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In This Issue:
- Market Update - Farmers: High Production Costs Make Selling Decisions Difficult Even When Prices Considered Strong
- Washington, D.C. Update
- Mexico’s White Rice Supply-Demand Report
- National Rice Month Giveaway Winner Announced
- Ray Stoesser Memorial Scholarship: Application Available
- Photos from Rice Country
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Market Update - Farmers: High Production Costs Make Selling Decisions Difficult Even When Prices Considered Strong | |
Steady as she goes can be the mantra this week. Harvest continues forward in Arkansas, where more field yields are coming in to substantiate the initial reports from last week. No big surprises with quality, but there is still optimism that it will increase as more milling reports come in. The Arkansas harvest should be passing 70% complete this weekend and will be on the downhill side of the season through October. Mississippi has pulled ahead and will be over 80% complete by this weekend. California is still lagging significantly because of the rain delay but should catch up quickly with clear skies in the forecast for the foreseeable future.
Paddy prices and the corresponding milled prices remain incredibly strong when compared to international competition; both from the Western Hemisphere and especially the Eastern Hemisphere. Paddy maintains firm pricing in Texas at $17.00/$19.00/cwt. Louisiana is strong at $18.00/cwt as well. Mississippi, Arkansas, and Missouri are all in the $16.00/$16.50/cwt range. The conundrum producers find themselves in is that inputs were so high this year, even with the firm paddy pricing, it doesn’t quite tip the scales in favor of liquidating supplies. However, when one converts these prices to milled FOB tonnage, it becomes apparent very quickly that selling is probably a good decision when looking at the price of the competition. Easier said than done when looking at the cost of production.
A simple comparison of pricing tells the story, but fortunately, the supply-driven market is enough to support the strong long grain prices in the U.S. for the time being. USA 5% is $725 FOB, 20% higher than Brazil 5%, priced at $580 pmt. Uruguay and Argentina are below that in the Western Hemisphere. Moving east, the prices separate even further, with U.S. 5% being 40% more expensive than Thai 5%. This typically isn’t a significant issue because the U.S. and Thailand don’t often share customers, but with Iraq in the wings, the U.S. industry wants to be as attractive as possible to attract more than the minimum 80,000 metric tons outlined in the MOU.
A recent GAIN report on Mexico predicts a slight upward revision in the production numbers to 263,000 metric tons of rough rice; the equivalent of 181,000 metric tons of milled rice. Consumption figures remain the same at 980,000 metric tons, necessitating imports in excess of 800,000 metric tons. While the U.S. used to supply most of this rice, the increased price has made Brazilian rice a much more favorable option. The market share that the US once enjoyed has slowly eroded over time, and there isn’t a reversal in the near term given current trajectories. This week in Brazil price indications for paddy rice at the Port of Rio Grande do Sul are in the $350-$355 per ton range depending on the currency exchange rate. Planting season continues throughout the Mercosur.
|  | U.S. rough rice exports have slowed to a trickle compared to previous years while the domestic market shows strong demand. | |
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Lawmakers Introduce Agricultural Legislation
Last week, a bipartisan group of senators reintroduced legislation to double funding for the USDA Market Access Program and Foreign Market Development Cooperator Program. This bill was first introduced in 2017 as the Cultivating Revitalization by Expanding American Agricultural Trade and Exports (CREAATE) Act as part of discussions for the previous farm bill. This session the bill was introduced by Sens. Angus King (I-ME), Joni Ernst (R-IA), Tina Smith (D-MN), and Chuck Grassley (R-IA) as Congress prepares for the farm bill next year. More information on the bill can be found here.
In addition, Sens. Grassley and Sherrod Brown (D-OH), both members of the Senate Agriculture Committee, introduced the Farm Credit for Americans Act, which amend the Farm Credit Act to prohibit farm credit lenders from lending to foreign nationals. More information on the bill can be found here.
Lawmakers in Congress have also recently turned attention toward foreign influence in the American agricultural industry. A variety of other proposals were sent to the Committee on Foreign Investment in the United States (CFIUS), an interagency body assessing the impacts of foreign investment on national security. Earlier this month, President Biden signed an executive order calling on the CFIUS to consider the impacts on the agricultural industry in its reviews and recommendations. Numerous bills have recently been introduced to permanently add Secretary Vilsack as a member of the CFIUS. These include the Agricultural Security Risk Review Act and the Food Security is National Security Act. Other proposals would put greater emphasis on the role of agriculture in national security, including the Promoting Agriculture Safeguards and Security Act and the Foreign Adversary Risk Management Act.
Senate Considers Agricultural Nominations
On Tuesday, the Senate Agriculture Committee approved the nominations for three key agricultural positions. The nominations for Alexis Taylor, nominee to be Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs at USDA, Vincent Logan, nominee to be a member of the Farm Credit Administration Board, and Dr. Jose Esteban, nominee to be Under Secretary for Food Safety at USDA, will now go to the full Senate for consideration.
Following recent bipartisan calls to move swiftly on the nomination of Doug McKalip, the nominee for Chief Agricultural Negotiator at the Office of the US Trade Representative (USTR), Sen. Bob Menendez (D-NJ) has blocked the progression of the full Senate vote. Sen. Menendez cited broader concerns about oversight and transparency within the USTR as his rationale for holding up movement on the vote. Earlier this month, Sen. Menendez joined the rest of the Senate Finance Committee in unanimously approving the McKalip’s nomination.
USDA Announces Investment in Fertilizer Production
Earlier this week, Department of Agriculture (USDA) Secretary Tom Vilsack announced USDA was making $500 million in grants to increase American fertilizer production. The Fertilizer Production Expansion Program aims to address the input cost hikes farmers have seen due to the war in Ukraine. The program will prioritize innovative and sustainable fertilizer production.
USDA Commission Recommends Changes to FSA County Committees
A USDA Equity Commission recommended a study on the effects of potentially terminating the Farm Service Agency’s (FSA) county committees, noting equity concerns for minority farmers. Members of the Committee said historically county committees have hindered equality while emphasizing the role the county committees have in shaping the culture of local FSA offices. In addition, the Commission also recommended USDA create a program to ensure county committee minority advisers have direct access to the FSA Administrator.
State Department Announces Resumption of Cuban Visa Processing
This week, the Department of State announced it will fully resume immigrant visa processing at the American embassy in Cuba in early 2023. Earlier this year, the Biden Administration expanded visa processing operations in Havana but, under current policy, Cubans with U.S.-based relatives must travel to Guyana for visa interviews. The Administration is hopeful these steps will promote safe and timely migration from Cuba.
White House Holds Conference on Hunger
On Wednesday, the White House held the Conference on Hunger, Nutrition, and Health. Ahead of the conference, the White House released its national strategy outlining the Biden Administration’s priorities and solutions to these challenges. In addition, the White House announced the public and private sectors are committing over $8 billion to address hunger and diet-related diseases. The list of these investments can be found here.
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Mexico’s White Rice Supply-Demand Report
According to SIAP’s July report, published, on August 5, 2022
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Interesting data from the recently published July 2022 Mexican White Rice Supply-Demand Report from the Mexican Department of Agriculture’s Agri-food Information Service (SIAP). These are Mexican government numbers, that include imports from all origins:
Supply. It is estimated that in the 2021/2022 Fall-Winter cycle, the Mexican white rice offer suffered a reduction of 5.2% in comparison with the previous cycle, due to a 12.5% shorter production and 7.7% shorter imports, although the initial inventories were 41% higher.
In the 2021/2022 Fall-Winter cycle, the planting intention was 1.1% higher, passing from 13,814 to 13,967 hectares, from which 75.2% were planted, with the states of Nayarit and Campeche having the largest planted areas, Nayarit contributing with 56.2% of the national production.
In the 2022 Spring-Summer cycle, it is estimated that 6,659 hectares were established at the end of June, with the states of Michoacan and Veracruz having the largest planting progress, reporting 65.5% of their total planting intention.
Demand. For the 2021/2022 cycle, it is expected that demand will decrease by 5.3%. Exports for human consumption are expected to decrease 47.7%; human consumption is expected to decrease 4.3%; self-consumption and seed for sowing are expected to decrease 16% each. 2022 Exports forecast is 10,000 MT, while self-consumption and seed are 5,000 MT.
With the current production situation, it is expected that the 2021/2022 cycle’s self-sufficiency rate will decrease to 14.3%, down from the previous 15.1%.
Prices. In June 2022, both the average rural price and the consumer price reported inter-annual increases. The median rural price, increased 29.8% reaching 6,700 MX pesos / US$335 per MT, and the consumer price increased 5.5% reaching 33 thousand MX pesos / US$1,650 per MT.
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e/ Estimated data for the full cycle, with real numbers to the month showed
Source: SIAP with info from Customs/Tax Revenue Service
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National Rice Month Giveaway Winner | Thank you to everyone that participated in our National Rice Month giveaway and congratulations to our winner, Malena Reeder @malena_reeder. Enjoy your USRPA-branded RTIC cooler! Remember to follow our social media! | |
Second Annual Ray Stoesser Memorial Scholarship | |
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Applications are coming in! Make sure you get yours in on time or if you know current high school seniors, undergraduate, or graduate students pursuing a career in agriculture, encourage them to apply for the Second Annual Ray Stoesser Memorial Scholarship!
Applications are due Thursday, December 1.
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Thanks to University of Missouri Rice Extension Specialist Justin Chlapecka for sharing this photo from the Missouri Rice Research Farm with us! You can see the crew in action on the MO Rice Council Facebook page. Send us your harvest photos on Facebook, Instagram, or via email! | | |
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Food and Ag Regulatory and Policy Roundup | | |
World Agricultural Production | | |
Grain: World Markets and Trade | | |
USDA Economic Research Service
Rice Outlook: September 2022
U.S. 2022/23 Rice Crop Forecast Reduced 6 Percent
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MO Crops Podcast
Produced by University of Missouri Extension
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Arkansas Rice Updates
from the
Arkansas Row Crops Blog
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September 28 - October 1, 2022
Texas Rice Festival
Winnie, Texas
More Information
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October 20 - 23, 2022
The 85th International Rice Festival
Crowley, Louisiana
More Information
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January 18, 2023
Western Rice Belt Conference
El Campo Civic Center, El Campo, Texas
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January 31 - February 1, 2023
26th Annual National Conservation Systems Cotton & Rice Conference
Baton Rouge, Louisiana
More Information
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