Volume 18, Issue 21

May 27, 2021

In This Issue:

New Crop Rice Planted, Farmers Looking for Improved Prices

Rice planting in the U.S. is coming to an end as most states are now passing the finish line. In California, rice emerged is about 5% ahead of last year whereas the other states are slightly behind. Only about one-third of the crop is considered to be in poor condition, but with it being so early in the growing season, that statistic doesn’t yet hold much merit at this point in time.

World market prices are showing small signs of softening, according to the USDA which recently reported world market prices (rough rice) to only be down 2% in the last 3 months. Last year at this time, world market prices were at a similar level, however, they had made a 15% run in the 3-months leading up to the middle of May.

We are on the bridge between old crop and new crop. The June 29th actual planting report is much anticipated as it will indicate how many acres shifted over into corn and soybeans. Then the next WASDE report is due out on July 12th and will set the tone and real indications for new crop pricing.

With prices dropping in Brazil those suppliers should become more competitive and closer to the U.S. if not lower. Much depends on the freight market and foreign exchange. Some analysts see 200,000 tons of paddy exports and much more milled rice as well. The government agency CONAB is saying yields in the largest state of Rio Grande do Sul reached 8,500 lbs per acre.

Brazil must export to avoid additional price reduction. Currently business is slow and vessel freights are very high including for containers. We understand the Brazilian grain quality is excellent.

After a several-month bull run in freight markets, which was extra aggressive in April and May, the Dry Bulk Index showed its first sign of letting up. The recent retreat in shipping prices is attributed to China’s claim to police the industry and reduce hoarding and market manipulation. Of course, most analysts expect this small slide in prices to be quickly reversed as the shortage of ships and containers is clearly an ongoing obstacle.

An inflating US Dollar coupled with excessive shipping and logistics costs continues to have a significant impact on grain trade worldwide. If those economic factors weren’t enough, the relentless COVID outbreaks which seem to pop right when another starts to get reeled-in is working only to muddy the “market water” even more. If these components can’t stabilize in the near future, the global commodity markets may be in for a relatively volatile year.

The Futures market is already supporting volatile expectations as rough rice prices eroded further. Declining prices, and rising volume, and open interest normally point to a weak market. In this sense, the futures market actually reflects what is being seen on the ground, where buy interest is weak at best which is only working to demotivate sellers from engaging the market. The reduced output in 2021 may work to reverse the current sentiment, but with the crop having just been planted, that may take a little while.

USRPA's Digital Marketing Campaign in Guatemala Continues to Grow

Begining in 2020 USRPA and ARROZGUA have had to find new and innovative ways to teach Guatemala's population how to prepare delicious and diverse dishes using U.S. rice.  

USA Arroz's Digital Campaign started in April 2020 with 340 followers on its Facebook fan page and has since increased 789%! The page currently has over 5,000 followers, surpassing the fan page followers of renowned chefs and influencers. 

Supermarkets have reported an increase of 18% in rice sales in the last 8 months, and that trend continues to increase as just last month, local supermarket chains in Guatemala reported a sales increase of 23% in comparison to the previous year. Digital Campaign activities in Guatemala currently combine 3 broadcast channels: radio (RCN Radio Group), Television (TVQtv), and two digital platforms: ZOOM and Facebook Live, which are directly reaching a large and very diverse audience spanning several target groups.

The Rice Industry Loses a Historical Icon

The global rice industry has lost a dear friend, Yuanlong Ping, a Chinese scientist who developed higher-yield rice varieties that helped feed people around the world passed away at the age of 90 in China on May 22, 2021.

In honor of his great achievements and dedication to feeding communities suffering malnutrition and starvation worldwide, Dwight Roberts recalled at a meeting with him when he was visiting the U.S. rice states in early years, “Yuan Longping was a real rock star. Known as the Father of Hybrid Rice, he developed rice varieties that helped feed the world. When I met him 20 years ago I realized he was the 'Babe Ruth' of world food production, a real celebrity.”

Yuan spent his life researching rice and was a household name in China. Worldwide, a fifth of all rice now comes from the species created following Yuan’s breakthrough discoveries, according to the website of the World Food Prize, which he won in 2004. 

On Saturday afternoon, large crowds honored the scientist by marching past the hospital in Hunan province where he died, local media reported, calling out phrases such as: “Grandpa Yuan, have a good journey!” USRPA offers the deepest condolence to him and his family. May he rest in peace and joy and generations of rice folks will follow his generous heritage and footsteps, his lifelong endeavor to benefit the welfare of the world.

Pictured (left) Dwight Roberts with Yuanlong Ping (right).

Texas Congressman Mike Cloud Meets Rice Farmers

Representing the 27th District of Texas, Congressman Mike Cloud paid a visit to Franz Farms near Inez, Texas this week to gain a better understanding of rice farming on the gulf coast. Despite heavy rains, the weather opened up enough to visit some rice fields and have a thorough discussion of the domestic and international issues that affect district farmers. Representative Cloud was particularly interested in the markets of Mexico and Central America, the most important for all long-grain farmers. 

Galen Franz, Chairman of the Texas Rice Research Foundation, board member of the USRPA, the Texas Rice Council, the Texas Rice Producers Board, and the Texas Rice Legislative Group, graciously hosted the visit. Tommy Turner, President of the Texas Rice Council and member of the USRPA board, along with Thomas Wynn, Chairman of the USRPA and owner of Coastal Rice Futures and Coastal Warehouse also participated in the meeting. 

These farmers expressed their concerns over the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), commonly known as TPP that creates deep concerns about the duty-free access to the Mexican market by Vietnamese rice after the phase-in process. 

The CAFTA-DR agreement with Central America and the ability of the U.S. to maintain a strong presence was also discussed. And the Texas rice leadership informed Representative Cloud that it is no secret that rice is one of the world’s most manipulated crops as competitors’ governments use interventionalist policies that in many cases are NOT legal under WTO rules. Rep Cloud was especially interested in trade issues with Mexico as he was appointed a member of the US-Mexico Interparliamentary Group, a committee formed by congressional members of both countries that address issues of trade, security, and immigration.

Pictured Left to Right: Tommy Turner, Congressman Cloud, Galen Franz, Thomas Wynn
Pictured left is Mark Longoria, District Director from Congressman Michael Cloud's office, speaking with Vernie Hubert (right) of Cornerstone Government Affairs.
Congressman Cloud in discussion with Texas Rice Council President, Tommy Turner

Volume 18, Issue 20

May 21, 2021

In This Issue:

Washington DC Update

On Wednesday, May 19th, the U.S. Department of Agriculture announced the appointment of Meryl Harrell as Deputy Under Secretary for Natural Resources and Environment (NRE) and the appointment of Terry Cosby as Chief of the Natural Resources Conservation Service (NRCS). They will begin their positions on Monday, May 24.

Meryl Harrell most recently served as the Executive Director of the Southern Appalachian Wilderness Stewards. She has also served as a consultant, advising non-profits, foundations, and government agencies working to conserve America's public and private working lands. During the Obama-Biden Administration, Harrell spent eight years in the Office of Natural Resources and Environment at USDA, including serving as Chief of Staff and then Senior Advisor to the Under Secretary. Harrell previously worked on public lands issues at The Wilderness Society in Washington, D.C.  Harrell is a graduate of the Yale Law School, where she studied environmental law.  Harrell is originally from New Jersey and more recently based in Atlanta, Georgia.

Terry Cosby began his career with USDA in 1979 as a student trainee in Iowa. Cosby was raised on a cotton farm in Tallahatchie County, Mississippi. The farm, now in his family for three generations, was purchased by his great-grandfather in the late 1800s. Cosby has served over 42 years with the agency in numerous capacities, most recently, Acting Chief of NRCS and State Conservationist for Ohio. Prior to serving as Ohio State Conservationist, he served in leadership positions in Iowa as an Area Resource Conservationist, in Missouri as an Assistant State Conservationist for Field Operations and Idaho as a Deputy State Conservationist.  Cosby holds a Bachelor of Science degree in Agriculture Education from Alcorn State University, the first Black land grant college established in the United States.

Volume 18, Issue 18

May 7, 2021

In This Issue:

Volume 18, Issue 19

May 14, 2021

In This Issue:

Jewel Bronaugh’s nomination as Deputy Secretary of Agriculture is cleared for Senate floor consideration

On Monday, May 13th, U.S. Senators Debbie Stabenow (D-Mich.), Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, and John Boozman (R-Ark.), Ranking Member, announced that the Committee had voted by voice vote to advance the nomination of Dr. Jewel H. Bronaugh to serve as Deputy Secretary of Agriculture. Dr. Bronaugh may now be considered by the full U.S. Senate for confirmation.  Bronaugh is currently serving as the Commissioner of the Virginia Department of Agriculture and Consumer Services.  Previously, the Senate Agriculture Committee held a hearing on Bronaugh’s nomination on April 22, 2021.

Currently, there are several other nominees awaiting committee consideration:

Robert Bonnie has been nominated for Undersecretary for farm production and Conservation Programs.  Bonnie served as the co-chair of the Biden Administration’s USDA transition team.  Bonnie has also been the vice president for land conservation at the Environmental Defense Fund.

Janie Hipp has been nominated for USDA General Counsel.  Hipp is currently the CEO of the Native American Agriculture Fund and was founding director of the Indigenous Food and Agriculture Initiative at the University of Arkansas.  Hipp served in the Obama administration and served on Biden’s transition team.

Jenny Lester Moffitt has been nominated for Undersecretary for Marketing and Regulatory Programs.  Moffitt currently serves as undersecretary at the California Department of Food and Agriculture.  Prior to her tenure at the CDFA, Moffit was involved with a family organic walnut farm and processing operation. 

Currently, Secretary Vilsack is the only Senate-confirmed Biden administration official at USDA.

Tax Reform

The House of Representatives Committee on Ways and Means held a hearing this week which included a variety of tax proposals. The House Ways and Means hearing  focused on Biden’s tax proposals.  According to an analysis of Biden’s tax proposals by the Tax Foundation the Biden proposal to tax capital gains at death accounts for about one-third of the revenue to pay for the Administration’s American Families Plan, a sweeping package of education, health and child care benefits.  The tax on inherited assets would raise $213 billion over 10 years. The revenue impact increases by year, reaching nearly $40 billion in 2031.   Three issues receiving much focus by agriculture groups are--

Stepped-Up Basis: Assets in agriculture are typically held by one owner for several decades, so resetting the basis on the value of the land, buildings, and livestock on the date of the owner’s death under a step-up in basis is important for surviving family members and business partners to ensure the future financial stability of the operation.

Like-Kind Exchanges: Allows businesses to buy and sell like assets without tax consequences, thus helping farmers and ranchers, who are typically “land rich and cash poor,” maintain cash flow and reinvest in their businesses.

Sec. 199A Business Income Deduction: Preserving Sec. 199A business income deduction in order to maintain a reasonable level of taxation for pass-through businesses.