WASHINGTON (DTN) -- Agriculture Secretary Tom Vilsack has a small anecdote to share for the incoming Trump administration's plans to cut as much as $2 trillion from the federal budget.
Watch how Congress actually responds to the spending cuts.
Vilsack talked about budget challenges in an interview with DTN earlier this month. The secretary will end his tenure as the second-longest serving agriculture secretary in history when the Biden administration ends.
During Vilsack's first term in the Obama administration, USDA had plans to close as many as 250 of the 2,300 local Farm Service Agency (FSA) offices nationally. The plan actually was scaled back from an earlier Bush administration proposal in 2005 that detailed eliminating more than 700 FSA offices. Nearly 20 years since the first plans, very few FSA offices have officially closed.
"This is why I sort of have to chuckle about all of this," Vilsack said.
"There are 250 or so offices within the FSA world that don't have anybody in them on a regular basis. This is not a telework issue. This means there's nobody there. Occasionally somebody stops by and gets the mail, and it's dropped off in the mail slot," Vilsack said.
Once at a U.S. Senate hearing in 2010, former Sen. Mark Pryor, D-Ark., vehemently complained about FSA office closures, holding up a map of his state for Vilsack showing that farmers would have to drive 10 to 15 miles farther for services if USDA closed one particular office. Since then, Congress has included a provision in every USDA budget bill that blocks the agriculture secretary from closing local FSA offices even though they are basically empty.
"So, my first suggestion would be, if you are serious about this, close those offices and see how Congress reacts to that," Vilsack said. "Because it's the same reaction when they don't fund NASS, and they cut NASS' budget, and they cut it late because we haven't had a budget on time since 1995."
CUTTING NASS REPORTS? SURELY YOU JEST
A small taste of what's to come happened just last spring when USDA's National Agricultural Statistics Service (NASS) announced the agency didn't have the funds for a few statistical reports this year. NASS canceled the July Cattle Inventory report, a cotton yield report and the county yield and production estimates for crops in 2024.
The reports were dropped because Congress had cut the NASS budget by roughly 11% -- $23.6 million -- while making that decision seven months into the fiscal year. The reports that were cut cost about $7.5 million.
Market watchers, including analysts and academics, lamented the loss of data from those reports. Farm groups complained about the impact on markets as well. Then 71 members of Congress, most of whom voted for the appropriations cuts, wrote Vilsack calling on him to reverse the decision to cancel the surveys.
Congress has set itself up for a similar scenario this year by once again pushing the 2025 fiscal-year appropriations into March.
MOST OF USDA SPENDING SPELLED OUT IN FARM BILL
USDA's total budget in FY 2024 was $228 billion, of which nearly 85%, or $192 billion, is "mandatory" spending spelled out in the farm bill. Of that, 71% goes to nutrition programs, mainly the Supplemental Nutrition Assistance Program (SNAP).
That left just under $37 billion for "discretionary" spending, where Congress each year decides what the funding levels will be. The two biggest line items in the discretionary budget are $7 billion for the Women and Infant Children (WIC) nutrition program and $4 billion annually for fighting wildfires. Then there are food safety inspections, and agricultural research, an area everyone agrees is underfunded.
"So, where are you going to cut? Then you go into the programmatic, mandatory program and you get into the conversation about SNAP. But they may find it's not easy to do that either because 80% of the people receiving SNAP are either people with disabilities, or senior citizens or people already in the workforce," he said.
EFFECIENCIES VS WORKLOAD
The heads of the new Department of Government Efficiency (DOGE), led by Elon Musk and Vivek Ramaswamy, are looking at how they want to make cuts in spending and squeeze more efficiency out of the federal government.
"That would assume we aren't focused on efficiencies today, which is not true. We are," Vilsack said.
He noted USDA staff are providing record volumes of loans at FSA while Natural Resources Conservation Service (NRCS) also have written a record number of conservation contracts with farmers.
"Then, you know what these people are saying, 'We don't think people are working very hard.' Well, they ought to look at the numbers. Somebody's doing that work, right?"
Vilsack pointed out that USDA has consolidated 1.6 million square feet in the past four years, saving $40 million in rental payments in the process.
"There could be some opportunities for joint locations out in the country as you are renegotiating leases," he said.
Because of Congressional tardiness passing budgets, Vilsack said USDA agencies have already been told to anticipate "a pretty tough budget," and identify what they can do without. That includes trimming travel costs such as attending conventions.
There may also be incentives to reduce staff costs through retirements and replace those veteran employees with younger people making less on the pay scale.
"There are circumstances and situations where a number of employees at USDA have been thinking about retirement. Well, if you sweeten the pot just a little bit, they can accelerate their retirement plans," Vilsack said. "Now, the sacrifice you make is you obviously lose a lot of that experience. So, there are things that can be done."
THE CCC DEBATE
Vilsack has been having a debate with Republicans in Congress about maintaining the agriculture secretary's authority to use the $30 billion Commodity Credit Corp. (CCC) when needed. The House version of the farm bill actually restricted the agriculture secretary's use of that fund, but the bill never became law. House Agriculture Committee Chairman Glenn "GT" Thompson, R-Pa., saw significant savings by cutting off the secretary's use. Vilsack said that's a mistake. "I've been saying that for two years. You need this tool."
He pointed to the $23 billion used under the first Trump administration during the trade war when commodity prices fell. "What actually saved them through that period? It was CCC payments."
The CCC is now being used to deal with a host of animal-health issues tied to some current challenges, including H5N1 in both dairy cows and poultry, fruit flies, screwworms in Mexico and African Swine Fever just outside the country as well.
"Those are five major challenges we have on our border or in our country impacting animal health -- major, major issues," Vilsack said.
The GOP-led Congress in 2025 is going to be less likely to limit the CCC under the Trump administration, but that is also going to complicate where Congress finds the funds to pass a farm bill.
See, "Ag Secretary Vilsack Said Agriculture Places Too Much Emphasis on Farm Bill," https://www.dtnpf.com/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
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