Ed Schafer, the U.S. secretary of agriculture, dropped by our office Thursday with a little bit of good news:  Farmers are having no trouble borrowing money, at least for now, and farm banks seem to be in good shape.

The real test will come next spring, however, when farmers have to finance spring planting.  And Mr. Shaefer is worried about financial pressure on grain elevator operators brought on by the credit crunch.

Farm commodity prices are off their their record highs, and that might ease pressure to take land out of the Conservation Reserve Program, he said.  The program pays farmers to set aside land, which often becomes a haven for wildlife.  In the future, Mr. Shafer sees good farm land coming out of the program, while marginal and more environmentally-sensitive land goes in.

On other topics:

–Mr. Schafer thinks a world-wide trade agreement in agriculture is closer than most people think.

– He sees a bright future for biofuels beyond corn-based ethanol. Technology is on the way to make fuel will made from switchgrass, orange peels and other farming leftovers, he says.  “I think it’s not a pipe dream.  I think we’ll make it.”

– He also expects big increases in farm yields, both here and abroad.  Those will be brought about mainly by improved seeds, including the genetically modified varieties made by St. Louis-based Monsanto.

Mr. Shafer is the former governor of North Dakota.