By Milo Hamilton
Senior Economist, Firstgrain, Inc.

All is not well in the world rice market. Pakistan is dealing with heavy rains and quality problems with existing stocks. Hurricane Laura this Wednesday night made landfall near Lake Charles with a lower storm surge than forecasted but will molest rice in the field with wind and rain from Louisiana to North Arkansas this week.

Beyond the weather, domestic rice demand is up in the US and Brazil over a year ago. In Asia, both India and China claim significant increases in rice production in 2020 despite the Pandemic and despite less than ideal weather. However, the main rice crop there has not yet been harvested or stored. Rainfall in India is 7% greater than the average. In Its neighbor, Bangladesh, the rain has been horrific. India is not out of the woods either from the COVID19 pandemic. The Economist reports that upwards of 25% of New Delhi is infected with the virus. Container shipment costs are up more than 15% this year.

China is suffering from the worst flooding since perhaps 1961. In that year, its society was living through the Great Leap Forward, which was not so forward and not so great. Statistics in that period are perhaps not so reliable.

As for China’s rice production, it denies the floods have kept its farmers from expanding rice production within its borders. Yet, the Yangtze just made its way through its fifth flood now since June; the Yellow River basin is forecasted to endure more rain. The Yangtze is more like the Colorado River in the US, flowing through canyons, and the Yellow River is more like the Mississippi River and its vast and fertile river plain. Our weather consultants believe that into September rains will pick up and may interfere with harvest. They forecasted drought in South America in September in countries that export rice.

We would watch the Indian rice price as a lead indicator for Asia and the Vietnamese rice price as one indicator of overland demand from China, it there is any.

In the Americas there is ongoing drought in some regions in the Southern Hemisphere. There are rumors that Brazil wants to import rice from the US up to 200,000 MT of paddy. In 2009/2010 Brazil bought 35,000 MT from the US. We go into the end of this marketing year in Mercosur with very tight rice stocks. Stocks are so tight in the US that rice has been transshipped from the Gulf Coast up to Arkansas for milling, very unusual.

In Brazil, we had presumed that if prices skyrocket in South America, then rice acres would go up. What happens in 2021, if rice acres in Mercosur do not increase or even decrease? Rice farmers there may plant crops like milo instead of rice because it takes less water. Unlike the US, Mercosur relies a great deal on surface water availability.

We face a very active hurricane season along the Gulf Coast. When it rains, it pours in the world of rice. You want a stable climate? Our advice to you: Do not grow or trade rice. Or get a good meteorologist or two. All we know is there are many unknowns ahead of us with no precedent in recent times.

Dr. Mo Way, Kate Crumley and Dr. David Kerns

Just want to alert you rice farmers and crop consultants to be on the look out for an aphid…English grain aphid. As you probably know, aphids have piercing-sucking mouthparts, like a rice stink bug. But aphids suck up plant juices from the vascular phloem tissue of plants. They get rid of excess fluids by excreting a sugary substance called honeydew which provides food for an organism called sooty mold fungus. This fungus is black and coats the leaves of affected plants. So, this coating can interfere with photosynthesis and sometimes the honeydew can gum up harvesting operations. Aphids have an amazing reproductive potential, so populations can build-up quickly. They can produce winged forms which can travel long distances with the aid of wind. So, these critters are good colonizers.

I have not observed English grain aphids attacking rice in the field, but I have observed them in abundance in the greenhouse. Anyway, last week I received a call from a concerned farmer in Wharton Co. who recognized the black sooty mold fungus on his rice crop. I immediately thought the cause may be the rice planthopper because this exotic species also produces honeydew. I asked Kate Crumley, who works in Wharton Co. as a Texas A&M Extension IPM Agent, to check out the situation. She visited the farm and farmer and informed me that the critter was an aphid feeding on the foliage and panicles of the rice crop which was being harvested at the time. She sent specimens to Dr. David Kerns, Extension IPM Coordinator, at College Station. David knows his aphids and identified them as English grain aphids…Sitobion avenae. Next week I plan to visit the farmer and inspect his fields which are now being ratooned. I will keep you updated. If you observe sooty mold fungus in your rice crop or if you think you may have any type of insect problem, contact me at 409-239-4265 or moway@aesrg.tamu.edu. There is a possibility this aphid may infest the ratoon crop.

So, this is a good example of how research and Extension work hand-in-glove to help you farmers. Texas A&M is a Land Grant University with 3 missions…teaching, research and Extension (extend research results to clientele). This model was created in 1862 by Abe Lincoln and has survived the test of time! The teaching component includes training undergraduate and graduate students, many go on to serve the Texas and US rice industries.

Major rice buyers of U.S. long-grain rice from Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, and Panama along with affiliated U.S. industry members, all tuned in to USRPA's virtual conference yesterday. The presentations focused on the current status of the on-going rice harvest, the short and medium-term outlook of the market, and the influence of the COVID-19 pandemic on the economy.

After some introductory comments from Marcela Garcia (COO of USRPA), Dwight Roberts gave a brief overview of the past 12 months. Roberts described the development of the 2019 harvest into 2020, when the COVID-19 panic set in and living through a pandemic became the reality, in a series of developments he described as "The Perfect Storm."

Dr. Thomas Wynn updated participants on the current harvest and development along the gulf coast, where today farmers are cutting full speed, as well as the anticipation of the harvest in the Mississippi Delta. 
Finally, Dennis DeLaughter gave an overview of the world rice market with a focus on the U.S. outlook in short and medium terms. DeLaughter then turned to an economic look at COVID-19 and its influence on the rice market and the economy going forward. DeLaughter highlighted recent information which was extremely interesting to participants; his final thoughts being:1)   the U.S. supply will be larger but will still take some time to fill in the holes, 2)   the world market is vulnerable to supply issues & prices will remain elevated in 2021 and 3)   COVID-19…. better as confidence improves…but far from normal.

Comments from the various countries are greatly appreciated:

“Excellent Initiative” (Costa Rica) 

“Awesome, Perfect. Straight to the point and very executive” (Nicaragua)

“We believe this type of meeting has great value, you should do this regularly with this excellent format” (Guatemala)

“Great session, learned a lot” (Honduras)

“very interesting and useful information. We want you to do it again later in the harvest”

“Excellent meeting, for us it's important to know and understand the trends and risks” (Mexico)

“This kind of meeting is so important, especially during the pandemic with so much uncertainty in the market, for both farmers and our customers in Latin America. We believe in supporting our rice buyers to make important decisions in managing their markets,” responded Dwight Roberts.

The meeting ended with a short Q&A session. 

The Senate recessed today until September. This week was originally scheduled as the first week of the Senate’s August recess, but Majority Leader McConnell had kept the Senate in session in order to allow more time for negotiation on the fifth COVID response. The House had recessed earlier and is not scheduled to return until September 14^th.

HEROES, the House passed bill spending $3.4+ trillion, and HEALS, the Senate proposal spending $1 trillion, are worlds apart in spending and policies. Meadows, Mnuchin, Pelosi, and Schumer are tasked with trying to reach an agreement but so far have little to show. Each side blames the other for the stalemate. A major sticking point at this time is the total spending amount for this response. Republicans refuse to budge from the $1 trillion amount insisting that there are many items in HEROES that have nothing to do with COVID, while Democrats insist that at least $2 trillion is needed.

Both HEROES and HEALS address various agriculture issues, particularly CCC spending, with the latest HEALS proposal containing $20B for the CCC. Although the chambers could return early and pass compromise legislation if a deal is reached, many are expecting no action on the latest COVID response until after the respective conventions.