Washington, D.C. Update

USRPA Joins Agricultural Transportation Working Group Letter

The US Rice Producers Association joined more than 190 other members of the Agricultural Transportation Working Group in sending a letter to Congress urging them to take action to prevent a potential rail strike that would lead to devastating consequences. At the time of the letter, which was sent on November 3, the deadline for the rail “cooling off” period had been set to November 14, 2022. Recently, that deadline was extended. The letter emphasized the urgency at which Congress should be prepared to act, as well as underlined the national security implications a strike could impose.

Read the full letter here.

USDA Announces Additional Emergency Relief and Pandemic Assistance

Secretary Perdue announced plans for additional emergency relief and pandemic assistance from USDA. The Emergency Relief Program (ERP) Phase Two will assist eligible agricultural producers who suffered eligible crop losses, measured through decreases in revenue, due to wildfires, hurricanes, floods, derechos, excessive heat, winter storms, freeze (including a polar vortex), smoke exposure, excessive moisture and qualifying droughts occurring in calendar years 2020 and 2021. The Pandemic Assistance Revenue Program (PARP) will help producers that experienced revenue decreases in 2020, compared to 2019 or 2018, due to the COVID-19 pandemic.

More information can be found here.’

Senate Ag Working to Move Ag Nominees

The Senate Agriculture Committee is pushing to confirm several agriculture nominees before the end of the year. Those awaiting confirmation include Alexis Taylor for USDA undersecretary for trade and foreign agricultural affairs, Jose Esteban for undersecretary for food safety, and Doug McKalip for chief agricultural negotiator at USTR.

Several members have voiced concerns about the nominees. Sen. Cory Booker (D-CO) is concerned with Esteban’s answers about which foods can be labeled as “humanely raised.” Sen. Bob Menendez (D-NJ) has been holding up McKalip’s nomination over concerns about transparency within USTR. Additionally, Sens. Bill Hagerty (R-TN) and Dan Sullivan (R-AK) have raised concerns with other USDA programs. Sen. Hagerty wants to avoid new oversight and regulations of the walking horse industry and Sen. Sullivan is concerned about new logging restrictions in the Tongass.

Farm Workforce Modernization Act

There is renewed interest in moving the Farm Workforce Modernization Act in the Senate. Rep. Dan Newhouse (R-WA), an original cosponsor of the legislation in the House, continues to urge Senate leaders to move the legislation in the last few weeks of the 117th Congress.



Senate Agriculture Committee Chairwoman Debbie Stabenow recently expressed support for the bill: “I would love to see that pass. I really feel like this is an opportunity, with the House having passed a bill, the president will sign it. I’ve been telling all the agriculture groups that this really is a moment to get something done, but they’re going to have to lean in very heavily to make that happen.”

Reports on the market this week are much like last week. The business remains steady at the domestic level, and many are wondering how long it can keep up. Now that harvest is complete, paddy in first-hand is plentiful. There is a market for cash rice, but with slow exports and Haiti off the table, those offers will last only as long as the domestic market stays strong.
The USDA ERS Rice Outlook was published this week, with the “highlight” being that the export forecast was lowered by 4 million cwt. This comes as no surprise to anyone in the industry, but it still feels like a bit of a blow to see it so bleakly scrolled across the page. On the supply side, production was lowered 1.1 million cwt to 164.3 million and imports were raised 1 million cwt to a record 45 million. On the use side, exports were lowered 4 million cwt to 71 million, while the domestic and residual use forecast was raised 1 million cwt to 142 million. These revisions netted out to an increase of 2.9 million cwt in the ending stocks forecast, up to 36.1 million cwt.
Turning now to the ERS report on the global outlook, production was lowered 1.35 million tons to 503.7 million tons, 2% down from last year. This was a result of Nigeria, Pakistan, and Sri Lanka having a lighter production than a year before. The global consumption and residual use forecast are down 2.1 million tons from last year's record. Global ending stocks were lowered 2.2 million tons to 169.0 million.
In Asia, prices bumped a little this week, but are still within the band prices have been trading for the past several weeks; $415-$425pmt. Viet Prices softened just a bit down to $430pmt, while India graduated from $385pmt up to $390pmt. This is the first time Indian prices have exceeded the $385pmt price threshold, and our best guess would be currency fluctuations and the strength of the dollar. That is largely what is responsible for the appreciating price in Thailand in recent weeks.
Prices out of the United States remain far higher than the competition, but the domestic business is pulling more than its weight, and keeping cash offers afloat. We expect this to be the case through the holiday season and will turn a new chapter in the rice market upon entering the new year.

In This Issue:

  • Market Update - USDA ERS Rice Report Lowers Exports Four Million Cwts
  • USRPA Participates in 2022 USAEDC Annual Workshop
  • Ray Stoesser Memorial Scholarship: Deadline December 1
  • Happy Thanksgiving from USRPA
  • Photos from Rice Country

RMTC 2023 will host its convention at the beautiful Hard Rock Hotel Vallarta, Puerto Vallarta, Mexico, from May 30 - June 1, 2023, an all-inclusive beach resort that is located 20 minutes from the excitement of Puerto Vallarta. With a gorgeous beachfront setting, the Hard Rock Hotel Vallarta is the essence of all-inclusive coastal luxury and tranquility. 

Rice Market & Technology Convention will bring members together from throughout the rice industry in order to help better farming practices, to increase rice consumption, and to promote the overall rice trade in the Western Hemisphere. The convention meets this goal by providing cutting-edge technology to the grower and miller while offering the importer/exporter pertinent, up-to-date information concerning the market.

Registration and Sponsor & Exhibitor Opportunities will be available soon!

2022 Midterm Election analysis created by Cornerstone.

DISCLAIMER FROM CORNERSTONE

"Cornerstone Government Affairs assembled the following report to help clients interpret the implications of the 2022 midterm elections. As you know, this has been an extremely uncertain — and unusual — election cycle. At the time of publication, neither chamber has been called by the Associated Press, and many races remain up for grabs. We are aware that some information in this report may quickly become dated, and we will update this document periodically.

We write with the assumption that Republicans are likely to win a majority in the House of Representatives. Because we may not know who controls the Senate until after the Georgia runoff on Dec. 6, we offer insights into both a Democratic-controlled and Republican-controlled Senate. We look forward to discussing these results with you in detail as the landscape becomes clearer in the days and weeks ahead.

In a week dominated by midterm elections, the rice market bumped along in a quiet fashion with no news significant enough to rise above the polls and election results. But there was a release of the USDA’s monthly Supply/Demand report, and as expected, provided a dim outlook for the coming term. We have been discussing here the severe drop in exports this marketing year, and that has unfortunately been exacerbated by an increase in imports as well (typically Jasmine and Basmati rice). There was a reduction in field yields to help reduce the supply, but not enough, as the USDA increased ending stocks by 2.3 million cwt, up to 23.2 million cwt. This is an increase of stocks by 11%.

On the ground, Arkansas has conditions much like last week; there are some offers out there but not in large volumes. There has been a bump in the futures market, but not in a significant fashion. Mississippi is reporting welcomed rains that will help increase barge traffic once again, which is good news for more than just the rice industry. Louisiana has reports of paddy boats headed to Mexico, with some delay in the most recent one.

In Asia, the market remains firm where it has been these past few weeks. Thailand has priced at $425 pmt, Viet at $430 pmt, and India at $380pmt. It is conveniently “business as usual” in much of the rice world, perhaps except for some traders trying to discover the finer points of the Indian tariff.

A quick update on the potential rail strike would show that the crisis has been averted once again, this time by extending the “cooling off period” through December 4. The original date was November 19th. This provides more time to come to an agreement among all Unions, and hopefully find a win-win for the entire supply chain.

The USDA Export Sales report shows net sales of 37,500 MT this week, which were primarily for Canada (17,700 MT), the United Kingdom (10,400 MT), Haiti (7,100 MT, including decreases of 100 MT), Guatemala (900 MT), and El Salvador (500 MT). Exports of 33,400 MT were primarily to Haiti (22,100 MT), Mexico (3,700 MT), Canada (2,700 MT), South Korea (2,700 MT), and Jordan (700 MT).

In This Issue:

  • Market Update - USDA Report Reduces Field Yields, Raises Stocks
  • Washington, D.C. Update 
  • RMTC is Going to Puerto Vallarta, Mexico
  • Ray Stoesser Memorial Scholarship: Deadline December 1!
  • Photos from Rice Country

Located in the southwestern part of Louisiana, on the Calcasieu River, and with ample water and rice supply, the South Louisiana Rail Facility Loading Terminal has its barge loading terminal ready to load. This new facility is another alternative in the marketplace for Southwest Louisiana and East Texas rice farmers.

Sen. Boozman Sends Letter on COVID-19 Relief Accountability

This week Sen. John Boozman (R-AR), a Ranking Member of the Agriculture Committee, sent a letter to Agriculture Secretary Tom Vilsack raising concerns over the use of unobligated COVID-19 funds for unauthorized purposes. In the letter, the Senator requested an accounting of the $11 billion of support provided in relief through the FY21 appropriations bill. The letter can be found here.

House Members Introduce MAP and FMD Program Expansion Bill

This week, a bipartisan group of six members of the House of Representatives introduced the Supporting Market Access to Reinvigorate Trade (SMART) Act. This bill would increase the funding available for the Market Access Program (MAP) and the Foreign Market Development (FMD) Programs. These Department of Agriculture programs help support new market creation for American agricultural products. This bill was originally introduced by Reps. Jim Costa (D-CA), Jimmy Panetta (D-CA), Cindy Axne (D-IA), Dan Newhouse (R-WA), Kim Schrier (D-WA), Tracey Mann (R-KS), and Ashley Hinson (R-IA).

The market marches on with little change from last week. Domestic business is keeping the mills busy, while exports are “off the table” for the time being to Haiti or Iraq. Paddy prices remain firm in all regions, though it would appear there is a softening coming if our export demand doesn’t pick up a bit. And to say that paddy prices are firm could be a bit misleading; the market is relatively thin right now with minimal activity, but that is to say, prices haven’t dropped by any significant margin in Arkansas, Louisiana, Mississippi, or Missouri. They all remain in the $17/cwt range. In Texas, the harvest of the second crop is slowly getting underway, but it will take until the end of November to get a good handle on how things are shaping up here.
There was USDA GAIN Report published this week on India and Thailand. While we don’t compete directly with these eastern markets, they do set the global price well below U.S. prices, where the spread between the Eastern exporters and the U.S. seems to be testing new highs each week.
In India, the GAIN report expects rice production to be down 6% this year, which equates to 122 million metric tons. This is on account of unseasonal rains in October that resulted in poor harvest conditions. The monsoon was also a bit more sporadic than normal, which resulted in more volatile conditions and decreased yields overall. Milled rice quotes from India have increased since they announced their selective export ban, with prices now hovering around $385 pmt. U.S. long grain prices have seen quotes at $725 pmt, which results in a spread of $340. 
The USDA GAIN report from Thailand revised total rice production to be down slightly to 19.9 million metric tons because of field damage resulting from floods. It is estimated that about 210,000 acres of main crop rice were damaged as a result of Typhoon Noru, and this accounts for the majority of the loss. Despite this, the report indicates that Thailand is still expected to export 7.5 MMT of rice this year, which is 23% higher than last year. This is a result of a weakening Thai baht, available supply, and recovery from the pandemic. While the weak baht and available supply are attractive to a competitive rice price, there is still a challenge with high freight costs. Thai export prices have been hovering at $410 pmt, compared to the U.S. long-grain at $725 pmt, which results in a spread of $315 pmt.
And finally some good news in the weekly USDA export sales report. Net sales skyrocketed to 119,200 MT this week, an increase of 202%. Exports registered at 101,000 MT, another 207% increase there. There is certainly catching up to do, and this is a welcome development.
Mercosur rice continues with an important presence in Mexico and Central America, however, the tightening of supplies, the dollar in Brazil along with the fallout from the recent presidential election are contributing to a much more difficult marketplace. The Mercosur rice crop continues the planting process and is anticipated to be what is considered a good size crop. The CONMASUR organization made up of the major rice mills in the 5 Mercosur countries will be having their regular meeting in Asuncion, Paraguay later this month. The numbers to be released by each country is certainly of interest to the market and the RA will report them accordingly.
In the futures market, the average daily volume slipped by 6.36% down to 1,710. Open Interest also fell, down to 7,226 or a drop of 12.1%.
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