Cash prices throughout the lower delta remain in their sideways state, which has been the case for nearly a month. Further north, prices posted some minor gains as rough rice prices in Arkansas, Missouri, and Mississippi generally advanced $0.25 per cwt this past week.

Sluggish paddy exports continue to weigh on the market as trade with Costa Rica, Honduras, Nicaragua, Mexico, and Venezuela are all subdued. Fortunately, there is a little respite in Guatemala and El Salvador where demand is actually up against last year. 

Rice from Mercosur continues to displace U.S. rice in Mexico and Central America. This is largely rough rice but also milled due to lower prices and the exchange rate. However, over the past 10 days those markets have seen a slight increase in FOB prices because of new harvest conditions and farmers attitudes towards selling. High night time temperatures have caused considerable damage apparently in the state of Rio Grando do Sul, Brazil and Corrientes, Argentina. Just like it happened in the U.S. in 2010, lower field and milling yields are being reported throughout the region including Paraguay. Current estimates have lowered total production by 1 million tons paddy basis.

Reports out of southwest Louisiana indicate the South Louisiana Rail Facility has sold 44,000 tons of rough rice under the US-Colombia Free Trade Agreement quota. Bulk carrier "Federal Caribou" is scheduled to load in the Port of Lake Charles on February 3^rd. February 1^st is the deadline for TRQs to be paid for by successful bidders. The total recent auction called for 85,913 tons milled rice equivalent. Details to follow. The total annual quota for 2022 is 122,685 metric tons (milled equivalent).

As the Federal Reserve moves toward a more fiscally responsible strategy to curb inflation which breached 7% in 2021, the highest rate since 1982, other central banks around the world are being forced to consider similar action. The latest guidance from the Fed suggests there will be rate hikes each quarter in 2022, and even beyond. As a result, the equity markets have seen their largest January declines in recent history. The NASDAQ down more than 14% year to date and the Dow down 6%. 

Many Southeast and East Asian countries have seen exports abound over the last 12 months despite the hamstrung global supply chain. Many key rice exporting and importing countries such as Thailand, India, and Indonesia, among others, have recognized the need to follow suit in terms of monetary policy tightening. However, it will likely be done at much slower rate. Since inflation in these countries was generally lower than the U.S., they can afford to take less aggressive steps. 

Normally, a weaker currency can result in greater exports, however, for U.S. rice, that was not necessarily the case. Part of the reason for this is that a weaker currency makes imports more expensive, and since most fertilizers and chemicals are sourced from abroad, the added cost of growing the crop partially offset the value of a weaker currency. U.S. rice exports are projected to reach 3-year lows on smaller crop sizes and higher prices. Meanwhile, Thailand’s rice exports are forecast to reach 3-year highs. Vietnam and Pakistan also stand to gain from declining exports out of India in 2021/22.

The nearby contract jumped nearly $1 per cwt this week compared to the later contracts which were only up about $0.10 per cwt. Open interest continues to build, with this week’s average open interest reaching its highest level since October.  Total volume also grew to 527 from 381 last week.  

On Thursday, January 20, the House Agriculture Committee held a hearing to discuss the state of the rural economy with Secretary of Agriculture Tom Vilsack. The purpose of the hearing was for Secretary Vilsack to provide a comprehensive update on the U.S. Department of Agriculture’s efforts to both address economic issues in rural areas, while supporting agricultural producers. There was a broad variety of topics discussed during the hearing, but members and witnesses mainly focused on the challenges facing the supply chain and administering more COVID-19 and disaster relief funds to farmers and rural populations. 

The primary points of contention in this hearing centered around focusing on the USDA’s role in stabilizing the economy relating to supply chain and labor shortages, as well as providing more access to assistance programs for agriculture producers. Secretary Vilsack continuously emphasized the large amount of funds that will be available for food assistance programs, farmers, and agricultural facilities in the coming months. In general, Republican members of the committee were unsatisfied with the current Administration’s methods of doling out disaster relief funds and skeptical of the efforts to mend the supply chain crisis. Democrats on the committee were generally more supportive of the Biden Administration’s efforts to distribute relief funds from the American Rescue Plan and the ongoing plans for the Bipartisan Infrastructure Deal.

You can listen to a live stream of the meeting here.

During the last month, several recipes were created for sharing with family at end-of-the-year parties. Recipes for hot and cold desserts, main dishes, and appetizers were published on the Facebook and Instagram profiles. Chef Juan Salomón showed viewers how to cook a rice dish for special holidays, using ingredients that are easily accessible and prepared quickly. One of the most special recipes was made with ham, vegetables and rice, ideal for Christmas or New Year's Eve dinner. Additionally, nutritionist Rodrigo Valdivieso prepared some healthy and delicious rice recipes particularly for people who watch their weight, using rice with seeds, vegetables, and fruits.

Valdivieso also made a video with the question: Does rice make you fat? He explained: “No food makes us fat, its main function is to give us immediate energy. It all depends on education, creativity, and following a balanced diet that includes vegetables, fruits and proteins. Everything is a mathematical exercise. It is important to burn calories, and that is why it is important to do regular physical activity,” he said.