Happy Anniversary to the US Rice Producers Association!

Rice Farmers Ready for 2021!

Today, December 18, 2020, marks the 23rd anniversary of the founding of the US Rice Producers Association. Today it’s impossible to not think of Mr. Jack Wendt, a Texas rice farmer and former President of the US Rice Council that was based in Houston, Texas, and a man who traveled the world promoting U.S. grown rice. He also made his share of trips to Washington, D.C. to remind Capitol Hill of the contribution made by rice farmers to our national food security in his genuine effort to feed the world.

While Jack grew more than 60 rice crops, he was an original member of the USRPA board of directors. Respected and known by everyone in the U.S. rice industry, Mr. Wendt played an instrumental role in the development of those original by-laws dated December 18, 1997. The same principals installed by Jack in 1997 ring true today- an organization comprised of producers, elected by producers, and representing rice producers in all rice-producing states.

The new rice association was told at the time the effort would never materialize, considered a group of “rebel farmers” who will not last. Someone forgot to tell folks like Mr. Wendt, Raymond Franz, Hal Koop, Sonny Martin, Penn Owen and Rex Morgan apparently. These gentlemen stood by their principals and always spoke as if 1,000 rice farmers were listening over their shoulders. Just like Ray Stoesser!

Over the years change became inevitable and while the USRPA developed unique relationships with the most important markets and the buyers for long-grain rice, it is satisfying to know that these men had so much to do with our current day leadership in the US rice industry.

Comments written last month by the leadership of the USA Rice Federation apparently confirm what these men knew all along.

“All of those issues are long gone and most of the people involved are not around anymore.”

“The leadership on the USA Rice board & committees has changed and the attitude and philosophy has changed.”

“That might have been the case 20 years ago and now is far from the truth.”

Looking back over the past 23 years, this has to be the biggest accomplishment of the USRPA- raising awareness and creating change for the better.

Congratulations to all of you who have been involved in this process and continue to represent rice farmers. 2021 will bring new challenges but like has been the case for the past 23 years, they will be met. After all 2020 has taught us that farmers are officially “essential.”

To accommodate the global travel restriction and adapt to rapidly developing cloud technology, USRPA held its first public virtual event via Zoom in China on Wednesday 10 am -12 pm, August 26th, 2020 (US Central time is Tuesday, August 25, 9-11pm). 

The educational seminar on US rice was the first of a series virtual events that benefit both international rice buyers as well as US companies that are particularly interested in expanding their global markets.     The seminar attracted dozens attendees in China which primarily consist of rice importers, food processors and Chinese rice industry leaders. This 2 hour event began with a presentation on the latest US rice market and different topics presented by renowned industry speakers followed by a Q&A session. USDA FAS has also accepted the invitation was one of the guest speakers.  

China is open to US rice thanks to the efforts of USRPA, the first rice organization to venture into this market. After the successful completion of trade mission in China in 2019, USRPA continues to monitor the market, communicate to trade contacts and plans to conduct promotional programs.

House Agriculture Appropriations Holds a Member Day

On Thursday, the House Appropriations Committee Agriculture Subcommittee held a member day where members of the House of Representatives not on the Committee could voice their input on the USDA budget request for FY2025. During the event, Democratic members emphasized the importance of investing in nutrition programs. They were supportive of the requested increase in funding for the WIC program. Also discussed during the event was research in precision agriculture and its potential to improve production efficiency.

Rep. Tom Cole Elected Chairman of the House Appropriations Committee On Wednesday, the House Republican Conference elected Rep. Tom Cole (R-OK) to be chairman of the House Appropriations Committee. Rep. Cole will fill the role currently held by Rep. Kay Granger (R-TX), who announced she would be stepping down after the FY2024 bills were completed. Rep. Granger will also be retiring at the end of this year after serving since 1997. Rep. Cole previously served as the chairman of the Departments of Transportation and Housing and Urban Development Subcommittee. 

A lot is happening on the ground with planting underway across most states. The April 1 Crop Progress report gives a solid indication of where things are at kicking off the second quarter. Louisiana is far and away the leader of the pack, with 51% registered as planted as of March 31. Texas follows with 32%, Arkansas with 3%, Mississippi with 1%, and Missouri and California both still at 0%. Rice emerged is right on pace with last year, with Louisiana coming in at 38% and Texas at 14%.

The prospective planting report also came out over the Easter holiday, and pegs total acres at 2.931 million. This is broken down with 78% of the crop being long grain, 21% being medium grain, and 1% registering as short grain. Overall, this is very close to industry expectations, though most expect acres to crest 3 million by the time planting is done. The milled market has been steady without any fireworks. The problems on the horizon are the gangs in Haiti and Iraq’s lack of access to the U.S. dollar to procure U.S. rice. Prices on the ground in Arkansas, Mississippi, and Missouri are $17.50/cwt if there’s anything left in first hands. Louisiana is at $18.52/cwt, and Texas is at $19/cwt. A recent GAIN report on Peru shows that rice imports in 2024/25 are forecast at 100,000 metric tons. Uruguay was the primary supplier in 2023, accounting for 52% of the market share, with Brazil following at 39% market share. U.S. rice has been priced out of the Peruvian market in recent years, but a strong supply creates the opportunity to access this market again. A challenge for U.S. rice is grain quality particularly cooking quality as consumers are considered the most demanding in the Americas. Rice is a staple food in Peru, with per capita consumption coming in at 163 pounds per year. That puts total consumption stable at 2.7 MMT in 2024. A GAIN report on Saudi Arabia was also released. Saudi Arabia is unique because it produces no rice of its own and procures both medium grain and long grain (largely parboiled) from the United States. The growing tourist economy means that U.S. rice exports are targeted for growth in the coming years. From this year to last year, consumption has increased by 6% on account of increased tourism and a growing labor force, up to 1.6 MMT. Proximity, price, and a preference for Basmati make India the largest supplier of rice to Saudi Arabia with at least 75% of the market share. Pakistan is second, and the United States is third with 6%. Post expects U.S. rice exports to Saudi Arabia to reach 100,000 MT by the end of the year. The weekly USDA Export Sales report shows net sales of 112,700 MT this week, down 82% from the previous week and 36% from the prior 4-week average. Exports of 51,300 MT were down 62% from the previous week and 53% from the prior 4-week average.

Rice is a delicious food, consumed in many low-income countries where nutritional insecurity is known to be high. Thus, guaranteeing a sustainable production of nutrient-dense rice kernels is seen as a pivotal solution that will contribute to ensuring food and nutrition security for a global growing population. This session will present a new landscape of dietary intake in 8 Latin American countries, discuss the established and emerging nutritional deficiencies in the region, and highlight the advancements in cost-effective nutritional solutions within the rice industry. About the SpeakerMaría Fernanda, a Brazilian Nutritionist, holds a master's degree in public health and a PhD in Nutrition Science from the University of Sao Paulo. She mentors the Sustentarea project at the same university and is a member of the Sustainability Committee of the Brazilian Food and Nutrition Society. María works as the Lead Scientist and Sustainability Champion at DSM Health, Nutrition & Care in Latin America. With over 20 years of experience in the nutrition and health market, she also has certifications in Marketing, Lifestyle Medicine, and Business Improvement through a Culture of health. Register Today

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House Agriculture Committee Holds a Hearing on Chinese Influence in Agriculture On Wednesday, the House Committee on Agriculture held a hearing titled “The Danger China Poses to American Agriculture.” During the hearing, there was bipartisan concern over the impacts of Chinese influence on U.S. agriculture and national security. Members of both parties agreed on the importance of remaining competitive in the global agricultural market. Republicans focused on the variety of threats China poses to the U.S., including intellectual property theft, cybersecurity attacks, and the acquisition of farmland by foreign interests. Democrats warned that policy decisions may inadvertently impact the Asian American community and that aggressive tariffs could have negative impacts on the U.S. and its trading allies. Other topics discussed include trade promotion programs within the Department of Agriculture (USDA), the farm, and potential improvements to the tracking and reporting system for land purchases. A recording of the hearing can be found here. Secretary Vilsack Testifies on the FY2025 Budget On Thursday, Secretary of Agriculture Tom Vilsack testified before the House Agriculture Appropriations Subcommittee on the USDA budget request for fiscal year (FY) 2025. During the hearing, Republicans expressed concern over the total spending level requested, which is roughly $3 billion over the FY2024 enacted level. They were also concerned about the Secretary’s use of the Commodity Credit Corporation and the use of SNAP benefits to purchase unhealthy foods. Democrats were dissatisfied with the lack of Democratic input in the FY2024 process and were supportive that the request included a funding increase for the WIC program. There was agreement in the hearing among the parties on the importance of USDA’s role in protecting food security and supporting rural development. A recording of the hearing can be found here.

The focus for farmers is planting. Texas and Louisiana are underway, but fields in Arkansas, Mississippi, and Missouri are being prepped. California is still waiting out the spring weather with another storm expected through the weekend. Texas has passed 30% planted. Prices for paddy have remained firm, even as the milling activity has quieted down a bit. Domestic business remains, but trouble in Haiti has the potential to snarl up the flow of exports in the coming weeks. A recent GAIN report for Mexico offers hope for a return to historical norms in the Mexico-U.S. rice relationship. Mexico’s imports of U.S. rice increased from Oct-Dec 2023 by 406% compared to the previous year! Recall that a significant market share was lost to Brazil post-COVID, where Oct-Dec 2022 recorded only 47,554 MT, compared to the new 240,576 MT. In the same period, imports of Brazilian rice decreased from 174,534 MT to 32,109 MT, or an 82% reduction. This is great news for the U.S. rice industry as we look down the barrel of the largest crop in years. Post forecasts total rice production in Mexico for MY2024/25 at 233,000 MT, an increase of 7% from last year. Post’s milled production estimate for MY2023/24 is 150,000 MT, a 5% increase over the previous year. Imports are anticipated to increase by 2%, up to 840,000 MT, where the U.S. is expected to be the largest supplier. 80% of Mexico’s imports are paddy, and most of that comes from the U.S. Of the remaining 20% of milled rice, Uruguay is the largest supplier. We should point out that the Mercosur harvest is struggling to get into full swing, hampered by excessive rains and flooding in some key areas. Reports of lodging in Brazil have been frequent. Export prices in Brazil hover around $420/ton FOB Rio Grande do Sul. Numerous buyers in Mexico and Central America have been “waiting on lower prices due to the Brazilian harvest.” However, as of this writing, there is no clear path forward. At the same time, several vessels have been recently booked destined for Mexico and Central America. The general feeling is that field yields will be off. As in recent years, the weather is driving the market in many corners of the hemisphere with its effect on milling yields, grain quality in addition to field yields. No two years are alike… The resurgence of Mexican demand is welcomed news in the face of emerging problems in trade with Iraq. In Q4 2023, an announcement said that Iraq was to end all trade based on the USD on Jan 1, 2024, to curb ties with Iran. When this happened, the rice industry wasn’t quite sure what to expect. The MOU and business relationship has been a saving grace for the U.S. rice industry in recent years, and losing that outlet as a result of a geopolitical dispute would be the most recent of a long list of problems. What is now coming to light is that Iraq not being able to trade via the U.S. Dollar essentially halts (ie: prohibits) their ability to purchase U.S. rice, therefore rendering their MOU DOA unless some form of diplomacy can find a solution. This means that the business already on the books is safe, but any future tender will have to deal with this additional complication. Never a dull moment… In Asia, the market seems to be “resting” with Thai prices hovering around $600 pmt and Viet prices just below $595 pmt. India’s export ban is still in place, but steady shipments to W. Africa remain via G2G deals. We mentioned last week and will continue to say that these “exception exports” are good for market stabilization. When India does officially open back up after their elections, the shock to the market will be muted because of the steady stream of exports that have been making it out the door as G2G exceptions. The weekly USDA Export Sales report shows net sales of 142,100 MT this week, up noticeably from the previous week and the prior 4-week average. Increases were primarily for Colombia (44,000 MT), Mexico (31,100 MT), Japan (26,000 MT), Honduras (13,200 MT), and Haiti (7,100 MT). Exports of 106,400 MT were up 19% from the previous week and 12% from the prior 4-week average.

USDA and EPA appropriations bills signed into law On Saturday, President Biden signed into law a six-bill appropriations package containing the funding bills for both the Department of Agriculture (USDA) and the Environmental Protection Agency (EPA) for fiscal year (FY) 2024. The bill included about $26.3 billion in discretionary funding for USDA and included $1,000,000 for the Texas A&M Agrilife Extension Service for a project on water-smart rice in Texas. This project was requested by Rep. Michael McCaul (R-TX). For EPA, the bill includes $9.2 billion in funding. It also directs EPA to consider the best available science when implementing regulations for pesticide licensing and directs EPA to brief the Appropriations Committees on potential revisions to its pesticide rule regarding plant-incorporated protectants (PIPs). It also directed EPA to brief the Appropriations Committees on how the Agency is complying with the recent court decision on its chlorpyrifos rule. The bill text for the appropriations package can be found here. The explanatory report for USDA can be found here and the explanatory report including EPA can be found here, with the EPA section beginning on page 34. White House releases 2025 Budget Request On Monday, the White House sent Congress its FY2025 budget request. In total, the budget requested $7.3 trillion in spending across the federal government, an increase of 5.6% over the FY2024 budget request. The budget requested $29.2 billion in funding for USDA and $10.994 billion for EPA, both increases over FY2024 levels but less than what was included in the President’s FY2024 budget request. The budget also outlined the Administration’s priorities for the next farm bill, which included protecting and enhancing investments in conservation programs and opening new market opportunities for U.S. producers. It also includes support for improving the crop insurance program to help producers proactively protect against risk. It also outlined tax proposals to increase revenue to offset the increases in spending, including recommendations to allow the step-up in basis and estate tax provisions to expire at the end of 2025. The full budget request can be found here. The budget request for USDA can be found here and the EPA budget request can be found here.