In This Issue:
In This Issue:
| The market has remained consistent since Thanksgiving. This is typical for this time of year though, as historically there have not been large chunks of business conducted during the holiday season. This year, however, it is a bit more noticeable because there haven’t been any large chunks of business since the Iraq tenders have completed. The stark lack of offshore sales is crossing into the worrisome category, and even the strong domestic market will likely not be able to continue keeping prices elevated to the same degree moving forward. The price of U.S. long grain compared to the competition continues to maintain a spread not seen in recent history. While U.S. long grain 5% has dropped from $740pmt down to $730pmt, it is still nearly $200pmt higher than its Western Hemisphere counterparts. Uruguay at $560pmt, Brazil at $565pmt, and Argentina at $505pmt. Just after the Thanksgiving break on November 28, a GAIN report on Brazil was published highlighting the competition that the U.S. now faces from this Western Hemisphere juggernaut vying for our core export market in Central America, namely Mexico. First things first, is that Post reduced the forecast for planted rice in Brazil in the coming year to a historical low of 3.9 million acres because crops like soybeans and corn are much more profitable and require less maintenance. This 3.9 million acre is 2.5% lower than last year, and 6% lower than the year before. |
 Despite the downturn in U.S. rice exports, the South Louisiana Rail Facility continues to market rice in nearby markets. Their newest development is a barge terminal located at the Port of Lake Charles (pictured) with loading activity underway this week. In just 10 short years, rail, barge, vessel, and now the Agreeta Rice Mill Partnership that will kick off next month has given some 200 rice farmers in SW Louisiana and SE Texas access to markets not previously available. |
| As a threat to the U.S. rice industry, the Brazilian rice grower industry organization FEDERARROZ is combatting higher input costs by advocating for a more ambitious commercial agreement with the Mexican government. Right now, Brazil has a quota of seventy-five thousand tons per year of rice that can be exported tariff-free. They are pushing to grow this agreement, further putting pressure on the U.S. long-grain industry. In light of this, Post has increased the export forecast for Brazil from 700,000 MT up to 900,000 MT, an ominous foreboding for the U.S. Exports to Mexico from Brazil have exceeded 305,000 metric tons as of September this year, exponentially higher than in previous years. The reason is two-fold; the first is the high prices from the U.S., and the second is the tax exemption that Mexico placed on imported rice to discourage food inflation. Mexico now accounts for 60% of Brazil’s paddy exports, a statistic that was unfathomable only a few years ago. For example, in 2021, the U.S. exported 765,000 MT to Mexico, then in 2022 it was 625,000, and down to 373,000 through September of this year; barely more than Brazil. Mexico is still procuring the same amount of rice, the U.S. is just getting much less of the business. In Asia, things look very similar to pre-Thanksgiving numbers. Thai prices are at $430pmt, Viet prices at $435pmt, and Indian prices are now closer to $395pmt with their tariff. Prices remain firm that this level in the middle and far east, and there is little expectation for significant price shifts outside of some unforeseen weather or geopolitical event. The weekly USDA Export Sales report net sales of 25,300 MT this week primarily for Japan (13,000 MT), Haiti (7,100 MT), Honduras (3,900 MT), Belgium (300 MT), and Canada (200 MT). Exports of 23,500 MT were primarily to Colombia (11,400 MT), Haiti (7,100 MT), Canada (1,900 MT), Mexico (1,700 MT), and Saudi Arabia (500 MT). |
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The purpose of the Rice Education Exhibit was to further the influence of the festival's continuing education program. It was a great event to educate youth on all things RICE! Participation in community educational events has allowed USRPA to raise awareness of rice and promote rice consumption and education.
WASHINGTON, D.C., Dec. 3, 2021 – The U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) has awarded fiscal year 2022 funding to more than 60 U.S. agricultural organizations to help expand commercial export markets for U.S. goods.
The Market Access Program (MAP) focuses on consumer promotion, including brand promotion for small companies and cooperatives, and is used extensively by organizations promoting fruits, vegetables, nuts, processed products, and bulk and intermediate commodities. The Foreign Market Development (FMD) Program focuses on trade servicing and trade capacity building by helping to create, expand and maintain long-term export markets for U.S. agricultural products.
“The Market Access and Foreign Market Development programs benefit producers throughout the United States, building markets for a wide variety of U.S. farm and food products around the globe,” said FAS Administrator Daniel Whitley. “These programs play a significant role in supporting the U.S. agricultural industry that achieved record exports in 2021 and is projected to do even better in 2022. Increased exports are critical to expand farm incomes, improve the economic health of rural communities, and ensure nutrition security here at home and overseas.”
Under the Market Access Program, FAS will provide $175.6 million for fiscal year 2022 to 67 nonprofit organizations and cooperatives. These organizations use the funds to support U.S. producers with marketing and promotion activities around the globe, including market research, technical assistance, and support for participation in trade fairs and exhibits. The average MAP participant provides more than $3.50 in contributions for every $1 in federal funding it receives through the program.
Under the Foreign Market Development Program, FAS will allocate $26.8 million for fiscal year 2022 to 21 trade organizations that represent U.S. agricultural producers. The program focuses on generic promotion of U.S. commodities, rather than consumer–oriented promotion of branded products. Preference is given to organizations that represent an entire industry or are nationwide in membership and scope. The organizations, which contribute on average more than $2.50 for every $1 in federal funding they receive through the program, will conduct activities that help maintain or increase demand for U.S. agricultural commodities overseas.
USDA’s international market development programs have had a significant and positive impact on U.S. agricultural exports. An independent study released in 2016 found that MAP and FMD provide $28 in export gains for every $1 spent by government and industry on market development.
Agricultural exports have grown significantly over the past decades, becoming an increasingly important component of the agriculture industry and accounting for 20 percent of U.S. production. From 2000 to 2020, U.S. agricultural exports grew from $56 billion to $150 billion. It is estimated that U.S. agricultural exports supported nearly 1.1 million full-time jobs in 2019.
USDA has published the list of organizations that will receive fiscal year 2022 MAP awards and FMD awards. To learn more about MAP, FMD and other FAS programs, visit www.fas.usda.gov.
USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris Administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy, and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.
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Reconciliation rolls on!
The House Agriculture Committee has scheduled a mark up to consider a proposal to satisfy the
Agriculture Committee’s reconciliation instructions required by S. Con. Res. 14 on Friday, September 10th at 1:00 pm - view here. The agriculture portion of the partisan Reconciliation bill is intended to implement President Biden’s Build Back Better $3.5 trillion agenda. The legislation has been “pre-conferenced” by the House and Senate Agriculture Committees so little change is expected during the markup on Friday.
The Reconciliation bill proposal is intended to address the following areas:
Statutory language implementing the proposals may be found here.
There is a $35 billion difference in House and Senate Agriculture Committees due to the differences in jurisdiction concerning child nutrition programs which the House Education and Labor Committee will consider Thursday, September 9th.
Passage of the $3.5 trillion reconciliation proposal is uncertain. Currently, moderate House Democrats have been expressing their dissatisfaction with the proposal and Senator Joe Manchin D-WV is rumored to support only $1.5 trillion in spending. Coupled with the end of the month vote on the bipartisan infrastructure package and Democratic policy disagreements, the path forward for the reconciliation proposal is rocky.
On June 23, 2021, President Joe Biden announced his intent to nominate Homer Wilkes for Under Secretary for Natural Resources and the Environment, Department of Agriculture.
Dr. Homer Wilkes, a native of Port Gibson, Mississippi, currently serves as Director of Gulf of Mexico Ecosystem Restoration Team. He is one of the five Federal Executive Council members to oversee the rebuilding of the Ecosystem of the Gulf of Mexico after the BP Oil Spill of 2010. He served as the Acting Associate Chief of USDA/Natural Resources Conservation Service (NRCS) in Washington during the period of 2010 to 2012. Dr. Wilkes' tenure with the United States Department of Agriculture spans over 41 years. During his tenure he has served as State Conservationist for Mississippi; Chief Financial Officer for NRCS in Washington, DC; Deputy State Conservationist for Mississippi; and Chief of Administrative Staff for the South Technical Center for NRCS in Fort Worth, Texas.
Dr. Wilkes also served as Naval Supply Officer in the United States Navy Reserves from November 1984 to April 2007. Dr. Wilkes received his Bachelors, Master of Business Administration, and Ph.D. in Urban Higher Education from Jackson State University. He also successfully completed the USDA Senior Executive Service Candidate Development Program (SES CDP) through American University’s Key Executive Leadership Certificate in Public Policy. Dr. Wilkes and his wife Kim, currently reside in Ridgeland, MS. They have three sons, Justin, Austin, and Harrison. He enjoys fishing, restoring antique vehicles, and family activities.
On June 18, 2021, President Joe Biden nominated Xochitl Torres Small for Under Secretary of Rural Development, Department of Agriculture. Xochitl Torres Small is the granddaughter of migrant farmworkers and grew up in the borderlands of New Mexico. In 2008, she came home from college to work as a field organizer, working in neighborhoods known as colonias, in southern New Mexico. She served as a field representative for New Mexico’s Senator Tom Udall, where she collaborated with local grassroots leaders, business owners, elected officials, and regional and state economic development officials to help communities access American Recovery and Reinvestment Act funds. Torres Small studied water law and has worked closely with rural water utilities. In 2018, Torres Small became the first woman and first person of color to represent New Mexico’s second congressional district, the largest district that isn’t its own state. Torres Small served as the U.S. Representative for New Mexico’s 2nd congressional district in the 116th Congress. Torres Small was defeated in 2020 by Yvette Herrell.
The social media campaign has received positive feedback and attention as the campaign China continues to promote U.S. rice. A translation of the positive marketing message used to educate and reach to Chinese market reads as:
Rice is clocked by the aura of the universe and is full of the essence of heaven and earth.
Rice is the main food of mankind and has fed the people for generations for eight thousand years.
Mountains and trees, grasslands and rivers, nature bred a harmonious and unified soil environment. The United States, a large agricultural country with 1.2 million hectares of rice arable land, cultivates about 10 million tons of rice every year. It has a variety of varieties, including all common long-grain and medium-short-grain varieties on the market. It is of high quality, non-GMO, environmentally friendly, clean, and consistent appearance, and has uniform rice grains. The rice is light in taste, full and chewy kernels, and will not lose quality when reheated. This is a solution to the homesickness of Chinese living overseas? Who is it to have inherited the bright fruits of Chinese civilization?
Rice planting in the U.S. is coming to an end as most states are now passing the finish line. In California, rice emerged is about 5% ahead of last year whereas the other states are slightly behind. Only about one-third of the crop is considered to be in poor condition, but with it being so early in the growing season, that statistic doesn’t yet hold much merit at this point in time.
World market prices are showing small signs of softening, according to the USDA which recently reported world market prices (rough rice) to only be down 2% in the last 3 months. Last year at this time, world market prices were at a similar level, however, they had made a 15% run in the 3-months leading up to the middle of May.
We are on the bridge between old crop and new crop. The June 29th actual planting report is much anticipated as it will indicate how many acres shifted over into corn and soybeans. Then the next WASDE report is due out on July 12th and will set the tone and real indications for new crop pricing.
With prices dropping in Brazil those suppliers should become more competitive and closer to the U.S. if not lower. Much depends on the freight market and foreign exchange. Some analysts see 200,000 tons of paddy exports and much more milled rice as well. The government agency CONAB is saying yields in the largest state of Rio Grande do Sul reached 8,500 lbs per acre.
Brazil must export to avoid additional price reduction. Currently business is slow and vessel freights are very high including for containers. We understand the Brazilian grain quality is excellent.
After a several-month bull run in freight markets, which was extra aggressive in April and May, the Dry Bulk Index showed its first sign of letting up. The recent retreat in shipping prices is attributed to China’s claim to police the industry and reduce hoarding and market manipulation. Of course, most analysts expect this small slide in prices to be quickly reversed as the shortage of ships and containers is clearly an ongoing obstacle.
An inflating US Dollar coupled with excessive shipping and logistics costs continues to have a significant impact on grain trade worldwide. If those economic factors weren’t enough, the relentless COVID outbreaks which seem to pop right when another starts to get reeled-in is working only to muddy the “market water” even more. If these components can’t stabilize in the near future, the global commodity markets may be in for a relatively volatile year.
The Futures market is already supporting volatile expectations as rough rice prices eroded further. Declining prices, and rising volume, and open interest normally point to a weak market. In this sense, the futures market actually reflects what is being seen on the ground, where buy interest is weak at best which is only working to demotivate sellers from engaging the market. The reduced output in 2021 may work to reverse the current sentiment, but with the crop having just been planted, that may take a little while.
Dwight Roberts, President & CEO of the US Rice Producers Association and Bianka Rodriguez, Marketing & Western Hemisphere Promotions Director, participated in the Texas-Cuba Trade Alliance (TCTA) virtual meeting with Cuban Ambassador Lianys Torres on Monday morning.
The meeting was moderated by Ricardo Arias, Trade Development Manager at the Port of Houston. Lianys Torres, Cuban Ambassador to the United States, and Rodney Gonzalez, Cuban Embassy Official, updated the audience on the rollout of the COVID-19 vaccine in Cuba. Torres commented that Havana's population will be fully vaccinated by July and is expecting the whole country to be fully vaccinated by the end of the year. With such promising results, leaders are also expecting the Havana International airport to open by the end of the year. Torres also commented that Cuba will end its decades-old dual currency system and have a single unified exchange.
Among the topics discussed, an improved US-Cuba relationship was emphasized throughout, especially within the agricultural sector, saying that Texas has all the elements to continue with the agricultural relations.
Dwight Roberts, USRPA President & CEO has been an active board member of the TCTA since its inception and is considered the first organization formed to address agriculture issues with Cuba in the U.S.
