| The market has been cruising along without significant change; with so much happening on a geopolitical front, this is no surprise. As a result, we will focus on planting intentions for the coming year and a GAIN update on what the Dominican Republic is doing to protect its rice industry from U.S. competition under CAFTA-DR. To begin, planting intentions for the 2025 crop are very much in line with expectations from 2023 and 2024 (with 1%), but up over 20% from the 2022 crop. All in numbers at this stage of the game for both medium and long grain plantings rest at 2.888 million acres. With the reality of seed availability plaguing some long grain plantings, and a precarious water situation on the West Coast, it is believed that the odds are better for acres to decrease rather than increase by the time it’s all said and done. Several key market analysts are predicting a reduction in long-grain acres as high as 300,000 acres. Next week the USDA’s 101st Agricultural Outlook Forum (usda.gov) is expected to shed light on the situation and the overall market conditions for farmers. To break it down a bit further, of the 2.888 million acres, 2.202 million acres are projected for long grain and 686 thousand acres for medium grain. |
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| Looking down the barrel at a crop of similar size, we can only hope to see favorable growing conditions that result in a higher quality crop than this year. This is increasingly important with cheaper options from the eastern hemisphere, as well as the DR moving to protect its rice industry from U.S. competition under CAFTA-DR. The Gain Report shows that on December 17, 2024, the DR issued a decree to limit its rice imports into the country. The Decree establishes a quote of 23,300 metric tons for U.S. rice subject to a 0% ad valorem tariff. Then, the next 17,810 MT of U.S. rice is subject to a 20% ad valorem tariff. Any U.S. rice over these two quotas will face a 99% tariff. This obviously will harm our ability to supply this market, but to quantify the impact, we see that the DR’s annual rice consumption is appx 650,000 MT. In 2024, 113,596 MT was imported. Of these imports, 46% (52,414 MT) was of U.S. origin, 34% (38,561 MT) from Brazil, and 12% (13,805 MT) from Uruguay. This means that if 2025 is a repeat of 2024, the first 23,300 MT at 0% is fine, the next 17,810 MT is questionable, and the remaining 11,304 MT is certainly lost. The economics of rice farming are becoming increasingly difficult, and that is ever-present on the minds of farmers who can entertain a crop rotation or alternate crops. There is continued reliance on an updated farm bill, but that can’t quell the need for a long-term solution to the quality problem that has been plaguing U.S. rice. We look forward to future reports that can hone in on actual planting data to help clarify the expectations for the coming marketing cycle. Today’s USDA export sales report will be closely observed for any indication of demand. |
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