USRPA signs on to support estate tax repeal
This week, USRPA signed on to a letter to Senator John Thune (R-SD) thanking him for supporting family-owned businesses and farms by introducing the Death Tax Repeal Act of 2023, which would eliminate the estate tax. A copy of the letter can be found here.
Senate votes to repeal WOTUS Rule
On Wednesday, the Senate voted to overturn the Environmental Protection Agency’s rule regulating the waters of the United States (WOTUS) on a 53-43 vote. Sens. Joe Manchin (D-WV), Jacky Rosen (D-NV), Catherine Cortez Masto (D-NV), Jon Tester (D-MT), and Kyrsten Sinema (I-AZ) joined the Senate Republican Caucus on the vote. The measure passed in the House in March and will now be sent to the President’s desk. President Biden is expected to veto the measure and the Senate will likely not have the votes to overturn the veto.
Secretary Vilsack testifies before Congress
This week, USDA Secretary Tom Vilsack testified before the House Agriculture Committee as it prepares for the upcoming farm bill. He also testified on President Biden’s budget request for the fiscal year 2024 before the House and Senate Agriculture Appropriations Subcommittees. Throughout these hearings, members questioned the Secretary on USDA’s reevaluation of the Thrifty Food Plan which resulted in increases in spending for nutrition programs. Members also emphasized the importance of a strong farm safety net and disaster relief.
| The United States Trade Representative (USTR) made it very clear this week that trade agreements and tariff cutting are not on the Biden trade agenda. While this news is not new, it is a stark abandonment of one of the most effective tools the rice industry and the entire U.S. agricultural complex can utilize to compete in a global market. This is especially poor timing given the expiration of the CAFTA-DR trade agreement that has been fundamental in the structure of the importation of U.S. rice into Central and South America. A report this week put to rest any hope the agricultural interests have when U.S. Trade Representative Katherine Tai stated, “At this moment we do not have tariff liberalization negotiations going on with a partner.” The USRPA still strongly believes that trade agreements need to be pursued, because “free trade” doesn’t mean “fair trade,” and when other governments are over-subsidizing rice production, it puts the U.S. industry at a disadvantage. The expiration of CAFTA-DR isn’t the only obstacle that the U.S. rice industry is facing, nor is it the only reason that exports have cratered nearly 40% this year. Another impact that has helped create this perfect storm is the policies many of our key export markets implemented to protect their citizens against soaring food inflation. These key markets in the Western Hemisphere, Mexico and El Salvador to name two, removed tariffs on rice imports to minimize the impact of food inflation, thereby putting the U.S. at a disadvantage. Add this to a politically volatile climate in Haiti, our key milled export market, and it’s no wonder exports have slumped. The smaller crop over the last three years has oddly helped this predicament, but with a new and larger crop expected this year, there is still hope for a positive outcome. Turning to that optimism and planting of the new crop, cold weather has slowed the progress of the Louisiana crop a bit, but not to a detrimental level. Texas is also moving ahead, probably just now crossing the halfway point of being planted. Mississippi is getting optimistic about the size of its crop (at least compared to last year) with 110,000+ acres being likely. Arkansas and Missouri are looking up as well, but the picture will be much clearer in a few more weeks. The strong domestic market is hoping for a stable growing season to produce high-quality rice with solid milling out turns, and exporters want the same because they are expecting that with a larger crop will come more competitive pricing. There are a lot of moving pieces at the moment, but things will settle once planting is complete. In Asia, prices rallied for a second straight week, specifically in Thailand where white 5% is now registering at $480 pmt, up from $465 pmt last week. Viet bumped as well, though not as much, up to $465 pmt from $460 pmt. There is strong demand in the eastern hemisphere, but the wild card will be India. Recall that we reported their rabi crop is much larger than expected—large enough to register another record crop. When these supplies come to market, the Indian government will have to re-evaluate its tariff program and its exportable supply. This could certainly shock the Thai and Viet prices, but until then, the market is firm. |
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In This Issue:
Senate EPW Committee Holds Hearing on EPA Budget Request
On Wednesday, the Senate Committee on Environment and Public Works held a hearing on the President’s Fiscal Year 2024 Budget Request for the Environmental Protection Agency (EPA). Senators questioned EPA Administrator Michael Regan about policy and funding priorities at the Agency, including regulation of waters of the United States (WOTUS). Administrator Regan acknowledged the Agency’s rule will be impacted by the Supreme Court’s ruling in Sackett v. EPA but reaffirmed that the Agency was operating within its authority in issuing the rule. A recording of the hearing can be found here.
As part of USRPA's international program to promote U.S. rice around the world, USA Arroz visited Escuela Oficial Urbana Mixta No. 810 Jornada Matutina Zona 1 in Santa Catarina Pinula in Guatemala. They gave a demonstration about how to cook U.S. rice and prepared rice to serve the students.
Santa Catarina Pinula is a town with a population of 70,982 and a municipality in the Guatemala Department of Guatemala, which includes Guatemala City and its suburbs.
Chief Operating Officer Mollie Buckler and USRPA consultant Stuart Hoetger
represented US Rice Producers Association on the USDA Agribusiness Trade Mission
to Panama City, Panama this week. The delegation, which included 26 agribusiness
and farm organizations and two state departments of agriculture was led by USDA
Trade and Foreign Agricultural Affairs Under Secretary Alexis Taylor.
The trip itinerary included tours of local retail stores, a distribution center, the
opportunity to see retail promotions featuring U.S. products, and meetings with
industry members from the region. In addition to Panama, representatives from the
Dominican Republic, Costa Rica, Nicaragua, El Salvador, Guatemala, and Honduras
attended trade mission activities.
Over the last 10 years, the U.S. has exported an average of 46,000 MT to Panama
annually, and approximately 65,000 MT in the 2022 calendar year.
“This trade mission was an excellent opportunity to connect with Central American
rice importers and USDA-FAS colleagues from CAFTA-DR member countries,”
Buckler said. “The market for U.S. rice is changing dramatically in this region, and
it’s extremely important for USRPA to have boots on the ground as often as possible.
We’re proud to have been able to represent the U.S. rice farmer in this capacity this
week.”
Read the USDA’s Press Release about the Trade Mission here.
South Louisiana Rail Facility (SLRF) continues shipping U.S. Rice by vessel to
Columbia tenders in an SLRF / Agreeta partnership
Market Update: Colombia Consumes 95 Pounds Per Capita
Similar to last week, planting is underway in Louisiana, while most other states
eagerly await better weather and ideal timing. Arkansas is just around the corner
from getting in the field, but cold and wet weather is pushing start dates out a
bit. This is exactly the case for California as well, where despite expectations for
100% water allocations, now many are worried they won’t be able to plant because
of too much water. The storms keep coming and the forecast isn’t letting up. Not
having decent drying weather for the fields will push out fieldwork, which will likely
cause some prevented planting to occur. This is welcome news for the folks who
were able to contract medium grain rice in the south several weeks ago, as the
actual California acreage keeps whipsawing back and forth.
A recent USDA GAIN report on Colombia, which is a key trade partner for the
U.S. because the U.S.-Colombia Trade Promotion Agreement was published this
week. Colombia has an average per capita consumption rate of approximately 95
pounds, which is higher than several other South and Central American countries.
Given that all other trade agreements have or are expiring and resulting in a dropoff of exports, Colombia provides a steady stream of business and is extremely
important to the market matrix, as the TRQ for U.S. rice for 2023 is 128,205 metric
tons. Over the last six marketing years, this means that the U.S. has been
responsible for about 35% of Colombia’s imports each year. Compare that to
Mexico, where only a few years ago the U.S. enjoyed nearly 100% market share
and now struggles to maintain levels that exceed 50% market share.
Domestic production in Colombia is expected to increase, due in part to the
implementation of better agronomic practices through a technology transfer
program called AMTEC. This program provides information to increase productivity
and reduce production costs. Domestic rice prices have also been on the rise in
Colombia, incentivizing more production. In January 2022, paddy was priced at
$327 pmt. One year later in Jan 2023, paddy increased 28% up to $418
pmt. Production is expected to increase just under 4% this year, up to 1.36 million
acres.
Moving to Asia, prices rebounded a bit in Thailand, bouncing back to $460 pmt
where it was two weeks ago after dropping to $450pmt last week. Vietnam,
likewise, is at $460 pmt after a jump this week. Pakistan rice is quoted just below
$450 pmt, achieving relative parity for the first time in several months. This firming
can be attributed to steady business and currency fluctuations, namely the
strengthening of the Thai Baht.
And not to beat a dead horse, but the weekly USDA Export Sales report was ugly
once again. There was a spike two weeks ago, but we are back down to net sales of
only 14,900 MT, down 42% from the previous week and 73% from the prior four-week average. Exports of 14,300 MT were up 37% from the previous week, but
down 76% from the prior four-week average.
In This Issue:
| "El Festival de Arroz" (The Big Pot Rice Festival) was celebrated on March 11 at IRTRA Retalhuleu. IRTRA is a theme park in Guatemala City, Guatemala, with an average of 8,000 visitors daily. The objective of the festival was to promote the consumption of 100% U.S. rice. 3,000 Jambalaya dishes were served with delicious ingredients: U.S. rice, pork, shrimp, squid, and oysters. The attendees enjoyed a musical show while eating this rich U.S. rice plate. Guatemala imported 96,000 MT of paddy rice from the United States. |
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