In This Issue:
- 10th Annual Rice Market & Technology Convention Focuses on Evolving Market Landscape
- Rice Market Update
- Washington DC Updates
- Chlapecka Selected as Missouri Rice Extension Specialist
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10th Annual Rice Market & Technology Convention Focuses on Evolving Market Landscape |
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Last week, the US Rice Producers Association hosted the 10th annual Rice Market and Technology Convention at The Woodlands Resort in The Woodlands, Texas. After going virtual in 2020 due to the COVID-19 pandemic, nearly 200 participants from multiple countries safely came together in person from July 6 to July 8 to network and learn from leading industry experts.
“The conference provided a healthy networking environment to talk about rice marketing and production issues,” Dwight Roberts, President and CEO of the US Rice Producers Association, said. “It was good to see so many major rice companies from the United States and Latin America in attendance and reinforced all the objectives of this yearly event. We are preparing new ideas for 2022 thanks to the suggestions of many participants.”
From sustainability to the state of international trade, themes of change and evolution underpinned every session and discussion panel. The convention kicked off on Wednesday morning with remarks from Dan Hunter, Assistant Commissioner of the Texas Department of Agriculture, who noted the more conscious consumer that came out of the pandemic. Keynote speaker Dennis DeLaughter then set the tone for the conference with a presentation titled “Embracing Change: Expecting the Unexpected.” After a variety of subjects were addressed in the two days, an overall rice market outlook from industry analysts Stuart Hoetger and Dr. Thomas Wynn concluded the convention on Thursday afternoon. Throughout the week, participants also had the opportunity to connect with numerous agricultural businesses and organizations in the sold-out exhibition space.
Planning is well underway for the 2022 convention, with more details to be announced in the coming months. Visit www.ricemtconvention.com for the latest updates on next year’s event. |
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Agreeta Panel: The Power of Sustainability
Moderator: Corinna Baban, Agreeta USA, Pam West, Brookshire Dryers, Mark Pousson, Louisiana Independent Rice Producers Assn., Brian Ottis, Rice Tec, and Jim Whitaker, Whitaker Grain
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Representatives from more than 25 countries attended RMTC 2021 in The Woodlands, Texas |
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From left, Randy McNiel (Poinsett Grain), Jose Manuel Cremades (Mexicana del Arroz), and Pedro Ibarra (Kellogs USA) enjoy a visit during the opening reception.
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RiceTec is present at the networking cocktail. From left, Alvaro Schwanke Jose Plaza, and Alberto Barbero.
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South America was well represented at RMTC 2021. From left to right, Stuart Hoetger (USA), Federico Paoloni (Argentina), Oscar Ramirez (Paraguay), Ignacio Heisecke (Paraguay), and Valmir Colpo (Paraguay).
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RMTC attendees extend and maintain their commercial and business relationships |
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Thank you to FECARROZ for their loyal support of the RMTC. Dwight Roberts President & CEO of USRPA participated in the FECARROZ board meeting. |
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Gulf Coast Harvest Days Away, Weather Causing Concerns |
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The cash market was largely unmoved from the previous two weeks. Price action in the cash market appears to be waiting for further crop updates. Last week the southern Delta was pummeled with unusual volumes of rain which unfortunately arrived just weeks before initiating harvest in both Texas and Louisiana. Growers in both states have expressed concern over the impact these late rains will have on their harvest and crop quality.
The USDA continues to report relatively favorable crop conditions despite the weather events that have so far struck the southern Delta. Although growers hope to battle through the adverse weather conditions, they are also quick to recognize that there is little room for error this year as supplies are already down considerably.
Earlier this week, the USDA published the July WASDE report which contained a few semi-bearish revisions. First, the USDA bumped long-grain carryout by 4 million cwts which bolstered the new crop’s balance sheet. Despite shaving one million cwts from domestic use, the USDA was still able to raise total demand for US long-grain by improving their export expectations by 2 million cwts. Overall, the bottom line changes from last month were raising 2021 ending stocks by 3 million cwts. However, since the crop has yet to mature and be harvested, these revisions had little impact on the cash or futures market. The futures market most recently traded at $13.14 per cwts, a relatively uneventful level since rice has been trading in that vicinity for the past several weeks.
In Asia, significant price drops in Viet 5% led the week. At the end of June, Viet 5% was trading around $470 PMT, and currently, in only two weeks’ time, prices have dropped to $405-$410 PMT. Thai prices have been below Viet prices consistently this marketing year, and this convergence was anticipated, but not at the velocity in which it happened. Some are pointing to sky-high freight rates, while it is more likely the fact that additional supplies are hitting the market, and export demand is simply slow at this time. What is unique about the drop in Viet and Thai prices is that India has remained fairly steady at $385 PMT, seemingly immune to the dropping prices from the other two primary exporters.
The softening prices make for an interesting market with the Philippines looking to buy as much as 2 MMT this year. Because Viet prices had been so high compared to Thailand, it was expected that Thailand would win the bulk of the business. But now with India, Viet, and Thai prices all within $25-$35 PMT of each other, the Philippines will be in a good place as a large buyer. India continues to ship rice at record speeds, but it’s necessary because they need to find a home for two years of consecutive record crops. Thankfully Africa has been a steady customer, and with the Philippine business in the wings, we could see some upward price pressure in India in the coming months.
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President Biden issued an Executive Order on July 9, “Promoting Competition in the American Economy.” The order specified 72 actions and initiatives by numerous federal agencies aimed at promoting competition and addressing problems identified by the White House. The order touches numerous aspects of the economy – from banking to transportation to agriculture. An Executive Order cannot change or override existing statute, but they are often used to give direction to federal agencies in exercising discretion that they have under the law. For these reasons, the order often “encourages” agencies to take an action, or directs them to develop plans for further action. The White House fact sheet on the order is linked here and the executive order is linked here. The order directs all federal agencies to use spending and procurement authorities to create more opportunities for small businesses. The US Government spends about $600B a year procuring goods.
Specifically related to agriculture, the order directs USDA to curb unfair or deceptive business practices and advantages through vigorous enforcement of the Packers and Stockyards Act. These measures include clearly defining a violation of the Act, maintaining that it is unnecessary to “demonstrate industry-wide harm to establish a violation of the Act,” prohibiting grower ranking systems, and adopting anti-retaliation protections. USDA is directed to enhance consumer transparency by clarifying which meat products qualify for the “Product of USA” label. Three reports must also be submitted to the White House Competition Council: 1) outlining steps to support “value-added agriculture and alternative food distribution systems” via model contracts and improved transparency and labeling; 2) examining the effects of retailer consolidation on competition and how funding could improve access to local/regional food markets; and 3) enumerating USDA’s concerns with how the intellectual property system enables anti-competitive behavior by seed/input producers. As discussed under the Federal Trade Commission, the order encourages the FTC to limit equipment manufacturers’ ability to restrict the use of independent shops or do-it-yourself repairs – often referred to as “Right to Repair.”
For additional background on the order, generally:
Policy Rationale
- Lays out the broad reasons for why competition is crucial to American prosperity and economic participants (workers, small businesses, farmers, entrepreneurs, consumers)
- Delineates how the negative consequences of corporate consolidation on workers and consumers, providing examples of these effects in the agricultural, information technology, healthcare, and telecommunications sectors
- The Administration intends to enforce antitrust laws to combat the ongoing trend in consolidation, abuses in market power, and damaging effects of monopolies and monopsonies. Antitrust law will also be enforced in response to the dominant Internet platforms who employ suspect M&A practices and unfairly leverage network effects.
- Statutes that the Administration will likely apply as it ramps up antitrust enforcement include:
- Sherman Act
- Clayton Act
- Packers and Stockyards Act
- Celler-Kefauver Antimerger Act
- Bank Merger Act
- Telecommunications Act of 1996
Legal Basis for EO
This section points to the relevant statutes and legislative intent that undergird the order’s rationale for renewed antitrust enforcement. It also identifies the tools at federal agencies’ disposal for protecting fair competition: policing unfair business practices, conducting oversight of mergers & acquisitions, issuing rules promoting new market entrants, and enhancing transparency.
- Statutes cited include:
- Packers and Stockyards Act
- Federal Alcohol Administration Act
- Bank Merger Act
- Drug Price Competition and Patent Term Restoration Act of 1984
- Shipping Act of 1984
- ICC Termination Act of 1995
- Telecommunications Act of 1996
- Fairness to Contact Lens Consumers Act
- Dodd-Frank Wall Street Reform and Consumer Protection Act
Interagency Cooperation
The order encourages agencies to collaborate in policing anticompetitive behavior and reviewing mergers should there be overlapping jurisdictions. Suggested avenues for collaboration include coordinating antitrust investigations, sharing relevant information, and requesting input from the Attorney General or FTC Chair.
White House Competition Council
This section establishes a White House Competition Council within the EOP charged with coordinating USG efforts to address “overconcentration, monopolization, and unfair competition.” The Council will be led by the Assistant to the President for Economic Policy and chaired by the Director of the National Economic Council (Brian Deese). Standing members consist of mostly cabinet secretaries with the heads of independent agencies (FTC, FCC, CFPB, etc.) invited at the Chair’s discretion.
Financial Services
The order encourages the DOJ, Federal Reserve, FDIC, and Comptroller of the Currency to update merger oversight guidelines under the Bank Merger Act and Bank Holding Company Act of 1956.
Worker’s Rights
The order encourages the Federal Trade Commission (FTC) to issue rules prohibiting non-compete clauses or other agreements that would limit workers’ mobility.
FTC Rulemaking Authority (Data Privacy, Agriculture, Wireless Providers, Healthcare)
The order encourages the FTC to consider updating rules that would limit data collection and surveillance practices, permit the “right-to-repair,” and prohibit delayed entry of generic drugs.
Beer, Wine, and Spirits
The order directs the Treasury Department to submit a report detailing any unlawful trade practices, consolidation trends, and unnecessary regulations such as bottle sizes, permitting, or labeling that hinder competition. The Treasury is directed to consider new rules to update how the Alcohol and Tobacco Tax and Trade Bureau conducts oversight and to reduce barriers for smaller market participants.
FCC (Telecommunications)
The order encourages the FCC to:
- implement net neutrality rules
- institute rules for future spectrum auctions to enhance competition in industries reliant on radio spectrum
- support the development and adoption of 5G Open Radio Access Network protocols and software
- limit unreasonable early termination fees
- restore the “Broadband Nutrition Label” detailing provider prices and performance
- require broadband service reports to report their prices and subscription rates to the FCC
- issue rule prohibiting landlords from entering exclusive agreements with ISPs
DOT (Airlines, Railroads, Shipping)
The order directs DOT to appoint members of the Advisory Committee for Aviation Consumer Protection, publish a proposed rule requiring airlines to refund baggage fees for significantly delayed flights, and consider a rule requiring clear disclosure of baggage/change/cancellation fees upon purchase of a ticket. Further, the Surface Transportation Board is directed to strengthen regulations concerning reciprocal switching agreements and ensure that passenger rail rights-of-way are respected. The Federal Maritime Commission is encouraged to prevent shipping companies from imposing excessive “detention and demurrage” charges on American exporters.
HHS (Healthcare)
HHS is directed to consider issuing a proposed rule permitting over-the-counter hearing-aids, promote price transparency initiatives in accordance with the No Surprises Act, and provide standardized plan options in the national Health Insurance Marketplace. HHS must also submit a plan to combat high prescription drug prices and price gouging within 45 days, streamline the approval process for generic drugs, and collaborate with states and tribes to import prescription drugs from Canada.
Department of Commerce (Healthcare, Big Tech)
The order directs the Department of Commerce to consider not finalizing new provisions on “march-in rights and product pricing” that would preclude the agency from using march-in rights to possibly lower drug prices. Moreover, Commerce is directed to submit a report detailing recommendations for improving competition and user benefit in the mobile application ecosystem.
Defense
The order directs DOD to consider antitrust laws and corporate consolidation when assessing the economic forces influencing the “national security innovation base.” Further, it directs DOD to submit two reports to the White House Competition Council: 1) assessing competition in the defense industrial base and where it may be lacking and 2) outlining a plan for avoiding contract terms that complicate DOD’s ability to repair equipment in the field.
Financial Services
The order encourages the Consumer Financial Protection Bureau to consider a rulemaking permitting consumer financial data portability to ease the cost of switching banks.
Department of the Treasury (Worker’s Rights, Financial Services)
The order directs Treasury to submit two reports: 1) addressing how labor markets are affected by the absence of competition and 2) competition’s impact on Big Tech’s foray into consumer finance.
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Chlapecka Selected as Missouri Rice Extension Specialist |
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Dr. Justin Chlapecka has been named Rice Extension Specialist and Assistant Research Professor with the University of Missouri, effective August 1.
In this new partnership between the University of Missouri and the Missouri Rice Research and Merchandising Council, Chlapecka will lead rice agronomy research efforts, conducting research at both the Fisher Delta Research Center in Portageville, as well as the Missouri Rice Research and Demonstration Farm near Malden.
“The MRRMC has partnered with the Fisher Delta Research Center for many years, and we’re excited to continue this collaboration in a new capacity,” David Martin, Missouri Rice Research and Merchandising Council, said. “Justin’s expertise will undoubtedly strengthen the Missouri rice market.”
Chlapecka holds a doctorate in Crop Soil and Environmental Science from the University of Arkansas, where his research focused on rice agronomy.
“I feel very blessed to be led into the opportunity of serving the Missouri rice industry in what will undoubtedly be a mutually beneficial relationship,” Chlapecka said. “Through the partnership of the Missouri Rice Research and Merchandising Council and MU, I am very excited to take my experience with the University of Arkansas and build on that here in Missouri for years to come.”
For more information on the Missouri Rice Research and Merchandising Council, visit www.missouririce.com.
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Cornerstone
Trade Update
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Food & Ag Regulatory
and Policy Roundup
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Arkansas Rice Update
The 17th Arkansas Rice Update of 2021 includes information on conditions, Rice Leadership Class, kernel smut and false smut, rice markets, and podcasts.
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RiceTec Arkansas Rice Field Day: Harrisburg, Arkansas, tours start at 4 p.m., followed by dinner and presentations. |
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University of Arkansas Rice Field Day: Rice Research and Experiment Station, Stuttgart, Arkansas. Morning tours followed by lunch.
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University of Arkansas Rice College: Pine Tree Research Station near Colt, Arkansas. This training event, hosted every other year, will be at Pine Tree for the first time. This will be an all-day training event for rice growers, consultants and industry personnel. Pre-registration will be required, along with a fee of $100 per attendee. Additional details and registration information will be sent out as the event nears. Space will be limited, so be sure to register quickly
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University of Arkansas Rohwer Field Day: Rohwer Research Station, Rohwer, Arkansas
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California Rice Experiment Station Field Day (tentative): Briggs, California |
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University of Arkansas Virtual Rice and Soybean Field Day (tentative date) |
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25722 Kingsland Blvd.
Suite 203
Katy, TX 77494
p. (713) 974-7423
f. (713) 974-7696
e. info@usriceproducers.com
www.usriceproducers.org
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We Value Your Input!
Send us updates, photos, questions or comments!
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USRPA does not discriminate in its programs on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, or marital/family status. Persons with disabilities who require alternative means for communication of information (such as Braille, large print, sign language interpreter) should contact USRPA at 713-974-7423 |
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