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No Room For Expansion

There is little chance to expand U.S. crop plantings even if land reserves are freed in the face of tight grain supplies, Agriculture Secretary Tom Vilsack said May 26.

During a Senate hearing, Vilsack warned against cuts in agricultural research programs despite U.S. budget pressures and encouraged worldwide adoption of technology such as genetically engineered seeds. The United Nations forecasts the world population will grow by one-third by 2050.

Vilsack said the federally subsidized crop insurance system should be buttressed in a new farm law by an ever-ready disaster program. There is no funding for a disaster program in the 2012 Farm Bill. One could cost $9 billion over five years.

“The key here is to be as productive as we can with the land we have,” Vilsack said when asked by Indiana Senator Richard Lugar if more U.S. land can be put into crops. Vilsack said there was not enough spare land to make much difference.

Some 31 million acres (12.6 million hectares) of cropland are idled in the Conservation Reserve, equal to 10 per cent of U.S. plantings.

“Not all that land is going to come out,” Vilsack told reporters who asked about opening the reserve. Some is too fragile for crops and some serves as wildlife habitat.

“We need to focus on research,” Vilsack said, to develop higher-yielding crops that withstand bad weather as well as find more effective controls on crop pests and diseases.

Analysts in a Reuters survey said they expect U.S. corn plantings to be two per cent smaller than expected, which could mean tight supplies through fall 2013.

“Given just average yields, we should have good enough crops to meet our needs,” Vilsack said in an Insider interview. He said crop production would be large enough to meet food, feed and biofuel demand while holding food inflation at a moderate 3.5 per cent for the year.

Prices for meat and dairy products, which account for 19 cents of the food dollar, are forecast to rise 5.5 per cent.

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