiate
those here and I tried to do them all so by the size of the bubbles so in our
family every day we talk about the weather in fact last night at dinner
someone remarked that I talked about the weather five times during dinner I can’t
help it I’m a farmer so that bubble as you see is very big we talk about the
weather we talk about our production and how it’s going and what we’re doing and
the cool techniques were using we talk about the markets a lot so those three
bubbles are the dominant bubbles there we also talk about the challenges with
labor shortage of Labor or the cost of labor the economics and financials is
also big that one probably should have been dominant to and increasingly we’re
talking about consumers and what consumers are wanting and how that
affects us and what we’re growing the demand side of our business but what we
think about and don’t as often talked about is our family and our legacy and
concerns about is the next generation going to take over the farm 70% of farms
in America couldn’t change hands in the next 10 to 20 years and there’s a lot of
concern because there’s not clarity on whether there will be a next generation
in every operation to take over so that is a key issue even though we’re not
talking about it as much we need to also solve
for that health healthcare mental health that one’s a big deal
and we don’t talk about that as much rural communities and increasingly some
concern about lawsuits from the regulatory and legal environment we live
in so as I think about that and tried to convert it over to this innovation model
I tried to lay them out in the circle of all these challenges that we as farmers
are facing and I have to say I believe there’s no better time to be a farmer
and I need to say that even though I’m talking about the challenges I truly
believe there’s no better time to be a farmer than right now because of
innovation but as you lay out these problems here and you see them and I’ll
be talking a little bit more about how innovation is really focusing on only
about three of those in a big way we can debate this back and forth there is some
innovation going on and the others but we have to acknowledge that that’s
actually part of the reason why adoption isn’t happening as fast as a B C’s in
Silicon Valley and the startup companies might like because we’re trying to solve
for all these other problems at the same time so if we want to increase adoption
we have to address the suite of challenges that farmers are facing so
I’m going to be talking about what I consider innovation explosion because
that’s how it feels from the farmer perspective is this explosion of
innovation and first talk about the capital that is really fueling that
innovation on the chart on the left is one that I think is important and it’s
talking about how flat in fact I often talk about this chart just by going like
that that public spending in the US is has been flat and China’s has
skyrocketed and is in fact 2x what the u.s. is right now and VC capital and
private capital has really stepped in to fill the gap and there’s very different
you know they’re very different types of funding but what you’ll see especially
on the technology explosion is that that has really been driven by the private
capital and in fact private capital VC capital just in 2018 was about 17
billion dollars so we’re looking at 5 billion 10 billion for the public
spending 17 billion just for the venture capital in about 1,500 deals so
it’s an explosion and we’re feeling that on the farm and this map even though you
can’t read it is to make that impact this is the explosion this group
actually if you don’t know these maps I encourage you to check them out they
have a full suite of them this is just on one element of digitization but they
do them for animal protein they don’t for indoor technology but you know from
a farmer perspective we are getting pitched all of these different
technologies all the time and I’ve just circled the one box there in terms of
data management systems because from our farm for example we adopted one of those
technologies early on we are early adopters on our farm and then the
challenges as that technology continues to evolve and there may be better
systems out there it’s really difficult for us first to find the time to
benchmark them and see is it really time to switch the switching costs are huge
for us to switch over all of our data over there and I think it’s really
important as we talk about wanting to accelerate adoption to really understand
that suite of challenges and how the farmer is trying to you know sort
through all of these different innovations it’s exciting and it’s it’s
wonderful and that is part of our future but it is a challenge to sift through
all of that so in terms of adoption rates I mentioned everybody wants to any
of you see in any startup wants to scale quickly the hockey stick curve is what
is known for that in terms of scaling quickly and often they’re concerned or
frustrated that the adoption isn’t going as fast as they might like having said
that adoption rates are going fairly well it varies from the different type
of technology but the point of these graphs is to show that that adoption is
going rapidly in some areas adoption data is really difficult to get good
adoption data so it really varies but you’ll see that for like the GPS
technology that’s probably leading and some estimates go up to that 80% for
some of them but as you saw secretary Purdue mentioned maybe more in that 60
percent range if you look at the full suite but the headline is it’s
increasing at a rapid rate so what I’d like to do
now is take three case examples from different types of farming operations to
share the type of technology and the problem that is trying to solve on row
crops we’ve talked a little bit more about that already so I’ll do a little
lighter touch there but precision AG is clearly the key thing that’s happening
in real crops being adopted well and really focusing on the problem of
efficiency and effectiveness so that and digitisation is going on
well the newer ones with biologicals I think that’s going to be a growth area
where we see that adoption curve increasing as well as some really
important breeding going on for drought and flight I’m exciting to hear
especially in Nebraska that there’s some seeds that can survive longer under
water those are the kinds of things that are needed for adapting to climate
change I was going to do a separate section on organic and conventional but
what I decided to do was integrate it here in the row crop section with one of
farm foundations board members who’s an organic producer who’s adopting some of
the same technology that we’re adopting on our farm and to show that different
farming systems can adopt that same technology I won’t read the entire quote
but I in general I think it’s important to hear directly from farmers and not
speak on their behalf which is why I put the full quote up there but I’ll try to
focus on the second half he’s a New York organic producer that’s basically
dealing with sloped land having a lot of erosion and so if we just read that last
portion together he says we use our TK GPS to keep strip boundaries exact the
near perfect spacing allows us to manage crops without weed issues our camera
guidance systems work precisely so that we can use finger readers to remove weed
seedlings from within the narrow rows these technologies enable us to work
much faster and effectively so overall I think in real crops that’s the core
problem that has been the primary focus of innovation is that effectiveness and
efficiency apart if we turn our attention to California and look at the
issues there some of them are similar but some are a little different
a different priority that being for example labor and resource management
and water issues and so similarly I went to one of our board members who’s a
producer in California and I think I’m actually going to read this whole quote
because there’s lots of important stuff here I think to unpack so he says in
California the rapidly rising minimum wage rates and work our limitations
create a non competitive disadvantage for producers in a marketplace that is
not adjusting upward for the added labor costs we are replaceable suppliers of
fruits and vegetables regardless of our locally grown promotions so we are
looking to mechanized harvest as the only remaining option to remain
competitive due to our labor costs so this is something that is a challenge in
terms of the lag and what consumers say they value and what they’re willing to
pay for and that is again a challenge that we have to face in terms of the
innovation is it costs us as farmers and producers and our whole value chain to
integrate some of these things and if the consumers don’t pay for it who’s
gonna pay for it so that is something we also need to keep keep striving towards
but this California producer said you know he’s been looking at robotics and
mechanization but really was trying to employ people but he’s at the tipping
point now where he’s getting ready to move over towards rapid integration of
mechanization and potentially robotics because of the labor situation there the
last case I want to share is indoor agriculture and it was hard to choose
which examples to share the reason why I wanted to share this one is this notion
of is it a threat or an opportunity and if you look at it in the most broadest
sense of indoor agriculture taking animal production indoors it’s all about
controlled environments but what we see is some innovative options with
aquaculture and with some new regenerative indoor models that are
being positioned as opportunities for rural America and potentially the next
generation farmers of if a farming operation needs to make space for their
next generation there may not be economic space in the
current business model for the next generation of kids and they need to
think of something additional that the kids can do in their business model and
I think it’s intriguing to think if some of these can be that for the next
generation so I share that for that purpose so into
the section of is innovation the solution or one of the challenges I
think it’s both from the farm level and as a sector and like from a business and
economic standpoint I think innovation is the disrupter actually and McKenzie
in about 2015 did a study where they ranked about 40 different industries and
had agriculture at the bottom for its digitization and so it was ripe for
disruption and I think what we’ve seen from a lot of the private capital
flowing in there is that disruption I think we we hit those five variables
there in terms of that disruptive nature that’s going on across agriculture and I
think I’ve shared with you we’re feeling that on the farm I think it’s an
important disruption for us to get to the next generation of agriculture but I
also think it’s important to acknowledge that it’s a disruption as well as an
opportunity so this slide is also hopefully will engage us in some
conversation after this presentation what I see from my perspective is that
we’ve had we’re shifting into a new era of agriculture you know the first photo
I showed in my family’s farming operation that was like the labor area
era and for decades and decades and centuries it was the labor era as
secretary Perdue shared this morning we’ve gone through a big revolution
already with the industrialization of a guerrilla getting to scale economies and
efficiencies to be able to feed the world in a very efficient and low-cost
way but partly because of digital digitization and the innovation and
partly because of the consolidation that I think is going to be happening and
already is from the farm perspective and a business model perspective I think the
opportunity is to shift to a value based business model for farms farms in
general capture only about 10% ten cents on the dollar I think the
opportunity and I’m already seeing it is for farmers to either do some of the
value-added aspects in the value chain on their farming operation to capture
more of that value or to monetize some of the other aspects of their farming
operation whether that be the data the carbon maybe in the future I just see
this as a shift that’s going on right now to think about what other business
models because can we as farmers have to capture more of that value I think it’s
bumpy this transformation always is bumpy whether it’s from the disruption
of digitization or this this transfer that I see going on in business models
and I think we collectively because all of this matters to us as a society we
need to think about how can we help navigate this transformation through
collaboration to solve some of those other problems or to ease that
transformation and what is each of our role in doing that this has already been
mentioned several times so I won’t belabor it but I do believe that for
centuries farmers have been innovators and co-creators if you don’t know these
New York Times articles about the DNA and the discoveries they’re making there
I encourage you to check out that article so I have a couple slides just
to close out and if we want to deal with these in the Q&A section or offline
happy to do that but I’d encourage us to think through how we can collaborate for
this transformation so what role do we see for farmers and rural communities in
our future I’ve said in a provocative way we have the technology to eliminate
farmers maybe fifty a hundred years from now is that what we want or not and I
think we have to be thoughtful about that second can we partner with farmers
to navigate to this era of disruption and transformation and how and third how
can we innovate to solve some of those other challenges in the wheel of
challenges that I shared with you and how can we collaborate to do that last
I’d close by inviting you to collaborate with us at farm foundation there’s so
many ways that we can collaborate and I’ve just named a few here we have forms
at the National Press Club monthly our upcoming one in March is on gene editing
so you’re welcome to join us for any of our forums there
also audio cats so you don’t have to be present we have two upcoming workshops
that tap into this innovation concept we have a digital AG one and a beginning
farmers workshop in the fall would love to have you join us there I already
mentioned on the next-gen programs would love to get your submissions for who you
think would be great to help us build out a diverse set of candidates there we
are in the midst of repositioning and looking ahead to our 90th and hundredth
anniversary as a farm foundation and really crafting those big bold ideas so
if you have ideas that we could collaborate and now is the time for that
type of input to Farm Foundation and last please say hello to our AG scholars
throughout the couple of days here and see what you can learn from each other
our vision is building a future for farmers our communities and our world
and I think innovation is a core part of that so I encourage you to continue the
conversation with us through our social media venues and look forward to the Q&A
next thank you well thank you very much to all of our
panelists that was an excellent discussion and we do have an opportunity
here to take questions from the audience we’ve received quite a few questions so
very very exciting talks from all of you all and generated a lot of conversation
here the first question that we have comes from the audience can we expect
the explosive growth of precision agriculture in the past decade to
continue at the same rate and when does this growth level off I’ll put it up to
maybe you Jeff well maybe not exactly Mary of expertise but we we’ve learned a
lot about a we’ve you know I grew up on a farm so I’m watching farming for my
entire 54 years on the planet but I have seen tremendous progress in agriculture
I’ve seen very steady trends in agriculture if you look at yields they
have been very very consistent over all the way back to 1900 when we started
keeping track and if I were a bed at betting man I like to look at past to
look to go to the future I think that we can continue to see significant
innovation I mean people said we would stop seeing
yield increases years ago and I remember about 25 years ago when the yield
contest was 300 bushel per acre and everybody said there’s no way we’ll hit
300 bushel per acre and there’s probably people whose room that hit 300 bushel
per acre I don’t you know and that’s certainly a peak but if people are
getting there so last year’s yield contest on yield was 534 bushels per
acre so you can see that we’re continuing to trend upward yields
they’re not going to kind of stop and that’s going to take innovation but I
think it will continue I would I would add that I I think it
will continue one of the concerns I have about the importance of rural
connectivity in in all of our rural areas is are we stifling the innovation
that may be occurring whether it’s for sensors or you know facility livestock
facilities and integrating technology into those those areas I worry that
because we don’t have the the ubiquitous kind of accessibility and connectivity
are we you know the the folks like John talked about this
morning that want to innovate they want to find ways to develop new technology
are we stifling that for agriculture because of that and I think I think
sherry you know made a point toward the end they’re looking for value one of the
things that in my mind technology can do is help farmers it’s it’s great to be
able to produce but if we know and understand our inputs and and take the
technology to help us understand how to be more not only more productive but
maybe more importantly how to be more profitable that will allow us then to
continue to make sure that our rural communities and our farms are
sustainable I was just gonna add I think the rate of adoption depends partly on
the changing of generations on farms as I mentioned the 70% of farms changing
hand so I think how quickly that changes will potentially affect the adoption
curve well that dovetails right into the to the next question that we had here
and that talks about are we getting the the cart before the horse somewhat on
the innovation front when we think about the the inability for many farmers and
ranchers across the country to not be able to access the broadband speeds that
they need to fully adopt some of these innovative new technologies
Bruce you covered it but anyone else feel a weigh in on that particular
question do you just have to have broadband to continue so the faster we
can get that out there the faster that adoption curve well it’s a must have
it’s a good question I think it’s a function of identifying what are some
foundational things that have to happen to allow technology to scale one of the
things I’ve seen over the course of my career is you can do these proof of
concepts of pilots and they work and I tell people these days I’m less
interested in doing a proof-of-concept or pilot I’m interested in working on
what are the we have to take or the levers we have to
pull for these technologies to scale having broadband access is one I would
say in some regards for things that we want to do it’s about adopting a
universal standard common language so we can speak to each other
digitally based on a common set of standards and so I think we have to take
a step back and say there’s probably a sequence of how we approach these
technologies of the thickened scale I would add you know I mentioned in the
beginning of my remarks the word imperative for the dis conferences is
really I think pretty critical to go back to that quality of life you know
we’ve got young people that if we don’t figure out how to have the technology
have Wi-Fi John mentioned this morning about kids didn’t care about the
electricity being off the Wi-Fi goes away and you know the world stops but
that’s also important to be able to bring those young people back not only
to the farm but to be able to bring them back to our rural communities and have
that vitality because if we if we don’t have the communities and the businesses
that are there to support our farmers then again we stifle their their
productivity and the ability for them to be able to be sustainable I think we
hear that time and time again access to broadband access to health care is also
pretty cool pretty critically important the next question we have from the
audience really follows up from the Secretary’s remarks this morning
we have 30 years to achieve our 2050 goals what innovations make the most
sense to prioritize and collaborate towards what practices create impact
quickly I the example I gave was digits as a nation I think being able to
actually analyze these large sums of data that’s collected and figure out
what are the questions we need to ask questions we didn’t know and make
connections that we didn’t previously know where possible are important I’d
like to use the example how many of you have heard of the UPS know left hand
turn strategy honey you know what they did is they started digitizing their
fleet of trucks and as they started to digitize that they were collecting it
from and winter trucks standing hiding what
are the routes that they take how much gas are they burning how much time does
it take to make to the final destination and by having digital data they analyzed
information that they always had they just couldn’t ever consume and they’ve
realized that when their trucks were making left-hand turns that tend to be
idling a little bit longer it took them a little bit longer and they came up
with this no left-hand turn policy don’t make a left-hand turn would rather you
make three right-hand turns to get to your final destination saved it a ton of
time and it’s saved in the tum a ton of money I share that because I think there
are a lot of left-hand turns in our food production systems and what are the
left-hand turns that we simply just don’t know once we start digitizing and
analyzing data will we be able to eliminate those left-hand turns innovative practices because I think
often we think of innovation as technology but I think innovative
practices business models and collaborations are also important so
take cover crops and no-till as innovative practices they’re the
adoption is pretty low even though they’re doubling each year so I think we
need to keep figuring out how to improve that adoption curve because I think as
the secretary said soil health is fundamental for our future so that would
be on practices on collaboration I think unlikely partnerships are a key to
getting to our future of trying to be able to collaborate with people that you
wouldn’t normally collaborate with especially in our polarized society
right now and then in terms of innovative business models I think
that’s another one I’ve mentioned a little bit in my talk that that we need
to think about that for farming operations and help them see alternative
innovative business models I agree completely Jim innovation and
sustainability I believe are gonna take investment obviously it takes it takes
money right and all these technologies take money so I think we need to
remember the farmer needs to be profitable I was at an interesting deal
laughter we did we did some strategic planning for agriculture with a whole
bunch of CEOs from all over all over agriculture and everybody knew had great
ideas I got to remember the farmers got to be profitable to move this stuff
forward and so I think we need that once again remember that this probably sounds
self-serving but we need to make sure there’s enough demand for the farmer so
he can be profitable my father built an ethanol plant on his farm when I was a
teenager because there wasn’t enough to man for his corn and he was storing five
years of corn and Qantas and big grain bins there was nowhere to go with it so
we continued to grow more and more and more we’ve got to you we’ve got to make
sure we have biofuels policies bio products being invented other things we
make from grain so that we can keep the farmer profitable as those yields
continue to go up so we can finance sustainability I think that hits exactly
on what Sherry’s talking about economic profitability is very important but we
need to find other partners other collaborators down the supply chain and
I think communicate how important economic sustainability is for the
farmers to drive this this innovation we can make biofuels out of $2 corn but but
we want the family farmer healthy we believe the family farmer is critical to
America appreciate that collaboration because it’s been mentioned a few times
and I’m a strong believer that it needs to happen but often times collaborations
don’t take off people don’t want to work together and one of the things that we
need to think about when we talk about collaboration is we need to collaborate
in a way that creates shared value i’ve actually participated in some of these
digital networks where you try to get people to get get in but you know one
entity benefits more than the other sometimes it’s a large retailer for
example you have to create shared value for all the participants in that network
so as we think about collaboration think about well everybody needs to get a win
out of participation well I think the average US consumer spends about 5% of
their income on food here in the United States and you talk about other partners
along the supply chain to get this jump-started who’s going to bear the
cost of tracing issues for example Frank yeah well
oftentimes people think there’s going to be a cost to traceability
one of the things I worked for a large discount retailer I would tell you that
large discount retailers aren’t looking at these type of digital supply chains
that they think they’re adding cost of the food system we believe that long
term by digitizing the food system you run a more efficient sustainable food
system you subtract costs from the food system and I think you can create
economic models for people to get in that are little to no cost you think
about all the social media networks that you participate in you’re probably on
Twitter you’re probably on LinkedIn you’re probably on Facebook how many of
you pay a cent to be in it you don’t pay a cent they figured out models economic
models to incentivize creation of those networks of people to get in so we have
to be creative and how we think about this oftentimes people think I just want
to sell you a subscription service and try to make money I’m convinced that we
can digitize the food system with new economic models that are a little more
no cost in the long run and in the short run that’s what the challenge is is all
of this digitization on our farm we’re at our capacity right now we can’t do
anything more right now unless we hire more people in terms of managing our
data and so I think we have to be thoughtful about how can we get over
this short term costs on farm and in the supply chain to get to that in the long
run it will be better fantastic anyone else well the next
question we have here the the focus on innovation initiatives are clearly
critical however we haven’t heard too much about economic sustainability
profitability growth we talked about it a little bit but from each of your
perspectives how important is that for the u.s. farmer other agribusiness is
along the supply chain to make sure that we’ve got economic sustainability how
much of a component of your messaging is that it’s I think it’s critical I lived
through the farm crisis of the 1980s I watched my several my neighbors go
bankrupt and lose their farms and the families that are kids
I knew and we don’t want to see that again and I worry we’re on the we’re on
the verge of something like that you know certainly there have been some some
government payouts but if they ever stopped its we’re not in a good position
and again we’ve got to build demand we all got to fight together for a demand
so we’re fighting all the time against the oil industry to get more of the gas
tank sometimes we feel a bit like the lone soldier when it impacts all of
Agriculture and we would we would like to have more help in that and that venue
they if you look at these the smaller finer exemptions that were really hard
on egg demand that would we’d have different prices today we’d have a
different world today so anything we can do to work together to make sure that
the opponent gives us part of the gas tank cuz they don’t want to give any of
that up guys not even one gallon they don’t want to give up in fact they want
to go the other direction and take market away from them farmers so egg and
oil are in this battle and I don’t think that AG knows are in it but oil is well
aware they’re battling all of you I’m not sure all of you know you’re battling
oil to try to get your prices up sustainability to me it really comes
down if farmers if farmers aren’t profitable and aren’t able to be
profitable nothing’s gonna be sustainable we have all these
definitions I kind of referred to it earlier and I know you know we have
corporate corporations that have their sustainability efforts I get that one of
the things we’re doing in our department is we’ve actually had some conversations
with some of these companies that want to talk about sustainability because
they’ve looked at some of that soil conservation data from the partnership
and and have started to realize there there is some value there and so is
there a way to be able to to help with that we I continually emphasize anytime
we have those conversations if farmers aren’t able to be profitable they’re not
going to be sustainable and your sustainability efforts aren’t going to
have and aren’t going to accomplish what you want to accomplish so we’ve got to
remember it starts at the farm in terms of being able to make them profitable
and allow them to have markets to be able to make that work and if we don’t
have that then ultimately the corporate or a sustainability goal is
not going to work it’s not going to have any value I’m certain there’s a
willingness to pay for consumers for these things it’s it’s likely a matter
of making sure that we get our voice out there so they understand how important
economic sustainability is for the farmer today the the secretary announced
the AG innovation agenda which includes the goal of increasing agricultural
productivity by 40% and reducing our environmental footprint by 50% by 2050
what’s your reaction to this challenge and the framing by the secretary today I
thought it was great very encouraged by the vision you know I think people get
inspired by visions more than they do policies and regulations and standards
and so it’s imperative it’s needed and I think it’s achievable
it’s a daunting goal but we should be ambitious and I think there’s
technologies on the horizon that if we work together we can do this more
importantly we have to do this agreed I as he was talking about that I was
thinking of an example we have in our state we’ve got a group called the
Wabash heartland innovation network it’s about an 8 or 10 County area centered
around Lafayette West Lafayette so they’ve involved Purdue University
College of Ag engineering and what they’re really what it is is a large
testbed so they’re trying to gather technology from all kinds of providers
they’re working at it on the farm they’re working at it in the
manufacturing sector they’re looking at from a research perspective and that’s
what what it’s going to take is those all of those sectors working together to
be able to achieve the kind of goal that the USDA’s laid out I again it’s it’s
it’s huge its large we probably can’t exactly see how we’re going to get there
today but that’s part of what you have to do to be able to to think forward and
move the industry forward exactly I thought it was exciting to have part of
the vision beyond the environment in the plan
my hope is that we can talk more openly about it I felt like in my role I’ve had
to have my cheat sheet of which terminology I had to use where is it
changing changing extreme weather or is it climate change and I’m hoping we can
just get over that and move to these metrics and the scorecard and just work
together to get there so I thought that was exciting the next question we have
here one thing the secretary spent a lot of time talking about this morning is
the past success of American agriculture most folks who work in US Agriculture
agree that we need to do a much better job telling our story what are your
thoughts on how we in both the private and public sector can better tell this
story to consumers volunteers I think we need to unite I think that I mentioned
this when I was speaking that egg does not get done a great job of uniting but
if we can get egg companies biofuel producers farmers commodity
organizations and probably also about some environmental organizations have
not been our friends AG supporters I mentioned pantego Nia Culver is their
really excited about a sustainable AG agenda they are they will invest money
that they’ll help us to tell the story we got to get everybody singing from the
same song sheet it’s amazing what happens when nobody cares who gets
credit and everybody does their best to tell the same message so that’s what I
think this in agriculture has got to do I’ve never in my lifetime seen that
happen where agriculture came together on United message if they did this is
the largest industry in America and largest industry in the world they’d
have tremendous power if we ever did that I think it’s important you know one
of the things I’ve often thought about the farming community if you rewind a
hundred years ago a lot of people would have been in some
way shape or form involved in food production and you fast forward a
hundred years and just about nobody’s involved in food production and it’s
farmers so you have a smaller amount of people producing more food to feed more
folks than ever before that a very far removed from farming and while they’re
very far removed from farming they all have an opinion about how you do your
work and so I think storytelling is really important not only in terms
success and great you know innovations that have happened but I think also
continue to educate consumers I think consumer education about AG is really
really critical it’s a big missing part of the food conversation a little more
broadly I think telling our story is part of it but not all of it we already
see this going on where you know we say it’s all about science and then you know
if we’re at my cross purposes of what matters to each other and just telling
our stories I don’t think is enough I think we have to spend time building
trust and understanding as our mission statement says listening to each other
to understand the perspectives before we can actually achieve change it’s more
than just telling our stories that’s part of it though one one organization
that’s really working hard on this is us farmers and ranchers alliance we did
that treaty planning last year 180 CEOs from all over agriculture including
aggrevation all the people I just listed here were there and we did Steve’s plan
for two days and came to unified approach for Ag which I’ve never seen in
my lifetime as well and that’s somebody you should all consider joining getting
to know them we’re known that we’re joined their board because we think they
have a really great mission to tell this story someone’s got to take the lead
right and then and then we got to get a unified vision which they have already
and then we all have to start seeing that same song sheet so that is one
organization I think is doing a fantastic job of trying to do what needs
to be done I think Frank Frank said oh well we know that there aren’t very many
people really when you look at it especially in this country that are
involved directly in production agriculture so it is incumbent upon all
of the rest of us that are involved in being able to help tell the story and
and show that I know for myself I try to do that when I’m out in fact I just had
a conversation earlier this week with my communications folks and said we’re
going to start to change a little bit of what we do and the events we go to and
the events we attend and what that really the gist of what I was trying to
get to is we’ve got to be able to tell this story and and help people
understand so that may mean I’ve got to maybe get out of my comfort zone and get
some of the the groups that that may not be real comfortable or I’m not
comfortable getting in front of but I think it is imperative upon all of us to
take our little part and try to do that and I know my counterparts in all the
states across the country they’re willing to do it and and they like doing
it and we know that we have to help let me just say it’s so critical and I
agreed your comment about it’s not only telling the story it’s about engaging in
a larger food conversation with all stakeholders we’ve talked about the
promise of innovation and technologies but we got to have the social licence to
use them and so that’s why this conversation is so critical one story I
had dinner with one of our egg scholars last night and she attended our
roundtable event and it’s off the record multi-stakeholders and she said that it
just exceeded her expectations to see very differing views that respectfully
engaged to try to understand each other’s perspectives in order to try to
craft some solutions and that’s what I think we need more of which is why I’m
saying it’s beyond storytelling it’s partly storytelling but that really
having these candid off-the-record conversations to try to craft these shit
to your point shared value propositions together we can’t get there without that
kind of dialogue I think back to Jeff’s point what USF ra has tried to do with
creating the hive and bringing all the the supply chain partners together to
talk and share a story is a key component of that they’re also raising
real money I mean it’s not free and and they’ve got people there that have money
and so you won’t tell this story free it’s gonna take investment but look how
big AG is if we all give a little we can tell the story that’s exactly right
switching gears a little bit and I think maybe this one
sherry might be right along your lines since you’re a farmer how do you view
the the right to repair movement effecting innovation on the farm and in
Ag technology again I think we have to engage in
dialogue on that as well I have to be careful with my my farm foundation hat
in my personal hat so I probably may be able op the ball back to someone else
here I agree I think I think we’ve got to figure out where the balance is on
that you know as younger people come into into farming in particular they’re
gonna have a very different view on that they want to be able to use the
technology and have access to it and so I think I understand wanting to be able
to own the data and the information and figure out you know am I able to touch
that or do something with it so it really continues to be it goes back
where is the shared I think sure she mentioned it well it’s shared value
there’s a value on both sides of that so somewhere we can try to figure out how
to come together in the middle to make it work we’ve got about 15 more minutes
or so here of questions I think here we have one for you on on Franklin what
would you estimate is the value to digitizing the food system well I don’t
know that I come up with the statistic or of proposition I’ve seen some
cost-benefit analysis about digitizing food and there being a return on
investment certainly just on traceability alone because some it’s
certainly with some commodities you’ve seen these large food scares that has
resulted in you know the livelihoods of all farmers that commodity being damaged
and if you were able to pinpoint it and trace back that contamination to just a
grower it would have saved in literally hundreds and millions of dollars if not
more but we’ll have to do those I think we have to do the cost-benefit analysis
and figure out you know are these technologies scalable I think for a lot
of the use cases they’re important I always start off with what not the
technology but what’s the business problem or the public health challenge
that we’re trying to solve and then do the math to see if adopting these
technologies has a return on that’s been in many cases I think it
will anyone else I think this is a fantastic question how can we ensure
that we’re innovating responsibly specifically being sensitive to job
changes due to automation and the expense of new technology to small farms
I think I’ll go back to my example I used to the importance of Ag education
at starting at the school level and being able to help those folks those
young people one understand the opportunity that this industry has it’s
it’s phenomenal it’s tremendous there’s just unjust can’t imagine the
amount of opportunity that there is but being able to help them understand that
they can’t just necessarily train for a specific role and job that they’ll have
forever in their career they have to learn the skills that it will allow them
to adapt and to be able to change it may have to change numerous times but if you
understand that early on and I think again I’ll go back to what Agri Novus
Indiana is doing they’re trying to help people understand there’s a lot of
opportunity here and you may be you know you may be an have to have some skills
and engineering you may have to have some some skills and agronomy but be
able to be flexible and and not just pigeonhole yourself into one area is
important that’s that’s gonna be so critical for the future because we all
know it’s going to it’s going to change very rapidly I’m often concerned about
that I was concerned about it then my prior employer I’m concerned about it it
might in my current role with the federal government we just number one
have to be mindful we cannot do this in a way that creates what I refer to as a
digital divide the big players can do this and the small farmers cannot I’m
absolutely persuaded that if we do this the right way it actually provides
incentives for small growers and they can participate what we’re talking about
is digitally connected ecosystem the food system that I at the end of the day
I’m convinced will result in some disintermediation
gets people nervous disintermediation but I actually think that might be good
for small growers if you look at what’s happened in developing economies around
the world and when farmers get access to some of these tools you know you’ve seen
some of these reports when farmers got access to a mobile phone what happened
sales increased and I think they will potentially be able to be linked with
buyers they can compete with some of the larger brick-and-mortar entities and so
I think if we do this in a way and it helps level the playing field I think we
need to kind of months ago for your comments anybody think we need to teach
more morals and ethics than our school systems both both probably elementary
high school and even college education it’s and not just in agriculture I know
I think there’s an awful there’s a lot of lack of morals and ethics sometimes
and a lot of different areas of society that I see and I think some people just
don’t understand that it’s a human responsibility to do the right thing I
really believe in doing the right thing and dedicated my life to that but I meet
a lot of people that don’t so I think if we could teach more of in our school
systems than why it’s the right thing and why it’s a good thing and and how it
helps the next generation I think you could maybe gain on it comment about
about smaller farms again there’s tremendous opportunity one of the things
that Frank talked about when we think about the Food Safety Modernization Act
when that came out a lot of people and I think Frank knows is a lot of people in
that in that part of the the production change they were very very worried they
were very scared that again the big big arm of government was going to come down
upon them we’ve got a person in our department through our State Department
of Health through work with funds through FDA we’re starting to go to the
small and medium sized we don’t have a lot of the huge produce farms that say
the West does or whatever but we’re specifically going through education
with these folks about looking at what the Food Safety Modernization Act could
do to benefit them and the conversations that that are the person that’s working
on this is having with some of these folks
I just had a conversation about two weeks ago with her she said it’s been
great because a lot of these folks have understood that this does not need to be
onerous and it but it can in fact be very beneficial to their business and
and Frank and I were talking earlier you know it doesn’t matter what size
business you make somebody’s sick with their food and that’s not a good day and
I think even small farms understand whether it’s at farmer’s markets or if
they’re selling from their farm you’ve got to be able to produce a safe product
that people are going to enjoy well I think you all have brought very
interesting and unique perspectives on AG innovation certainly helped inform my
my thinking I appreciate the opportunity to visit with all of you today on stage
and I’m sure our audience does as well so please join me and given the
panelists a round of applause you

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