| Last week we speculated that the WASDE report might significantly lower ending stocks. The stocks were lowered, but not by as much as the industry might speculate. Ending stocks were reduced by 1 million cwt down to 41.5 million cwt, which is still 37% higher than last year. All rice exports were raised by 1 million cwt to 88 million cwt, comprised of a 3 million cwt increase of long grain exports offsetting a 2 million cwt decline of medium/short grain exports. The long grain average price was raised $0.10/cwt up to $16.10, medium/short was raised $0.50/cwt to $18.00, and the California medium grain was raised by $2.00/cwt up to $32.00. The March Food and Agriculture Organization Rice Price Update shows that the all rice price index averaged 140.5 points in February 2024, 1.6% below January, but 12.3% higher than this time last year. Throughout February, Indica prices remained fairly stable, falling only 1.4%, while fragrant rice popped by 2.7%. The report states that Japonica prices were stable, and there will be a revision in that analysis in their April update as medium grain varieties have seen a more drastic decline in the last 30 days. Prices for long grain softened the most in Vietnam in light of fresh supplies from their harvest even though they won a significant portion of Indonesia’s tenders. All in all, the long grain market has been relatively steady in the last month when one considers the market volatility that we’ve become accustomed to since India’s export ban. On the ground, pricing remains strong in the spot market when rice can be found. Mississippi is reporting in at $18/cwt, and is expected to begin planting sometime in late March or early April. Texas is well underway, certainly over 10%, and essentially out of cash rice for the spot market. Louisiana is just getting underway with the new planting season, perhaps just broaching the 10% seeded mark. Like Texas, there is not much old crop to be found, with prices around $18.52/cwt. Arkansas and Missouri both sit at $18/cwt over loan, and planting is just around the corner. The weekly USDA Export Sales report shows net sales of 43,800 MT this week, down 48% from the previous week and 46% from the prior four-week average. Increases primarily for Mexico (37,600 MT), Saudi Arabia (8,600 MT), Japan (6,000 MT), Honduras (5,000 MT), and Canada (1,100 MT, including decreases of 100 MT), were offset by reductions for Jordan (14,000 MT), Guatemala (700 MT), Haiti (500 MT), and El Salvador (300 MT). Exports of 89,600 MT were down 12% from the previous week and 7% from the prior 4-week average. The destinations were primarily to Mexico (44,300 MT), Haiti (27,300 MT), Saudi Arabia (9,900 MT), South Korea (3,400 MT), and Canada (1,900 MT). |
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 Dennis DeLaughter: What Could Possibly Go Wrong Now? At last year’s Rice Market & Technology Convention, we asked the question: What could possibly go wrong? While we were right on many issues outside mainstream expectations, the last 12 months have seen some major changes in the world of rice that were not on anyone’s radar. That brings us to ask the question this year: What could possibly go wrong now? This year’s presentation will review the past year, look at the present economic conditions facing U.S. rice producers, and check our radar screens once again to see what we may be missing in 2024 in the ever-changing world of rice. About Dennis DeLaughter Dennis DeLaughter, a professional farm manager, investment advisor, and commodity broker, operated and managed over 5000 acres of rice, corn, and wheat along the Texas Gulf Coast, southwest of Houston for over 40 years. He was a licensed floor trader on the Chicago Board of Trade and a frequent speaker at agri-business marketing meetings throughout the U.S. rice belt and the Midwest grain growing region. Specializing in commodity hedging and market analysis service for trading strategies, DeLaughter has served by appointment from the U.S. Secretary of Agriculture on the Agricultural Technical Advisory Committee during the Clinton, Bush, Obama, Trump, and Biden administrations. He is vice president of the Texas Rice Council and the former chairman of the US Rice Producers Association. A graduate of Texas A&M University, he holds an MBA from A&M with an undergraduate degree in Agricultural Economics. Register Today & Save $200! |
| Congress Passes First FY2024 Appropriations Package This week, Congress passed 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, which is roughly equal to the amount provided in FY2023. The bill also includes $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, a $232 million decrease from the FY2023 level. It also directs EPA to consider the best available science when implementing regulations for pesticide licensing. It directs EPA to brief the Appropriations Committees on potential revisions to its pesticide rule regarding plant-incorporated protectants (PIPs). It also directed the EPA to brief the Appropriations Committees on how the Agency complies with the recent court decision on its chlorpyrifos rule. The bill passed out of the House on Wednesday. The Senate is expected to vote on the bill before a partial government shutdown begins on Saturday, March 9. 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. House Agriculture Committee Releases Report on Labor Policy Recommendations On Thursday, the House Agriculture Committee’s bipartisan Agricultural Labor Working Group released its final report outlining policy proposals to address the workforce challenges facing the agricultural sector. The report follows the November release of the interim report which outlined the issues in industry the working group identified through stakeholder outreach conducted throughout 2023. Policy proposals recommended in the report include improvements in how the Adverse Effect Wage Rate is calculated, ways to streamline the H-2A temporary agricultural worker program’s application and review process, and a change to the H-2A program to make it available year-round. In addition, the report called for research on the H-2A program to better inform future policymaking. A copy of the report can be found here and a copy of the interim report can be found here. |
| It never ceases to amaze how quickly planting sneaks up each year, but we are officially underway for the new crop growing season. While we don’t have an official Crop Progress report from the USDA, it would show its first percentages in Texas and even Louisiana. On the other hand, California still has weeks to go before its first plantings, and they could be delayed even further if the wet spring weather continues. Ground work is underway where available, and expectations for a large crop are not hampering current price expectations in the long grain market. Today’s USDA Supply/Demand Report (WASDE) is scheduled to be released at 12:05 pm ET. The February WASDE report lowered the 23-24 carryover stocks 1 million cwt to 23 million. The average price at $16 was unchanged. The main question in today’s report will be about demand and if carryover is lowered significantly. The report can be found here later today. When looking at prices on the ground, pricing is firm in all markets except California medium grain. It is a truly rare day when we see U.S. #2 long grain milled rice going for the same price as U.S. #1 California medium grain, but here we are; both varieties are priced at $800 pmt. The return to a normal size crop of 500,000 acres in California has doubled the supply in a time when selling to the Middle East was a must. However, the logistical snarl resulting from the Houthi pirates has severely hampered Calrose distribution and therefore pricing. All that to say, we would caution any speculative medium grain plantings in the south this year. Long grain prices remain firm both on the ground and in the export market. Rice in first hands in Texas is all but gone, while Louisiana remains just north of $18.50/cwt. Mississippi, Arkansas, and Missouri are all trading between $17.75-$18/cwt. To add more context to the situation to the price drop in California, it is difficult to even find a cash bid at $14/cwt over loan. Last year, cash prices were as high as $36/cwt over loan, and with several million cwt still in first hands in California with no current cash market, it will be a long summer for cash sellers. Prices continue to be strong in Asia, with the most recent Indonesian tender finally finding a partner in Thailand. As a result, Thai prices bounced up about $10 pmt this week to $625 pmt, where Viet pricing is now hovering at $600 pmt. As for India, the elections are set for next month, and the Viet/Thai prices could look much different if it weren’t for the Indonesian purchases that have continued to breathe oxygen into the market. Indian rice export policy post-election has the power to deflate global prices or keep them afloat; we shall see. We would argue, however, that India’s G2G export exceptions actually help bring balance to the market and will be an aid to “breaking the fall” when the export ban is lifted. The weekly USDA Export Sales report shows net sales of 84,600 MT this week, up 39% from the previous week, but down 4% from the prior 4-week average. Increases were primarily for Japan (17,900 MT), Mexico (15,400 MT), Haiti (13,500 MT), Guatemala (10,000 MT), and Honduras (10,000 MT). Exports of 101,600 MT were up 5% from the previous week and 12% from the prior 4-week average. The destinations were primarily to Panama (33,000 MT), Venezuela (27,500 MT), Japan (15,700 MT), Guatemala (7,200 MT), and Mexico (6,400 MT). |
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| The Missouri Rice Research & Merchandising Council celebrated its 40th anniversary on Tuesday during its Annual Meeting in Poplar Bluff. A panel consisting of Dr. Michael Aide, BJ Campbell, Dr. Justin Chlapecka, and Alex Clark discussed the history of the Council, recounting the organization's early days and discussing the future of the Missouri Rice industry. The program also included Council financial and research updates, and an update from US Rice Producers Association. |
 The panel discussed the past, present, and future of the Missouri Rice Council. |
 At the end of the program, the Council presented Dr. Michael Aide with a plaque commemorating his 35+ years of service to the Missouri Rice Council and naming him an honorary council member. From left to right: Eric Hover, Zach Tanner, Alex Clark, Rance Daniels, Dr. Michael Aide, David Martin, Daniel Eddy, Mitchell Thomas, Justin Wheeler, and Chris Berry. |
| Secretary Vilsack Testifies Before the Senate Agriculture Committee On Wednesday, Secretary of Agriculture Tom Vilsack testified before the Senate Agriculture Committee. Republicans and Democrats agreed on the importance of passing a bipartisan farm bill to provide stability for producers and the agriculture sector. Republicans were concerned about high input costs and inflation as well as stagnant commodity prices while Democrats called attention to the impacts of nutrition and conservation programs and the need to protect their funding. Other topics discussed in the hearing included California’s Proposition 12, the Secretary’s use of the Commodity Credit Corporation, protecting small and medium-sized producers, and the agricultural trade deficit. This hearing was the second time Secretary Vilsack testified before Congress recently, as the House Agriculture Committee held a hearing on February 7. A recording of the hearing can be found here. |
| The market is moving forward in a firm direction, albeit without any significant changes. The domestic millings are strong, making it difficult to even procure rice for new or export customers. We have been noting for weeks the coming harvest in South America and the increased competition, but the expectation of a shorter crop and the continued strong demand is putting a bit more strength in the futures market than initially expected. It will be interesting to see how it plays out once harvest is officially underway, but signals as of writing are that prices may not soften much. Harvest has begun in Uruguay, Argentina, Paraguay, and Brazil, but not in earnest or with enough results to provide any actionable intelligence at this point. Weather-related incidents throughout the growing season have resulted in a late maturing crop with inconsistent field yields reported. Prices on the ground are strong too, when demand surfaces. It is getting more and more difficult to find available supplies in Texas, but prices are reported as high as $19/cwt right now. Louisiana is firm at $18.52/cwt. Mississippi, Arkansas, and Missouri are all at $18.00-$18.25/cwt. When taken together, the current cash price, the pace of exports, and a smaller crop in South America are making a strong case to plant rice this year. Our surveys indicate a little rice has already been put in the ground in Texas ahead of schedule, but that is the outlier. We are still expecting a crop that exceeds 3 million acres this year. A few fields along the Gulf Coast have been planted during the last days of February as usual to hopefully obtain a good ration crop yield. In the global marketplace, Asian prices are officially softening, with Vietnam's dropping below $600 pmt for the first time in several months to $590 pmt. Thai prices remain above the $600 mark but have dropped down to $620 pmt this week. At first glance, this could be taken as a foreshadowing of the easing of the Indian export ban, but upon further inspection, the softening is more a result of new supplies becoming available. Indonesia will be coming to market for another sizable tender in the coming weeks, which is expected to buoy prices back up. The spread is once again widening in comparison to U.S. long grain, where prices have now reached $800 pmt for USA 5%. Reports of Thai bulk rice vessels headed to Mexico are rumored to be sold at $710 CIF Veracruz if not lower. The weekly USDA export sales report shows net sales of 60,900 MT this week, up noticeably from the previous week, but down 27% from the prior 4-week average. Increases primarily for Mexico (21,400 MT), Haiti (15,300 MT), the Dominican Republic (12,200 MT), Venezuela (6,300 MT), and Canada (2,100 MT). Exports of 96,800 MT were up 6% from the previous week and 18% from the prior 4-week average. The destinations were primarily Mexico (28,200 MT), Venezuela (25,800 MT), Honduras (21,700 MT), Haiti (15,300 MT), and Canada (2,700 MT). |
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