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In This Issue:
- Market Update: Complex Global Rice Market as U.S. Harvest Gains Strength
- Washington, D.C. Update
- USRPA Board of Directors Elects New Leadership
- USRPA Wraps Up a Busy July in Guatemala
- Photo from Rice Country
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Market Update: Complex Global Rice Market as U.S. Harvest Gains Strength | |
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The typical headlines this time of year focus on harvest, potential yields, and a crop outlook that is getting clearer by the day. However, the excitement continues to come from India as the reverberations of their export ban of non-basmati rice shakes its way to consumers. Even here in America, panic buying not seen since the food crisis of 2008 or toilet paper purchases in the pandemic has found its way to urban centers. As expected, an over-reaction was the first reaction, but it is our hope that cooler heads will prevail.
It has been widely reported in the last week that India is responsible for 40% of the global rice trade, and therefore assumed the ban was all encompassing. While it’s true that India does account for 40% of global exports, their ban on white rice actually accounts for approximately 15% of the global rice trade. The policy change is significant by all standards, but the following numbers will help to break down the situation and hopefully quell the developing hysteria. India typically exports approx. 20 million metric tons of rice per year (40% of global rice trade). Of those exports:
- Basmati: 4-5 million metric tons (approx. 9% global rice trade) is still exportable
- Parboiled: 7-8 million metric tons (approx. 15% global rice trade) is still exportable
- Brokens: 3-4 million tons (approx. 7% global rice trade) has seen tariff/ban since Q3 2022; ie: the market has already adjusted to not having this supply available.
- Impacted White Rice: 7-8 million metric tons, or approx. 15% of the global rice trade, is being taken off the market…unless the Indian government exercises its option to make G2G deals with other nations.
A 15% reduction in global supply is an enormous shock to the rice trade, but it’s important to know we aren’t talking about a 40% reduction that is assumed based on headlines. The supply reduction has certainly found its way to Asian pricing, as Thai prices shot up nearly 10% this week, almost touching $600pmt, while Viet prices bumped only 4%, holding closer to $550 pmt. We expect these prices to continue firming as India’s primary customers in West Africa, Indonesia, and the Philippines scramble to secure supplies in the near term, all while competing against the steady business Thailand and Vietnam already possessed without India’s customers.
All of this panic buying and scrambling for supplies in the far east is good for us in the Western Hemisphere. The large crop we are about to harvest is no secret, and inquiries are already being made as to availability and supplies. While many of these inquiries are rather obscure and may not have “legs,” the real test will be Iraq. Iraq honored its MOU with the U.S. last year but at the same time procured significantly more and cheaper supplies from Thailand to fill out their demand. With Thai prices skyrocketing, and many Thai buyers void of a U.S. relationship, a shift of supply from Thailand to the U.S. is a very rational pivot for Iraq. This is great news for the overall market to scoop up additional demand amid rising prices, but has the potential to further constrict paddy supply. This could therefore firm up paddy prices to an already strained South American market. With all the unknowns there is one thing for sure: this is lining up to be an exciting year for the U.S. crop and the global rice complex as a whole.
Looking at the USDA Crop Progress report from July 24, we see that 73% of the Arkansas crop is in good to excellent condition, 100% of California is in good to excellent, 58% for Louisiana with 40% in fair, 75% good to excellent for Mississippi, 79% good to excellent for Missouri, and 85% good to excellent for Texas. Combines have been in the fields in both Texas and Louisiana for several days now and with a weather prediction of hot dry days ahead, the harvest will gain strength by the day. This paints an overall rosy picture for the ensuing harvest, with over 75% of the crop showing good to excellent. Where this optimistic crop analysis would have placed an ominous expectation on price only weeks ago without the development of India’s ban, the solid-looking large crop only bodes well for the entire U.S. rice complex.
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House Delays Consideration of Ag-FDA Appropriations Bill
This week, the House was scheduled to consider the Military Construction and Veterans Affairs (Milcon-VA) appropriations bill as well as the Agriculture and Food and Drug Administration (Ag-FDA) appropriations bill for FY2024. Although the House, in one of the last votes before recess, was able to pass the Milcon-VA bill on a close 219-211 vote, with two Republicans voting with every Democrat against the bill, consideration of Ag-FDA appropriations has been delayed. The Milcon-VA bill is the first FY2024 appropriations bill to be passed by either complete chamber. Earlier in the week, the Rules Committee had met but did not report out a rule for floor consideration of the Ag-FDA bill. The appropriations bills for FY2023 expire at the end of September. Future consideration of the Ag-FDA appropriations bill is expected in September. Both the House and Senate are scheduled to be on recess throughout the entire month of August.
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USRPA Board of Directors Elects New Leadership | |
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Neal Stoesser
Chairman
Raywood, TX
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At the Summer Board of Directors meeting earlier this month, the board elected new leadership for the upcoming two year term. Neal Stoesser is the new Chairman of US Rice Producers Association.
Stoesser is a fourth-generation farmer, growing rice, soybeans, milo, and hay and raising cattle along the Texas gulf coast. He had the pleasure of growing up watching his father, the late Ray Stoesser, advocate for the rice industry and now proudly follow in his footsteps. Stoesser’s love of farming began very early in his life and at the age of 8 when he started actively helping his father’s farm by driving the cart and has not stopped since. He farmed his first solo crop at the age of 18 and now farms a minimum of 6,000 acres of rice per year. He has continuously adapted and innovated to meet the current demands of farming.
Stoesser, continuing the long-established custom that has been passed on from one generation to another, is joined on his farming operation by his wife, Meredith, and two sons; Nate, age 14, and Wes, age 10. According to Stoesser, "The rice industry feeds a bunch of the world; we are just trying to do our part to help."
Also elected were Vice Chairman Chris Berry of Poplar Bluff, Missouri, and Secretary-Treasurer Dustin Watkins of Welsh, Louisiana. Thanks to these gentlemen for their commitment to their fellow U.S. rice producers.
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Chris Berry
Vice Chairman
Poplar Bluff, MO
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Dustin Watkins
Secretary-Treasurer
Welsh, LA
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USRPA Wraps Up a Busy July in Guatemala | |
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During the month of July, promotions in Guatemala gained national attention, featuring the use and consumption of U.S. rice in different activities. One of the most important was the Fourth of July celebration at the American Embassy in Guatemala, where a giant Jambalaya was cooked for 1,500 guests. The rice-based Cajun dish included chicken, ham, and shrimp as well. In the 4th of July celebration, the southern flavor of the U.S. was highlighted and it was shown how rice is abundant, rich, and very economical to use.
USRPA has participated hand in hand in the local activities of the U.S. Embassy through its local partner in the promotions of American rice. USRPA has also continued with visits to schools to promote the use and consumption of U.S. rice in the School Nutrition Program, serving to date more than 50,000 children, training about 1,600 teachers and about 82,000 housewives who are the mothers of the students who attend these schools. USRPA ensures that cooking classes always focus on the nutrition, affordability, and versatility of U.S. rice.
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Harvest '23 of Will & Charlie Reneau, near Winnie, TX. Thank you @scott.winney for sharing pictures. | |
Cornerstone
Trade Update
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Food and Ag Regulatory and Policy Roundup | | |
India:
Grain and Feed Update
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World Agricultural Production | | | |
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Harvest underway in the Coastal Region, fungicide applications going out in North Delta
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August 17, 2023
2023 Horizon Ag Arkansas Field Day
Harrisburg, AR
More Information
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January 30-31, 2024
27th Annual National Conservation Systems Cotton & Rice Conference
Jonesboro, AR
More Information
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USRPA does not discriminate in its programs on the basis of race, color, national origin, gender identity, sexual orientation, religion, age, disability, political beliefs, or marital/family status. Persons who require alternative means for communication of information (such as Braille, large print, sign language interpreter or translation) should contact USRPA at 713-974-7423. |
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