>> we don't incorporate the service and the cost estimates. we just offer the year by year for ten year cost and provide a summation. they understand the policies understand the traditional debt but it's hard to know how a particular policy will affect the service. we know it has its existing debt but to understand how it would be financed as the question and i don't think that including the extra whatever it would be ten, 15, 20% charge if you will what affect the fiscal policy. i think it is understood across the congress that there are debt service applications. >> it wouldn't necessarily be in the balance if you've included

the cost costs like in a situatn where i thought you had an immediate deficit increase in the first year here in the last three years or ten years, correct? >> one of my predecessors said a number of years ago in the context. i would like to use that line here. we think that there are important differences in the effeceffects of the policy beyoe ten year window. into the analysis on the climate legislation in the discussion over years ago. and in a few other cases we look at the ten year window because those are situations "inflated that have markedly different effects to raise the attention of the congress and in those cases the congress is particularly interested in the ten year window, but i do not think that in general the

cutting off the tenure changes much if we cut off any other thing in particular. >> you mentioned immigration and did a dynamic scoring figuring out how the labor what affect. do you expect within ten years they would be doing the dynamics more and more for taxes and spending? >> no i do not. we do -- we did 500 formal cost estimates. we get maybe ten times as many in the health proposals. and for 99% of those proposals that were made, there would be no macroeconomic effects. at the time that we have required to do the macroeconomic estimates would be basically paralyzed the work i of the congress on so many issues. i want to draw a real distinction between that set of estimates of most of the work that we do on a few pieces of

legislation would have the macroeconomic affect. so in the case where the goal of the legislation into the mind of many people and the reason that we opposed to it in the mind of so many other people is the community change in the size of the u.s. labor force. the cbo people thought a number of years ago when this came up that given that that was so integral to the legislation that pretended that there would be no change in the labor force, which i would be over standard assumption, it would be so much at variance of the issues the congress was confronting that we needed to reach beyond our formal approach. so, cbo did a number of years ago and we did it again last year a separate analysis beyond the normal cost estimates that looked at some of those macroeconomic sense advice on some occasionthaton some occasie congress were to have an overhaul of the overall u.s. tax code that would have us a significant macroeconomic effect that we would be happy to do the analysis of those economic effects as well.

i think those situations are correctly viewed as rare exceptions. exceptions. exceptions in the cases where it really matters. where the congress objections or the issues in the state are around the labor force or the economy. that isn't true for so much of what we do. >> to clarify or you saying along the lines of the immigration >> if the congress were interested in the economic effects of the tax reform and it's been done in the past some of the effects on the policy, for example, we do an analyst with almost every year of the economic president's budget. we normally release after the president's proposal a condition among our baseline economic

projections. projections. in an analogous to how we would do the cost estimates, and then we followed that up and put an economic analysis of the president's proposals ar to ende economic analysis incorporates the effect of the changes in the budget deficits and also the changes in the incentives into the other things. although they are separate pieces of the report and i think a good example is the case of the example after the basic budget analysis. so i have said this starting with the joint select committee some members were considering tax reform and they put forth a tax proposal that we would be happy to deal with the mlss of its economic effects. that would be separate from the basic estimates. actually most from the start and the joint committees of these are separate pieces of the report that we have offered and be case of the tax reform. >> the score would not have

those dynamic scoring. >> it would not have that. >> [inaudible] one is can you talk a little bit about the experience of the state that had expanded coverage and how that informs your in ... of the labor force participation in the report and secondly very quickly it's been a couple years since you've done the changing analysis of the hope insurance and have given the renewed interest among some one any plans to read access. there were not very many but particularly analogous to the affordable care act. so our estimates were aced mostly on the other circumstances.

one is phasing out of the subsidies insurance exchanges. it creates an implicit tax, and we estimate the effect of that and use the very large literature on the changes of the tax rates and how they have affected the labor supply. we did a review of the literature a year or two ago and wrote a set of papers explaining how we wrote the literature and the estimates from that. so we use the literature on the effects of the changes of the exchange subsidies. for the effect of the medicaid expansion of the affordable care act, which the literature looked at the states that had contracted in the past so that is some of the states have done it into the portable care act has done it and it is a larger set over time with a more robust

overture. on the second question, actually, one of the approaches to the deficit reduction that we analyzeweanalyzed theweanalyze , there were changes in the tax treatment of the health insurance. so, i would refer you to the report on it. >> if you don't mind, can you hook up a bit about in massachusetts obviously there's a number of things that was more limited how did that jive or not jive with the tax analogous of the subsidies to the labor force participation rate. >> to estimate the effect of the affordable care act of the labor markets we have to keep track of a lot of different channels. in the principle of providing health insurance subsidies to people in reducing the work is not something that is a novel idea on our part and we wrote about it in 2,009 in terms of the basic factors, but to do the quantitative element of the

channels which are one the best evidence that we could in these different sorts of channels and i think the effect of the medicaid expansion we estimate this separately in the subsidies these two literatures that he we drew on her distinct literature is and we drew the lesson from each of them that applies to the aspect of the affordable care act through which they were linked. >> could you update for me some statements that you made in the 2011 hearing about the role of uncertainty in the marketplace and its effect on the economy. that would be the federal policies of household and business spending and that uncertainty covers a whole set of policies and so what does the policy say do they change a bit and to what degree will they have on the waxing or waning from 2011? >> we think that the uncertainty of the federal policies have

weighed in on the recovery. but not any other analyst rating has been this successful but quantifying and i've spoken in the past that the uncertainty of the fiscal policy. policy. and also the uncertainty of the regulatory policy. in healthcare and in the financial system. and the environmental and energy regulation. i think of the certainty o on te federal fiscal policy is a little smaller today. damn it was in 2011. and the expiring tax cuts from 2001 to 2003 have been mostly extended and partly about to expire. so there is no cliff or deadline )-right-paren corner for that. the uncertainty about the appropriations seems to have been settled at least at the overall level. for this year and the next fiscal year the state economy is going to come back to that issue but there is some explicit plan

that has been agreed to. so, we think that those developments have reduced the uncertainty in the policy. they have not eliminated it. analysts can read in our studies and elsewhere the fact that the federal budget is on an unsustainable path so clearly the future adjustments of some sort will be needed to the taxes that we are spending or both. but i think the uncertainty is less than was because i couldn't quantify it before i can't really quantify it now. >> on balance? >> on balance there is less uncertainty. yes. we think that is a positive factor for the economy. >> i think there was a lot of relief on the budget deal in the two years of the spending numbers. just wondering there are some proposals and what are the pros

and cons of those? it would be helpful for us to know what our funding would be in presumably that infected the late affected people running the large potato parts of the government, so i think that having the room for the managers of the government operations have a little better sense of where their funding is going and it would be very useful. on the other hand, the congress takes advantage of the annual appropriations process. it sort of recalibrate the federal funds, taxpayers funds and put that on the autopilot on the individual agency and the function level than the congress that has flex ability. to play get back to it --

>> that makes another good point though that the question isn't so much what the official processes the question is how was the process action worked and if we went officially to the biannual budgeting and well into the fiscal year than having officially going to be the budget would make that much difference. i think it is both the process that matters had agreed that the process is. >> bthe analyzed the two different minimum wage levels and said they would introduce jobs. i'm curious in the proposal that's out there is it possible that we are missing a happy medium an and there is a minimum-wage type of base on what you know on the literature that you reviewed that would have a zero effect on the employment but still increase like $8, 850, i don't know.

>> there's other possible cases. i don't want to speculate too much, but i could just say there is no particular trick in the analysis that we are doing and what the economists have found on the wage increases. we estimate that if a minimum-wage were raised that the vast majority of people who would be affected by the increase would keep their jobs and receive higher wages, and by my estimates, the middle point of the estimates, something like 97 or 99% of the people that would be affected by the increased minimum wage would receive higher wages and incomes would be higher as a result. but at the same time, the 1% to 3%, people wouldn't be able to find employment. so i think as you move to the larger and larger increases in the minimum wage from zero up to going to $9 or 1010 or beyond that, you are likely to find progressively larger numbers of people who benefit from raising the wages in progressively larger reductions in the employment the assertions made

by democrats and those on the left after the report came out said your reports conclusions contradict the consensus among hundreds of america's top economists. do you disagree with that assertion and the second question, do you think that letter sent by the economist said that increases in the minimum wage of little to no effect on the employment or of minimum-wage workers flex using to think that your report kind of wind up with that assessment by the economists, do you think that a loss of 500,000 jobs would equal little to no negative impact on the unintended? >> i'm not going to speak directly to what the leader said i can only speak to our analysis anand as i said before, our analyst this is quite consistent with the latest thinking by a contest. what i noted about this letter

in the survey that i referred to is that the economists don't put numbers to their words, so it's hard to know exactly what the people meant by little to no effect and exactly what people meant in the survey by the noticeably harder to find a job. the higher estimate for the 9-dollar minimum wage. and how far into the reason for this edition of the cuts. cuts. our analysis on the proposal suggests that the decline in the employment would be between 2.5% and a slight increase. and i think it 2% decline many people would have a small decline in a slight increase would be consistent without no effect roughly. so, i don't think that one can tell from this statement in the letter, we cannot be sure exactly how the economists would

take the result. and i know that is not a representative sampling of the economies. so i don't think you can tell anything from that particular wording, nor does the wording agreed over time. what we have done for ourselves, we have a very careful reading of literature and we have put weight on a wide range of results. naturally the economists that put more weight than others would reach the conclusion, and some economists undoubtedly provide estimates of the employment be larger than they would pick themselves and other economists would find their estimate of the planet of the smaller and they would pick themselves. our job is to offer and provide ththe economy is a balanced meeting and we have done that. >> i would like -- i'm sorry, go ahead. >> i'm wondering if you can put a percentage to what the chance is that the impact on the unemployment can be far lower rate if they are say 100,000.

>> well, so the brains that we provided for the increase in the minimum wage to $10.10 is from a very slight decrease in employment to be civilian workers. and we say that we have constructed this range to capture as best as we can judge two thirds of the destitution of the possible outcomes. that means that there is in our judgment one sixth of a chance that the effect of raising the minimum wage to 1010 would be a bigger decline in the employment come and won six of one sixth e that raising the minimum wage to 110 would reduce or not reduce the employment at all. and about two thirds of a chance that infected with maybe make a slight decrease in about a million workers. >> does this surprise you at all or is this something that you expected? >> from much of the work that we do there is a range of actions

if we take a great pain in doing the analysis to read at a time and consult with people a wide range of views and if you look at the people that we left at the end of the documents we spoke about this work you will see from their own work they came to this question from a different set of views of what would happen. we understand there will be a range of actions among the professional analysts outside of the cbo and among the policymakers at the commentators outside of the cbo. it doesn't surprise us or have any effect on the work that we do. >> on the cbo score, you scored with a legislative language system implementation date etc.. is there anything that we should be thinking of that as an executive branch, the changes were some of the deadlines we have been seeing either for the individual market where employers that would make us want to reconsider or reevaluate the fiscal impact of the

affordable care act either short-term or long-term since the administration has been interested in saying that it's already in the cost curve in healthcare. >> as a part of the regular updates on the budget projections, we regulate the effect of the coverage provisions, insurance coverage provisions of the affordable care act. as a perfect process we do not update the effect of medicare changes were the revenue changes. because in those parts of the affordable care act, they made changethe changes to the large f existing law. and it's not possible at this point to really disentangle the effect of the affordable care act. in the medicare or over the three existing law and medicare would have been doing the projection as it stands in the affordable care act is not separate from the other parts of medicaid while. we are building a new superstructure on the rest of the federal law.

so the nature of doing the baseline projection regularly in this process of the effect of insurance coverage provisions. and there were example of the effects of those up and changed substantially since 2010. we've incorporated new in ... and a slew of changes what we expected in the way that the wall is implemented. and on balance our estimate of the budgetary effect of those provisions of the year by year basis is not much different at all than what we said four years ago. the ten year total that you will hear about changes because the ten-year budget window is now a number of years further into the future than it was when it was four years ago. but on a year-to-year basis of the various changes that was made by the administration and implementation as a result of the supreme court's decision and as a result of the development in the healthcare system and morhealth care system andmore as

all of the things on the left have not changed in the budgetary effect by much. the effect of the coverage for vision i don't know where that will come out and do something together in a few months. as for the effect of the affordable care act of the cost we said before and still believe that we don't know what effect those provisions are having. there is an extensive growing literature of economists analyzing the slowdown of the cost over the past dozen years or so. we did a report last summer about the slowdown in the medicaid spending growth and we looked at the effect actually before the affordable care act, so we looked at the effect of the business cycle which we found to be not detectable at the effect on any other sort of changes. over time they will study the question and how much the

affordable care act. there are a few specific channels of course that were brought down and the payments to medicare providers with the others that reduces federal author spending international healthcare spending to more into indirect effect the wall may be having on the private sector isn't something that we have any analysis to bring to bear. the economists are still thrashing around a little but about the issues related to the great depression and the 1930s so economists can look at things for a long time and have so much. the challenge for the affordable care act will be that some of the channels that affect healthcare spending are rather indirect so one can in a way that the effect of the medicare payment to the providers. but the extent to which the

spread of the accountable care organizations or the medicare penalties for the readmission of patients from hospitals to the hospitals attempt to bridge those those changes in the wall will spill over to help a healthcare is delivered under the medicare. there is a subtle connection and they will be hard to detect area that i expect that in a few years certainly you will see a clever research that will be trying to get at that. >> i just wanted to follow-up on the participation rate do you see that as happening mainly because of the demographic aging or is it a long-term diminishing of all age groups were younger workers and what are the implications of that since it seems to be that the fed has talked about 6.5% unemployment

is a threshold where they say that it likely will keep interest rates low for a lot longer than that may be because of the participation coming back, so by your analysts it is a message to the feds that we should start thinking about raising the rates sooner. it goes back to the last decade part of the decline in the rate that it has been in the aging population and part of the decline has been changes in the participation rates to being age groups. as we look ahead, we think that there will be some further decline in the distribution within some age groups about if not very much. we think that that affect is mostly waning. as we look ahead at most o of mt is going on over the decade is

aging the population. we have a large number of people living from the age most people work and that is visible in the federal budget into my cost for social security and medicaid and is in the labor force participation rate. but to emphasize, we also think that it has been pushed down by a cyclical weakness in the economy. if the demand for the workers was the stronger come if the demand for the product felt the need to hire more workers to stand up for the demand, then rethink the participation rate e think the participation rate would be a percentage point higher than it actually is today. so we think that there are nearly 3 million people who are out of the labor force will come back in if the demand for the workers with stronger and there are other people who were in the labor force but were unemployed and would go back to work and if the economy were stronger into those two pieces for about

6 million jobs short of where it would be for the participation rate where it would be without the weakness and if the unemployment rate for back down to the pre- recession level. it was a great deal left in the economy and how that influence to the federal reserve policymaking for somebody else to figure out what we are talking about. >> so then are you saying that your forecast in a way is predicting that that slack just would not be absorbed or -- >> we think that slack will diminish mostly between now and 2017. we think that the economy is strengthening, not up every week or every month, but we think that on balance, the economy is strengthening. and that will well push up the demand for workers, and bring down the unemployment rate and it will push up the labor force participation rate. you don't see that in the picture because that upward pressure is being more than

offset by the downward pressure from the demographics. >> kevin hall. >> they will take 2,000 jobs that we are goinbutwe are going. >> the question on the aca following up with my colleagues question, the urban institute and some others questioned it suggested that perhaps in the massachusetts experience, and i wonder how you might come how much they factored in since 1,000 data might be versus the world that was. but how do you manage that and in the world that you could do that all over again, would you feel about the aca part of the ten year outlook waten-year outr the money given the fact that we don't. we won't know for a while? is it helpful to ask

>> our response ability is to give congress or projections of what will happen in the economy under the current law. and one aspect of the great wall that infringes on the labor market is the affordable care act. so, we have no choice but to produce an analysis of how the affordable care act, and other features of the system and the transfer system will affect the labor market and those parts of the economy. that is our responsibly to them. it's also our responsibility to explain away analysis as truly as we can and we try to do that in the appendix to the outlook. ..

evidence from many, many analyses with respect to higher tax rates, only supply. a number of an else's effect contractions in many program. we butter emphasis on that broader, broader literature based on a broader set of experiments. >> with incorrect in suggesting the massachusetts experiment did not lead to net job losses? >> i think it's hard to know what the effects of the massachusetts health reform was on labor markets in massachusetts. i have not studied out myself

enough to speak clearly to it. labor markets are affected by lots of different things. so extracting the effect of any particular factor is difficult. we estimated a few years ago, and still think very strongly, that the american recovery act spurred employment and output relative to what otherwise would've happened in this country. but at the same time lots of other factors were affecting output and employment. >> did you think of is a tragedy to limit? >> we don't use words like that. [laughter] but you can't just look at a time series of u.s. employment and no from that how much the recovery act into the economy in more than you can look up from that time series with any other individual influence did to the economy. >> we have about 10 minutes left. eric and then chris before a second round. >> five years out how would you

compare projections for the stimulus that you and others thought tempered what actually happened, talking jobs and deficits? also baby, would you be able to serve a not the term? >> on the first question, there've been a number of analyses of the effects of the recovery act on the economy. they have reached a set of different conclusions. we still think in the case of the more powerful evidence comes from a long history of research on the effects in federal spending and taxes. and we give some weight to research that looked specifically at the recovery act, but we put more weight on the research that is looked over time and all sorts of changes in federal spending and taxes. we've written about the evidence withdrawn on its case and the working paper a year or so ago. so in our assessment, still

essentially what it was five years ago, which is that the recovery act by raising federal spending and cutting taxes spurred the demand for goods and services in the economy at a time when demand was the constraining factor output unemployment. and by doing that the recovery act raise output in unemployment substantially relative to what it would've been otherwise. on your second question, i love my job and the focus on doing it this year. >> okay, chris. >> the media landscape has changed particularly with the rise of social media and we've seen a lot of times, a lot of your papers that are highly, certain things that are i guess hot political issues get amplified on twitter when someone may be writes a headline that's not particularly accurate. we saw that in the health care study and that just is amplified on twitter and all of a sudden the message is gone and it's been nearly. can you describe what it's like

internally when you have a paper you forgot for so long, thousands of words that gets reduced to a tweet that is wrong but that becomes the narrative? what'what's that like insight cn it seems to kind of get out of hand? >> as i said, we try to write as good as we can -- inside cbo. about our analyses and in the case of back to the affordable care act, we were i think quite clear in the outlook about how the effects we were describing would come almost entirely from changes in workers decisions about whether and how much to work, rather than from employers decisions about whether to hire them. at the same time we recognized in this case and many others the work that we do this technically complicated. and people who read it will misunderstand it sometimes. there's a regular part of our process to look at what people written about our work and give them a call if we think that ms. understood it.

so a number of you talk to us about how you're interpreting our work to make sure that you are seeing all the facets of it and we reach out to you if we take, it would read something we think shows that not everything was clear. we do the same thing of course with the people on the hill for whom we were. we see things that seem to us to be misunderstandings of our work and we try to clarify it sometimes. basically unhappy that there are, he seems to become a growing number of people who are interested in serious quantitative analysis of public policy. i think that's a great thing for folks like me and my colleagues could do serious quantitative analysis of public policy. you're right that there's a faster feedback loop in the comments then there's been before. and i think that increases the importance for us of being very clear about our results when we released them. >> is there someone in cbo who watches twitter and seize the narrative shaping up? >> from any of you know, they're

watching what's happening but we are, we're not a very large place and we have probably in any given area you could then we probably have fewer people doing that than you might expect. and so we rely on a few very good people to cover a lot of territory. and that's true in our communication strategy and also true in how we run our i.t. and all the areas of policy we and less for the congress. we're trying to get the very most out of the information we receive, and our job is mostly to speak to the congress. we think it's important that the reporting of our work be accurate because we recognize that many members and staffers in congress won't go tour website necessary. they will learn about our work to something else they read. so it's important to have that be right but our job is basically to do the analysis and give it to congress, not basically to sort of be a hall monitor in the twitterverse about our work. >> i think we got a quote for

the morning. paul, you've got -- that's it, that's okay. then i will come to you. >> are you taking a more in depth look at the effect of laws and proposals on the labor market than you did in the past? and if so, is that because you have more sophisticated models? >> one of the areas that we focus on in the last years at cbo is to strengthen our modeling of the effects of fiscal policy on the economy. i think that is an absolutely crucial issue for congress because a lot of proposals that deal with the growing budget deficits and debt have involved significant changes in policy that would affect the economy in potentially important ways. and we think that as we look at changes in immigration policy, that are being considered, changes in tax policy that might be considered, we think we need

to be able to give congress estimates, analysis that is at the cutting edge of what the economics profession can do. so we have spent time building up our model in that area and we put it to use. we have worked in other areas as well. we've strengthened our modeling of the health insurance system for people under age 65. we've strengthened our modeling for people over age 65. i've worked on previous proposals. part of what we need to do at cbo all the time is to do the analytic work to be ready for the policy proposals when they come. and i think we mostly hit that target and i'm glad when we do and when we don't, then we regretted. we tried to scramble to catch up. >> my apologies for being late to the. to real quick things. one tactical, one over the. the technical thing is easy. presidentpresident s budget is both be submitted march 4. à la jesus but you will take to

get back something to congress after that date? and then a big overall question is, i that i know this back in november and december saying that you stabilize the debt, need about $2 trillion over the long term and but to to endorse indeed in -- tenure savings to reduce it to breed recession 11, about 4 trillion over 10 years. it's similar to what bowles-simpson was saying back in 2010. i'm curious as to, walk us through the overview of how much progress was made on deficit reduction in these four years from 2010 to what seems to be now a lull in the budgetary wa wars. >> so on your first question, it it traditionally takes us about a month to produce estimates of the president's budget. it that time frame varies depending on what the policy proposals are, how familiar or unfamiliar the arduous. and often can vary depending on some underlying data.

so use a lot of data that comes up with the president's budget separate from his proposals, but david is very important updating our baseline were. we won't make any precise predictions but in the past about a month. i can't speak directly to what bowles-simpson and their colleagues were saying a few years ago. certainly there have been some changes in federal policy since, over the last few years that have narrowed the deficits. as we project them, for example, and in particular the caps on discretionary funding. there's also been changes in policy that if either narrowed or widened deficits so the extension most of the expiring 2003 tax cuts worsened the deficit relative to the current law that we have been using. but allowing some of those cuts to expire narrow the deficit relative to what other people have referred to as the current policy baseline. it was very hard to keep track,

and we've not tried to keep track formally of all the changes in the policy the last few years. i think the most important thing for congress to understand is at this point in time what are the choices and constraints it faces going forward. and as you said, we reported in a report called choices for deficit reduction and updates that if congress wanted 25 years from now to have a debt to gdp -- a debt to gdp ratio about what is now, over the next i get about $2 trillion continue to deficit reduction the 10th year at about the same share of gdp beyond the. if you want to bring the debt back down to about the same share of gdp it was on average over the past four years, then it would need to have about $4 trillion of deficit reduction. that's our best estimate of where it stands now and that's most important thing to understand spend what is your. >> guest: to where the number seven since 2010? with a bigger or smaller in 2010, do you think? >> i think it depends crucially on what your benchmark is to

start with in terms of a tax provision, expiring tax provisions i don't think, i think if one started from a few that's assuming those tax cuts would be extended, then certainly the efforts to reduce deficits since then have narrowed the future fiscal gap. on the other hand, if one started where we have to start then which was with current law, then the extension of most of those expiring tax provisions have lightened the fiscal gap. >> and with that i want to thank doug elmendorf are doing this. thank everybody for setting it up. i hope you come back. >> i would love to. thank you all very much. [inaudible conversations]

>> [inaudible conversations] >> we will continue the conversation on books tonight on c-span2's in depth. will talk to author and professor bonnie morris. she's the author of "women's history for beginners." that starts at 8 p.m. eastern.

>> the beauty of america is that in this country we have the ability to write the script of our own life. we are in a sense in the driving seat of our own future. and our biggest decisions in life are made i guess. america creates the sense of possibility. and out of that you can become an activist, a committee organizer in a sense, what are you doing what you're living off the great capitalist explosion of wealth that you didn't even create. spink so many strong and set up, it's hard to know where to begin. nobody said america's the most terrible place. nobody, but there are couple of assertions that you have to take on face that are astonishing. one is the idea that america's great invention was wealth creation, not based on theft at all but what about the theft of the entire continent?

that was a theft. that doesn't mean -- [applause] 90% of the residents who lived here were murdered, and that was a part of it, to. >> bill ayers and dinesh d'souza debate what's the great about america, tonight at eight eastern on c-span. >> the u.s. department of agriculture this week hosted its annual agricultural outlook forum in arlington, virginia. one session focused on the role of agriculture in international trade. we would've from agriculture secretary tom vilsack. the department's chief economist and head of the u.s. agency for international development. this is one hour 40 minutes. >> good morning. i'm deputy secretary of

agriculture, and this is usda 19th annual outlook forum. let me start with some housekeeping and ask you to turn off your cell phones to everybody take a minute, turn them off. i turned mine off before i got a. so please do that. on behalf of secretary tom vilsack and usda's office of the chief economist, welcome to each of you. thank you for being with us. especially our international guests, and a special greeting to everyone who will be watching the forum later via webcast. several representatives from foreign embassies are in the audience including mayors of agriculture of costa rica, gloria abraham, and we're honored to have her with us. also joining us is a former colleague, secretary of agriculture from california, karen ross. i'd like to open with a deeply felt thanks to individual on our organizing team, planning the forum demands great skill,

knowledge and attention to detail. for months and months. with special recognition to chief economist joe, you hear from in a few minutes. and jerry who heads up this effort. and my appreciation to more than 95 distinguished experts who will speak at 29 recap sessions. in fact, we have so much to share this year that tomorrow he will have six choices instead of the usual five and our concurrent sessions. the secretary and our special place this year to present two very full days highlighting the changing face of agriculture. and there's no question that american agriculture demands a more dynamic population. we face pressing issues about the aging of the american farmer, the increasing food demands of this century, and the next generation of american

agriculture. at the same time we're seeing a real shift in agriculture with new farmers taking their lives on the line. there are women, immigrants, returning veterans, recent retirees, and former range heads coming back to the farm. this morning secretary vilsack will moderate a panel exploiting unlimited opportunities for young farmers. and i will moderate a panel featuring successful women in agriculture. and this form devotes how agriculture supports our veterans. for abroad looking to agriculture's changing demographics the sector will get a first glimpse into the 2012 census of agriculture. a little tighter this morning. in a session this afternoon we will explore the consensus in greater detail. while we look at the future we're also celebrate the 100 year legacy of the cooperative extension service and project is changing role in this century.

agriculture is a depend on part of the 30 and people who are with us from outlook forum student diversity program now in its eighth year. these are high achieving students eager to learn all they can in these two days. many thanks to program part of the university of maryland, and their sponsors of make this student opportunity possible. farm credit, usda's economic research service, the natural resource conservation service and the agricultural research service. students, would you please stand? they are right back here. give them a hand. [applause] >> i had a chance to meet with the students this week and i can tell you that are so bright and i ask questions. good to see all of you. i also want to thank ffa leadership and the agribusiness

study group on national defense university who have joined us this morning. and the u.s. farmers and ranchers allies for hosting a live stream through dialogue discussion you are invited to attend on nutrition, who is shaping america's eating habits. were also honored the u.s. trade rep mike foreman will be our dinner speaker this evening. as you can see we have a very ambitious today's lined up that will -- at the same time we will remain true to the forum's central core, the outlook of agricultural economy and trade. chief economist joe glauber is our first speaker with the economic outlook for agriculture for 2014. his remarks follow the strongest five year period in our nation's history of agricultural export. he was a usda's chief, deputy chief economist for 15 years before heading up the office of the chief economist. in 2070 within special doha

agricultural envoy at the office of u.s. trade representative. he has served as economic adviser at double her house agreement leading to the completion of the uruguay round negotiations and the senior staff economist at the president's council of economic advisers. the sector looks to dr. glauber editing for developer to agriculture commodity markets on issues from trade negotiations to energy policy and legislative proposals. his responsibilities include global climate change analysis, and every highlighted by california's severe drought and dr. glauber chairs the board of directors the federal crop insurance corporation. i'm very delighted to introduce joe. joe, come on the. the things that i think about what i think about show not only how smart he is, how dynamic, how much he knows and how he can rake and very, very complicated issues, even for simple mind like mine, he is definitely ta tall. but he fights to work for those who don't know that the don't know that but it's always a fun fact for me to think about joe

out there snow, ice, rain, and d of like the postman, he is always there. thank you, joe. [applause] >> well thanks very much, deputy secretary. another good forum, and i think this is the 90th foreign or so, so we been around a long time. what i would like to do is do what i was too and that is go over the outlook for u.s. agriculture, switches reminded me that, as t the weather not my notes were from last year or the year before him and, frankly, you will see some similarities just because the trends we've seen over the last several years are still in place today. and, in fact, i'm going to start with a chart that i've used in the past. a few years ago i showed this chart and it essentially shows a major agricultural price, crop prices over the last several

years deflated, that is, taken out the inflation affects taken a. you can see this long trend is downward over from about just after world war ii down to about 2000 or so where prices can with the exception of the spike in prices we saw in the '70s because of the grain sales to the former soviet union. we've seen essentially this marginal productivity growth that cause prices to fall in real terms. this is one of the huge success stories of agriculture in the competitiveness and the productiveness of u.s. agriculture in particular. you can see that pretty much carried through about 2000. what happened really over the last 10 years has been remarkable just in the sense of one common we've seen prices for most of the major crops, field crops double count increase by 100% or more. we look at agricultural trade

has doubled since the levels that we saw in the mid-to thousands. farm income has doubled. just amazing. since 2006 we've added about $1 trillion to farm equity. what we seem course of having record prices in 2012 with very large global record crops, we saw prices fall. and with some pretty dramatic falls in the case of corn down almost 35% or so from last year. and as we project out the economic research service when they are doing our 10 year projections, we look, instead returning to that longer-term downward trend we see more of a flattening of prices. of course, these are highly dependent on assumptions on yields, highly depend on assumptions about whether. and we know for one thing that one way or the other goes next

10 years those lines are going to look a lot more readable than they did in our projections. i think it's fair to say there is a lot of still strength in the underlying economy despite the drop in prices and i want to go through some of those factors. one is when we talk about all the global record production that we saw this past year, global record corn crop, global record wheat crop, global record rice crop, feed grains in general, global record, soybeans record crop, sunflowers record crop. you can just go down the line. i prices will do that but it will bring in more production, and with better weather issue that we saw last year, we see these records. but the thing that i think that this chart shows is not only have we have global record production, we falsely global record use. you can see year-over-year records. in general grains have been growing at about 2% per year. that's total grains.

and certainly to look at rice and wheat, they have been moving along about with population growth. but look at corn. court has been increasing almost 3% annually, close to almost 4% annually in fact. some of that is biofuels, but a lot of it is increased demand for feeding because of increased livestock production and i think as we move forward that demand will continue to grow. and then if you look over on the other side of the chart, the oilseeds, the scales are a little misleading but with oilseeds you have seen greater than 4% growth. i could extend this chart backwards into the '90s. you would see this continue remarkable growth in demand for oilseeds production. we project that to continue. i think this is evidenced very well by the fact that our revisions for the agricultural exports come out today and will

be available for release in more detail today. but we are now projecting fiscal 2014 exports at 142.6 billion, that's a record. that is up more than 5 billion from our august estimates for fiscal 2014. i think the important thing for member is this isn't a year we've seen prices decline. so these are increased volumes, increased by across the board for grains and oilseeds, very strong demand completing over the last increases over the last three or four months. imports are up as well to $110 million but still a very healthy trade balance of almost $33 billion. and so again, this whole growth in agriculture, again by world demand for grains and oilseeds i think is very, very important to you can see also, and i made

this point several times over the last two or three years, just what a big factor time it is do. $25 million estimated going to china this year. again a record, and china remains, record for china, and china remains our number one market. most of that is the soybeans and cotton, but again i think as i went through last year there's a whole host of other products that have become more and more important things like sorkin, things like livestock products moving there. is a will continue to be a very, very important market. looking for images want to just give a little -- we put out a baseline estimate of just a few weeks ago and here it shows the projections are for global trade in soybeans and feed grains and wheat. and you can see there we are expecting that to increase as well. again reflecting strong growth

that we anticipate in these markets. if you were to factor into productivity gains, one way to think of this is this adds about the out years about 50 million acres for the growth in trade that we would see. that has to come from somewhere. i'm not saying that that's an additional 50 million acres that need to be planted, rather that some of that may come out of other crops, other things but, and it certainly isn't all -- u.s. won't see all this thing. this is global. we will face fierce competition for soybeans from south america in particular. wheat from the former soviet union and other places, corn also from south america, and southern hemisphere countries. so again, this isn't, shouldn't

be translated into just positive members for the u.s., but i think if u.s. does remain competitive then we will compete for a share of these markets as we move forward. let me turn now to the domestic thing and here is a chart also used a lot over the years, and i think it's received a lot more focus recently because of proposed regulations by the environmental protection agency on renewable fuel standard and what that might mean for corn used for ethanol. we have known for a long time, that is, ever since under the energy act of 2007 at we would see this rapid buildup in corn used for ethanol up until about 2010. than was anticipated that would flatten. and, indeed, we have seen that growth pretty much at around 5 billion, that level at around 5 billion bushels used for ethanol per year now. the third of it comes back in the form of dried grains but the fact is ethanol use has been

fairly flat over the last few years but and i would say this has been long anticipated. the issue is in terms of moving forward, how much growth will receive. i do think we will see growth. a lot will depend on penetration of higher blends for ethanol but the other very important thing and we've seen this over time is the importance of ethanol exports. back in 2011 we exported about 1 billion gallons of ethanol, or more than a billion gallons of ethanol. you can see here with some of the markets. i think this will increase. longer run and as i said in the past, a lot is going to depend on the price of petroleum and the underlying feed stock price of corn. i would contend that those few can't get too far out of bounds before you will see more ethanol being, or corn being converted into ethanol. and competing in a market.

the other big factor obviously the farmers are looking of this year is far bills but i think a good this is the answer to that was out there by the fact that farmers were trying to make planning decisions are pushed -- not know whether not the would be a continuation of the 2008 at or a new farm bill. we have that resolve now, and as the deputy public and to integrate length and the secretary about how important it is to get that coveted and get that out, those rules out the farmers will be able to make those choices. but the fact is as farmers will be face was a very significant choices. gone are the direct payment program, the countercyclical payment program and the old acre program replaced by similar programs in the sense of having every revenue programs and price loss coverage programs. and then on top of that there's a whole number of augmented crop insurance programs that you may or may not qualify. all this is to say that there's some complicated choices for

producers as they go for but i think significant here with congress agreed that he should be based on based acres rather than planted acres that means these programs will have less direct impact or influence on planting decisions. so planting decisions we believe will continue to be largely influenced by relative prices. i think that as an economist i think that's a good thing. the other last thing i would get into before getting into the short run outlook is actually ground. and again another story that has carried on for a long time. this is the fourth consecutive year that we think about conditions lingering in the southern plains. we know what impact that's had on crops over the last few years and in particular the livestock sector where we've seen some big losses in cattle inventory in those regions. but the other big thing here, and i know the secretary of

agriculture from california can attest the difficulties being faced with water and availability right now in california. and, obviously, california is our number one agricultural state. there's a lot of concern in the focus now looks at how, what availability there is a and how will that be allocated among crops. producers there will have to make decisions on what crops to plant, and, obviously, when you talk about a state that produces about one-third of the vegetables that we eat in this country and about two-thirds of the fruits and nuts, these things end up being very important. let me turn to the short run outlook, and again tomorrow as you all know we have extensive sessions on grains, oilseeds, livestock, dairy and other, the commodity things i will not go into great deal of detail here but i do want to talk about two

things. one is the fact that we enter this year, 2014, even after these really large mobile record productions. weasel into with a pretty tight stock situation and i think this is again an interesting back story to what's been going on in the world. that is, despite his big run it in production, because of the record global use that we've been seeing, these stock levels just are not increasing all that much. all that is to say that prices and other things will remain sensitive to production shortfall. so if there are problems this year that emerge we could see spikes in prices much like we did in 2010-11. i'm not saying necessary those levels and i think but generally, again assuming normal weather in the world i think we should see the larger production this year and a building, for

the building of stocks as we move forward. the numbers go i know a lot of people are interested in our what went to survey for planning issue. you can see total commit a look at the major crops, the eight major crops that we are expecting total area to be down marginally but actually fairly close to last year's levels, the big i think one of the more interesting decisions obviously producers are going -- midwest producer in particular making that choice between corn and soybeans. if you were to look at future prices for march delivery, that is what south america would've been facing when they're making their planting decisions, you would've seen the soybeans and corn russia around three to one. and so it clearly is favoring the planting of soybeans. but that's done a lot since then of these if you look at harvest to delivery service. we can look at it ration closer

to 2.5 to one. that still is very favorable for soybeans and we expect soybean area to increase by about 3 million acres. and to see a decrease in corn acreage down to around 92 million acres. we we know from the report that's awful but from last year, and again, you can see there are changes there. the to cross that we will see i think some increase in production will be rice. rice, we've had very strong prices world rice prices have been very strong. i think rice will look very attractive relative to other alternatives, other alternate crops. the other thing again getting back to the california situation is i think we'll see most of this increase occurred in the delta anything we'll see more medium and short range being dealt in the -- typically grown

in california. i think there will be producers in california will be faced with decision on whether or not to sell their water rights and not plant rice this year. we believe some of that will migrate to the delta, lease for this year. okay, i think from that we are with again, strong plenty both for corn and soybeans and again return to more normal weather this year. we should see close to record crops, probably record crops are anticipating record crops and soybeans and maybe even in corn. with better production. all that will bring prices down. i think year as we look at our great expectations for prices in 2014-15, you can see that for many crops these are the lowest levels that we've seen since 2009-2010. we're looking at a price under $4 per bushel. again this is higher than what we were carrying in our baseline

projections, largely because of the change in the 2008, with a new form programs. we had assumed under the continuation of the old law that morland would've been planted to court because of the acre program. now with a new programs based on based acres we think it will be more flexibility, they will look at the soybeans to corn ratio and plant a little less corn ethanol. but even so, priced below $4. we are looking at wheat price of $5.35. soybeans $9.65 at all these prices the lowest level since 2009-10. cotton off a bit. lowest since 2009-10. and again as i mentioned rice prices still quite strong at $15.90, again very similar to $16 or so we are seeing this year. as for a specialty crops we've been anticipating that to drop a

little bit just because we were looking at some changes in prices that would've brought down revenues for both fruits and nuts and vegetables. however, i think with the big uncertainty there is california but as i mentioned, one-third of the children in the country are produced in california, about two-thirds of the fruits and nuts and the fact that you're looking at nuts in particular i think that's almost 80% or so. and the producers are going to have to make tough decisions in terms of how to allocate water in california and i think we are all looking at that very, very carefully. any sort of drop could have some impact on prices, et cetera. let me turn quickly to the livestock sector. i think here clearly if you look forward to 2014, the livestock, the annual sector generally is in far better shape than we've seen over the last several years. we know over the last four or five years that we've seen this extended period of low fee to

price ratios. that is, the feed cost and high product prices even though they haven't been high at times, that property, profitability measures at least measured here by sort of crude the price ratios are all significantly improved this year. the other big thing product prices for most of these things were looking at record prices for beef. we've seen a high prices for poultry, high prices for pork. all this, a lot of this being driven by just how the strength that we've seen in export markets. a lot of us can remember 20 years ago when exports contributed to only about a couple percentage points the overall production, which could exports. now you're looking at poultry over 20% of broilers grown in this country into being

exported. so very, very strong growth in exports that we've seen. this is likely to continue to wear down a little bit for beef but that's more an issue of constraints we joke into an imminent. but again, strong growth in these markets for livestock products. and, of course, that translates to the extent that that will translate over time to increased production. that will mean more increased feed grain production, increased oil seed production. we have seen some constraints and i think with these data margins there's been a lot of assumptions we would see in expansion. we know the drought kind of cut that a lot but this year with the second half of the 2013 with the prices coming down considerably, there was thought that we see a little bit more expansion in beef and hogs. on the cattle thing, these

aren't the lowest numbers in terms of the numbers that were reported for january 1. lowest inventory since 1951. a lot of things they are i think producers seem to appear to be reluctant to expand until they can be assured there is sufficient forged condition but this is not the issue when we look at california with reports but, an in the southern plains,o this will be a concern and it takes time to rebuild a biological factors are little bit different, or take a little longer for beef cattle than they do hogs and poultry, certainly. we know these numbers are down. we know if you look at where the losses occurred, they occurred in these red state but i know the numbers are a little bird and i apologize but we know that there's been significant reduction in inventory since 2011. significant reduction in where the southern plains. if you look at total loss of

around 1.2, 1.3 million head since 2011 in the u.s., almost 85% of that are still to be cowed or in this for state and you can see the big losses in states like texas so it will take a little while i think to get that turned around and we should start seeing some expansion in 2015. but again with the cattle at least it will take a longer than some of the other species. the other big one, however, has been hawks and their again they've also seen very improved profitability. however, with the diarrhea virus, that has affected let her rates. that unfortunately has spread. it affects piglets and we've seen mortality higher than what we might have seen. the pigs per litter rate, some measure of productivity in the sector has been just a dramatic

increase over the last 10 years as we've seen. year over year as a look at quarterly numbers the increased year over year. just dramatic. this year, however, at least we're seeing some signs a lease rates that those are little lower than we might -- you can see there some cyclical behavior in here anyway but we are seeing a little bit more than what we would've seen otherwise anything that, unfortunately, will reduce the expansion. let me turn quickly to gary, and here i think -- dairy. i'm using the feed margin looking at proposed, or the feed margin out of the farm bill just looking at milk price is a component of each. here you can see that every margins have improved and increased significantly over the last, since about mid summer or so. we started seeing, now with the margins above $8 looking very

profitable. again was a record prices for a lot of dairy products. and begin they are being helped by lower the cost. again, california is another wild card in this thing but california is a major dairy producer. and we know that their supplies are going to be adversely affected by this drought. the margins in california may be for some lower producers may look very different than this particular chart shows. we anticipate margins to continue to be very, very strong and look out over 2014. again ally being driven, this is another picture of where trade has been very, very important for an industry that really didn't think a lot about trade, frankly, 20 years ago where it was more surplus disposal 20 years ago, now we are seeing, we have rejoicing very strong seed in by yourself but look at non-fat milk, other categories,

u.s. has been very, very competitive in these markets. and we anticipate this to grow over time as well. so in looking at prices i think in kind of contrast to what we saw on the grains aside, here we have seen the result of what has been really reduced supply and supplies that haven't expand as fast as might have thought otherwise. that is, and we're seeing that in the form of just record high prices, steer prices $100, $136. hog prices down a little bit but still very close to the record in 2011. broilers just off marching from last year's record, and dairy prices at 2120. all very, very positive things for the sector. let me turn quickly to just food cbi. despite these high prices and tight animal product prices, the

cpi food inflation measured as percent of inflation rate come excuse me, prices this year relative to where they were 12 months ago has been very low. over 2011 the average inflation rate was about .9% for food consumed at home. it's a very low number relative to more of a historical level of two to 3%. surprising number in one sense. we thought we would see some food inflation with the drought a year ago that it really hasn't emerged. as we move forward, we are forecasting an increase around 2.5-3.5%. this again, they will be talking about numbers later today if i'm not mistaken just right after lunch. but as we look forward, all food inflation and the at home in

inflation for food prices looking at 2.5-3.5% for 2014. let me turn the last bit and that's looking at farm income. and now ers did release the net cash income numbers just last week i believe at $101.9 billion. again down, still about $5 billion higher than the 10 year average account reflecting lower prices. no large surprise. largely the decline was led, not surprising, a decline in receipts, cash receipts for oil seeds and grains, total there down probably about $18 billion or so overall. the other big change was the new farm bill. new farm bill eliminated direct payments. direct payments would've been paid out in calendar year 2014. they won't be. that's a little less than $5 billion. certainly produces are going to

be eligible for payments under these new programs if there are payments but those will be under the new programs. it will be unveiled until calendar year 2015, just by way to payouts are. i think the cash income situation here is certainly down from the record levels we've seen over the last couple years, an on the record we've seen but they are still high relative by historical standards. the farm equity situation, i mentioned the overall equity increased by about $1 trillion since 2006. a lot of that driven like this enormous increase in land values that we've seen over the last 10 years. and to get a lot of this, an artifact of two things. low interest rates and then just a strong growth in farm income that we have seen. as we move forward i think one issue will be what net cash

income. we know we're looking at a little bit of moderation there. and then on the interest rate side we've seen very low interest rates. we have begun to see an increase in interest rates over the last several months. certainly if you look at things like congressional budget office and other institutions that make projections about interest rates, we are seeing at least forecasting an increase in interest rate. and that will soften, i think will lead to a softening in land value short of any sort of price spike we might see this year or any other unforeseen event. that again i think we could see some land, cash fall if these lower price are to continue. but again all this comes after a long period of build up in land values. if you look, and as a closer, a

10 if you look at the overall economy and look at the financial performance, again what is so striking here is at least by an aggregate measure of looking at total debt held by the farm sector itself the lowest level that we reported, or that we have seen since we began reporting december back in 1960. you can see certainly compared to commuting back to the farm financial crisis when you had get cash, that is as a nation as all over 20%. that's now down to 10.5%. and again i think that's a dramatic, again, a result of just begin the phenomenal growth would seem in the sector over the last several years. you would really need come even to get up to 20% now, holding get constant you would need i think a drop in land by of over 50%. it just goes to show how

different things are than they were back in the mid 1980s. looking forward we obviously want to look at that level. we want to look at what we anticipate for asset levels, but just as they were at a very low level right now and that does different by commodities. get assets are a little bit higher typically foresaw the livestock producers and dairy producers. they after all have got a pretty tried margins of less over years. i think the big dominant factor here is not surprising younger farmers who are carrying more debt certainly are looking a slightly different things. so as i close i think, you know, i fully recognize these numbers are going to look, particularly for the crop prices, look, we are down back to levels that we haven't seen since 2009-2010 but i think a lot of people would

look at that as, boy, that's a very pessimistic outlook. i think, i'm not disputing the fact that lower prices, have been negotiate on the basis of some pretty high prices that that is certainly going to be a change and a challenge for the sector as we move forward. however, longer-term i still think we are very positive aspects in what's going on in the agricultural sector. and i expect that we should see some very favorable times as we move forward and looked out at u.s. agriculture. and with that, thank everyone for attending and enjoy the program. [applause] >> thank you, drinking. we will provide a way to first

panel. the future of agriculture, building markets here and abroad. secretary vilsack is going to moderate this but i'm going to ask arcalis to join as a introduce you. i'm going to start with kathy burns who is the president of the produce marketing association, a 30 year veteran of supermarket industry including senior level positio positions. welcome. >> kelly james is next, founder and ceo of a data service saving platform for organic, other preserve agriculture commodity. paul schickler, president of dupont pioneer. he has been with pioneer since 1974. and dr. raj shah, administered of u.s. agency of international development and the former chief scientist and undersecretary for research at, education and economics at usda. and our moderate is secretary

vilsack. [applause] >> i would like to add my welcome to all who are attending today and my thanks as well to joe and jerry and his deputy and the planning team for putting this great outlook form together. want to just take a second to acknowledge the good work of the deputy in particular, focusing on young farmers and women farmers. and i think later in the session by talk a bit about the census you'll see why that work is going to be extraordinarily important and thank her for focusing attention on that issue. i also want to take this opportunity to thank joe glauber. i think sometimes her virginity to take joe for granted. he has been a chief economist for so long but raj just

commented to me, joe as we were walking out. no, what a terrific job you do in explaining the outlook in a way that folks can understand and appreciate it. and i think really, joe deserves another round of applause for his work applau. [applause] spent i want to thank them for doing this. this is a great opportunity for us to have a conversation with all of you. so this is going to be divided into three parts. first opportunity will give each panelist a chance to say a few words to you directly. then i will have a few questions and then we'll open it up to audience participation. so cathy, i think it will start with you and move right down the line if that's okay, take a couple of minutes to visit with the folks and then we will have some questions. >> good morning. i come to you from root of the supermarket industry as the deputy mentioned.

i spent 30 years in the industry. i started as a bagger and worked my way through the system and they did it most recently as the president of compliance that has 1300 stores, 75,000 associates and 11 distribution centers. now on in transition. i know part of the produce marketing association and for those who may not know what the produce marketing association is we are a global organization, we've members across 50 countries and we cover the whole supply chain. so am the seed all the way through the farm, shippers, food service and we've had some great partnerships with the government specifically with the usda. and our intention is to convene those groups across the supply chain to move the industry for. so as a think about things that are really important to us right now, it's about demand creation. and creating the demand for

food. as opposed to demand fulfillment of we know we need to do both but we believe there is a huge opportunity for fruits and vegetables specifically to be more in the market around creating demand. the other thing that's important to us is taking away the barriers to produce the food. so the opportunity to be more efficient and to leverage science and technology in a way that we can help the industry remove some of those barriers to ultimately increase consumption. and the third thing that's on our minds is the war for industry talent. if there's an opportunity and we know we have an opportunity to continue to inspire young people to come into this industry, i know it's difficult, the supermarket industry was for difficult to attract talent, and the opportunity we have through pma foundation to really build bridges across this great industry to make a real difference. ..

so again that's much more than the organic premium but you're on the edge of possibly on a farm, 50 cents is maybe worth considering. so organic soybeans looking at $26 a bushel for non-gmo, there's a general views soybean, $1.75 basis for food and summer in the range of 95 cents a

bushel basis for feed. and then finally for a hard red winter wheat organic is looking at prices over against the last three months is up $16.78 a bushel. into competitor winter wheat, $6.60 a bushel. just as i think this is important to communicate to our growers, that there is this opportunity. the second thing is there's room for organic for his production to grow. so again because of consumer demand, because of some of the bears enter into organic are fairly high we start importing quite a lot of new crops overseas. we're right in importing about 10% of our organic wheat, about a quarter of organic corn council overseas and almost right in the range of half of organic soybeans is actually grown outside of the u.s. a final note i will say on these sort of large statistics, is

non-gmo which to this point primarily an export market, japanese consumer buys a lot of our non-gmo soybeans. however, again with the consumer demands we have seen a growing domestic market. so you see a lot of processes coming online whether it's new mills or elevators that are being built to handle the growing domestic demand. use the activity light at the state level with labeling initiatives, and even when we don't have the strength of sort of a federal program for non-gmo standards, you have private sector entities that are moving into this space and creating their own standards. by the way might end up being a bit of a difficulty if we end up with multiple different standards for non-gmo. when you have everyone from full food markets to general mills to post now developing products that can carry a non-gmo label. that some of the little slice,

snapshot of the labels of the landscape for identity for crops and i which is close by saying the company that i founded didn't exist a year and a half ago. and i can't say strong enough especially to really to everyone but to the young folks getting into this sector now, entrepreneurship as a way of tapping into the innovation, it's no longer the case where you have to have 30 years of experience and a huge capital, huge investors to be able to create something valuable in the act sector. so we've seen with the rights of the data from decision data to improve on our productivity, farm manager software but all of these things require background in technology but they don't require huge amounts of capital in many cases. i have been cited by the chance or by the emphasis on onto partnership recently and am always happy to talk more about that.

>> paul? >> midmorning secretary. thanks for convened the panel and also for the invitation for the dupont pioneer to be part of it. pleased to be here. as we think about the future not only in the remarks that we've already enjoy today but as we look at the future, certainly we've got challenges. the challenges are numerous. we've got challenges to meet the demands of the world. we have demands to produce an adequate amount of food, and to do so it has increasing nutritional value. that is good event that we have. secondly, you've got to do that sustainably. and then thirdly a tremendous demand already alluded to for information, information whether it is by the farmer or information that the consumer wants. so when you look at the challenges that we have, clearly the demand, quantity and quality, in the belly and information are right there in front of us. and what i felt about is that

all of us in the realm are part of meeting that challenges. and that is what dupont pioneer is all about. what i might do is take a moment to talk about how we are addressing each of those challenges around nutrition, around sustainability and around information. so first of all as relates to nutrition, we announced tremendous achievement. we've been working on sorghum for a number of years. it started really with tremendous collaboration, first with the bill and the linda gates foundation of late with the warren buffett foundation. now a number of organizations in sub-saharan africa. but what we announced today is not only increase availability of vitamin a but also the stability of that vitamin a in

sorghum. namely, about 100%. so what that means for an african farmer is that they can harvest that sorghum crop and save it without losing the vitamin a content for up to about three months. tremendous improvement. also comes with increased levels of protein, iron and zinc so i tremendous achievement. so what we are doing there is basically delivering the opportunity for increased nutrition to children throughout sub-saharan africa. so i'm excited about that. secondly, improving rural -- my example here is in indonesia. on the island off the coast of jafa, it's a list develop heart of indonesia and what we've got in in partnership again with the minister of agriculture of indonesia is gone in, look at the community, offered improved

seed varieties, education that allows growers to improve their economic practices and put together a whole system all the way from improved irrigation capability, improved schelling equipment, improved silage practice, all to provide sustainability to the local community as they improve their agricultural productivity. just last month the president of indonesia came to our site and recognize the achievement that was brought to rome development in indonesia and w we're now in the process of extending that project across other areas of indonesia. again in partnership with local community as well as with the minister of agriculture. and then my third example is back to the information subject to we've already talked about today, that's already been alluded to. ..

with the organization to bring weather and market information forward, and just this week announced a collaboration with the university of missouri for soil mapping techniques.

so bringing an array of information together for the whole partnership, again, to improve the productivity of the u.s. growers throughout the world. so, what we are focused on our those challenges, but again, all of a sudden the room are after him proving a quality and quantity, improving the livelihood and doing it all sustainably. so i'm excited about the future. all of us here are after the same objectives, and i think sort of where joe left his remarks this morning even though we are going through challenging times and cutting off some levels that are pretty favorably for other culture, when you look to the future, the opportunity is pretty great. >> thank you, secretary come into the hold usda team for pulling this extraordinary events together. i will share one thought for everyone in this room, which is

over the next 20 to 30 years we have two to 3 billion people around the world who will move from about $2 a day in income to $10 a day or more in income. and as the transition happens, we know with certainty that people basically demand to things first. the first and most important is a better diet and that means the animal protein, higher value consumption, better nutrition across the board. second is the smartphone. i tend to think of it as they get all of the attention, but we are serious about attacking issues like climate change, improving the large-scale human mound attrition especially among children, and making big reductions in the 840 million people that will still go to bed hungry and protecting the communities that live on the

vulnerability of the more dramatic climate events and rainfall. actually, it is a dietary diversity and the agricultural conferences of that that might very well be the long-term important trend. i think the future is very bright. i think that americans farmers producers, businesses have a tremendous amount of technology and know-how and systems developed in the experience and the only thing that is extorted very to me is that it doesn't get more attention because it really is such a profound trend, and such a unique opportunity for creating both american economic value and tackling some of the most profound challenges we face around the world. >> okay. so, with those opening remarks, i hope that no one from my staff provided you with questions that might be asked so that you are

prepared for this and if they did, just forget them. [laughter] >> okay so we are going to -- this is partially about trends. and so, what i would like paul and kathy to talk about for just a few minutes is imagine this group five years from now. joe has already given his presentations very similar to what you just heard. [laughter] are back five years from now. what are we seeing in that five-year period from today? and kelly and raj, your challenge is to go further down the road. i would like you to talk about what you see ten to 20 years from now and if the trends. >> so i will start with man creation. i think there is a huge opportunity for our industry, in speaking to thiam speaking to te industry, to create, take the

playbooks from the consumer packaged goods company and how they market and a transfer that to marketing especially to small children in the millennial families. so, on average, over about 5,500 advertisements a year for junk food. for healthy food is less than 100. and so, we have an opportunity over the next five years, and i would love to make it even shorter to be able to market to children in a way that today is the age group that we need to target. we are almost a lost cause in terms of our eating habits. but if you think of the next generation and hopefully the students, too, they have a choice and marketing works. and we've entered a pretty exciting for worship with the partnership for a healthy america, the white house, sesame street and pna to provide the industry tools and framework to

do just that. sesame has given the rights to the produce marketing association to sublicense their assets, loyalty free, to farmers, growers, retailers, market products with yes, elmo and big bird and all of those favorites that we grew up with on fruits and vegetables to inspire younger kids as they are walking the produce department of the store saying i want apples, or i want mushrooms or i want cauliflower. and ultimately to have the millennial family has a different asses jammed with the product then maybe they do today. so that's exciting. the other important thing is that consumers want a relationship with their produce providers. so whether it is knowing who the farmer is by going to a local farmers market or through a qr code and understanding who grows their product from where or by

talking to a produce clerk and a supermarket, we have such a great opportunity for differentiation and the produce industry because there is a relationship there that the consumer wants to have with the products, with the farmer, with the information, to ultimately make their buying choice easier and inspiring and feeding their family and more healthy snail. so, i see the landscape looking very different over the next five years. especially as it relates to marketing. both not just on air but social marketing with the iphone, that inspire people to you for fruits and festivals and drive the food consumption. >> paul? >> i wish i could project the next six months, but i will give it a shot at five years. and, you know, and again as we come off as the years that we have enjoyed over the last three years, i think what that is going to do as we come off of those highs into the more

normalized prices, it is going to restore the demand. i think that we are going to see more demand for the livestock production and all of the things that go with that. our ethanol producers and even the biomaterials from agricultural sources will be more competitive economically than the global trade will also improve the more normalized level of prices. so that is the first thing i think will happen is we will restore some of the demands that have been eliminated through the high prices over the last three or four years. the second thing to raj's .5, or i will take it a little bit more, seven years. we are going to see 1.4 billion people move from the lower class into the middle class, and for the most part, that's where it is. and as vast population moves into the middle class, they are going to demand meat, milk and eggs and that's great for

agriculture in the united states and around the world. and third to come back to what we talked about, how many smartphones deliver information to consumers and growers around the world to improve their information source on the consumer side and an ability to produce on the farmer's side. and we are going to do it with the young people that we are going to bring into agriculture. >> so on the ten year her eyes -- priz herizon. >> the one that i have a tremendous amount of confidence in his the integration of the african food production system and system into the global economy. i think without question that will be the way that we saw kind of how china has grown and has become more integrated i think we will see that trend happen. we are seeing it happen already.

paul has described some of the things, but that is a definitive trend that brings 1 billion extra people into the global integrated food economy and in a more modern and commercial manner. the second is i think open to the decisions that we make together. and if we embrace the resilience, investment, and the kind of agricultural science that can help protect against the climate fleur-de-lis, there are about 2.5 billion people today that our producers either on the farms or herders, ranchers, etc., fisheries that are dependent or vulnerable on the evolution of the climate over the next few decades. and i think that if we hav we ha large-scale investment in science, technology, and policies that protect the resiliency of those producers we have a good outlook trend. if we don't think that is going to put downward pressure on the food production at the time that

it's needed the most. i think that we have a unique opportunity to take the science and the learning and the integrate with the market but especially for children all around the world, not just in the united states and to see people's demand, but i also think that could go the other way as well and the firms certainly have experience in the business models and make a lot of money not pursuing that course of action. so, some of the policy decisions we make of the global scale i think will affect with large-scale child attrition looks like 20 years from now and we have to make the right decision now to get there. >> everyone has covered at all, but i think that we will ask you 20 or 30, 40 years. we know the climate change is happening but independent of the climate change, if we solve the climate change problem, we still

have the opportunity to address by diversity how it is going to change with th the increasing fd production that we know is going to nee be to happen in order tod a growing population. in many conversations with the usda soil scientists they are very worried about the continuing to build and protect the hopi soil. so i think that those types of water, right here in the dc area we have kind of an unfolding case study in the chesapeake bay which supports the fisheries. we have a large farming community as well. and they see eye to eye in terms of how one should address the pollution issues. so, i think that those are the big picture challenges that will i hope when we come back 30 years from now we have resolved and worked towards resolving

some of these challenges. there was an article in wired magazine about a year ago and i think that it was a big smart and green. so that is the other sort of optimistic trend that i see is that sometimes you get into the conversations about, you know, organic versus the genetic engineering. and i want to make a prediction that some of the pension will go away because they are not necessarily always at odds. they used the case management to show some of the best practices from the varying types of agricultural production and how they can be pulled together and do something really innovative and with some breakthroughs. >> for the panel you are sitting around a coffee table in the middle of the farm country pick a region of the country that you are most familiar with for this vision.

there is a farmer and spouse. she might be in her mid-50s. they have a couple kids who have since left the farm, and you were there at their table providing advice and counsel. what do you tell them? what do you tell them in terms of what they ought to think about, what they ought to do and what they ought to change >> the first thing that i would recommend that they do is have a discussion about the future. the situation that you are describing is one of the greatest challenges that rural america has been in the next decade in the transfer of that is going to occur. so the first thing that they need to do is have this discussion about what their plans are and include all of the family members.

even with the children off the farmer there is a tremendous opportunity to engage them in the food or agriculture. they don't need to be on the farm running the farm that there is going to be a tremendous opportunity to bring them back and have them contribute to agriculture and food production. and that is what i would challenge the younger generation to get engaged in. so, the older generation had a discussion about the transfer. the younger generation to get them engaged in the opportunities. >> are you going to tell them to transfer their entire operation to organic? [laughter] go organic. the farm bill passes now. first of all i would probably do a lot of listening because i have gone around and i talked td to other it has been farm families are, you know, county elevators. there is a loss of local knowledge and appropriate

technology. there is a knowledge base that needs to be tapped into. and yes, the sort of firm of the future where you can be derived from the identity preserved crops were the environmental credit. you know, i know the usda has been working a lot on the stage ground, and how you can use the market mechanisms to protect the biodiversity and if you are protecting and building ecosystem health, that is the incentive before that we were not paying for. thanks to the american farmer we are getting some of the free of charge. maybe there is a way to capture that and a value on it. and to make sure that the true cost of the true value of what's happening at the farm level is reflected in the larger economic picture. >> what i would add is i hope that we are having food with our coffee around the table. but seriously, i think that one thing that i would make sure

they knew is that they were not in this alone. but this is an industry conversation. it's not just particularly to the conversation that's happening around that particular coffee table. answer, we have resources to provide them to help them with the conversation. that conversation. i mentioned earlier, the foundation and the whole plight of the foundation is to attract, retain and develop people in this industry. and it's very important to us to train and to develop the next generation. answer, we have programs in support to be able to help families with succession planning or young people coming out of college that might have an interest in pursuing this career. and it's our job to make it maybe more glamorous than it appears at first blush. and it is very dynamic. and you can do things with the big data. you can be on the farm. you can deal with logistics and transportation. you can sell. there are so many facets of the industry that i think we need to do a better job marketing

ourselves in that regard. so there is is a lot of support there. and also, from the children leaving the home, there is nothing wrong with people going out and getting a different experience, and they will be that much more -- they will be able to contribute that much more if and when they come back to be able to run the farms. >> well, you know, one thing that i've always been amazed by spending time on especially in america is how wired and plugged in people are to the farmers in particular to the global market. i love sitting in a montana and hearing about what's going on in russia and how that affects the predictions of the pricing. i just -- i wish that more young people in particular could see the level of the global economic sophistication technology and market potential that exists in the sector. and therefore, to see it as a more dynamic sector that they want to be a part of.

they can be productive and also to achieve some great human outcomes. but that's always impressed me, and i want to continue to make sure that folks understood this as a globally integrated market coming if you are a producer, you know, you need to both be aware of it and, you the tool at your disposal to connect to it are going to continue to increase. >> so i'm going to give you a choice in the last five minutes of the segment and then we are going to turn over to the audience for questions. so, you can choose to either be visiting with a land grant university president or with the secretary of agriculture. [laughter] either one. what advice would you provide to either one of those individuals? what concerned would you express or ask them to do differently than they are doing today? >> candido? -- can i go?

there's so mucthere is so much e focusing on a few things you can find the most value i would say the big picture hoping to make sure that we have that consumer choice. so it starts at the policy level and coexist when it's important for the sectors so tha the peope can then use economic signals to make hopefully rational decisions. i think that would be, you know, one sort of ask. the other thing is the markets like standards. so the usda and the u.s. government is sort of a natural arbiter of the standards people can then respond to as a helpful thing. and then finally, i think that just the name of the sort of creativity and just, you know, throwing down the goblet on some of these challenges that we have and whether it is innovation challenges or competitive grants, i think people respond. the private sector is really good at responding when they have a sort