Volume 20, Issue 12

March 31, 2023

In This Issue:

  • Market Update: Export Outlook Unclear for U.S. Rice Farmers
  • Washington, D.C. Update
  • RMTC Opening Speaker: Dennis DeLaughter "What Could Possibly Go Wrong?"
  • RMTC 2023 - Early Bird Registration Ends Today
  • USRPA Visits with 2023/25 Rice Leadership Development Class
  • Photos from Rice Country

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Market Update: Export Outlook Unclear for U.S. Rice Farmers

The United States Trade Representative (USTR) made it very clear this week that trade agreements and tariff cutting are not on the Biden trade agenda. While this news is not new, it is a stark abandonment of one of the most effective tools the rice industry and the entire U.S. agricultural complex can utilize to compete in a global market. This is especially poor timing given the expiration of the CAFTA-DR trade agreement that has been fundamental in the structure of the importation of U.S. rice into Central and South America. A report this week put to rest any hope the agricultural interests have when U.S. Trade Representative Katherine Tai stated, “At this moment we do not have tariff liberalization negotiations going on with a partner.” The USRPA still strongly believes that trade agreements need to be pursued, because “free trade” doesn’t mean “fair trade,” and when other governments are over-subsidizing rice production, it puts the U.S. industry at a disadvantage.

The expiration of CAFTA-DR isn’t the only obstacle that the U.S. rice industry is facing, nor is it the only reason that exports have cratered nearly 40% this year. Another impact that has helped create this perfect storm is the policies many of our key export markets implemented to protect their citizens against soaring food inflation. These key markets in the Western Hemisphere, Mexico and El Salvador to name two, removed tariffs on rice imports to minimize the impact of food inflation, thereby putting the U.S. at a disadvantage. Add this to a politically volatile climate in Haiti, our key milled export market, and it’s no wonder exports have slumped. The smaller crop over the last three years has oddly helped this predicament, but with a new and larger crop expected this year, there is still hope for a positive outcome.

Turning to that optimism and planting of the new crop, cold weather has slowed the progress of the Louisiana crop a bit, but not to a detrimental level. Texas is also moving ahead, probably just now crossing the halfway point of being planted. Mississippi is getting optimistic about the size of its crop (at least compared to last year) with 110,000+ acres being likely. Arkansas and Missouri are looking up as well, but the picture will be much clearer in a few more weeks. The strong domestic market is hoping for a stable growing season to produce high-quality rice with solid milling out turns, and exporters want the same because they are expecting that with a larger crop will come more competitive pricing. There are a lot of moving pieces at the moment, but things will settle once planting is complete.

In Asia, prices rallied for a second straight week, specifically in Thailand where white 5% is now registering at $480 pmt, up from $465 pmt last week. Viet bumped as well, though not as much, up to $465 pmt from $460 pmt. There is strong demand in the eastern hemisphere, but the wild card will be India. Recall that we reported their rabi crop is much larger than expected—large enough to register another record crop. When these supplies come to market, the Indian government will have to re-evaluate its tariff program and its exportable supply. This could certainly shock the Thai and Viet prices, but until then, the market is firm.

USDA Prospective Plantings Report
USDA Rice Stocks Report

Washington, D.C. Update

USRPA signs on to support estate tax repeal

This week, USRPA signed on to a letter to Senator John Thune (R-SD) thanking him for supporting family-owned businesses and farms by introducing the Death Tax Repeal Act of 2023, which would eliminate the estate tax. A copy of the letter can be found here.

Senate votes to repeal WOTUS Rule

On Wednesday, the Senate voted to overturn the Environmental Protection Agency’s rule regulating the waters of the United States (WOTUS) on a 53-43 vote. Sens. Joe Manchin (D-WV), Jacky Rosen (D-NV), Catherine Cortez Masto (D-NV), Jon Tester (D-MT), and Kyrsten Sinema (I-AZ) joined the Senate Republican Caucus on the vote. The measure passed in the House in March and will now be sent to the President’s desk. President Biden is expected to veto the measure and the Senate will likely not have the votes to overturn the veto.

Secretary Vilsack testifies before Congress

This week, USDA Secretary Tom Vilsack testified before the House Agriculture Committee as it prepares for the upcoming farm bill. He also testified on President Biden’s budget request for the fiscal year 2024 before the House and Senate Agriculture Appropriations Subcommittees. Throughout these hearings, members questioned the Secretary on USDA’s reevaluation of the Thrifty Food Plan which resulted in increases in spending for nutrition programs. Members also emphasized the importance of a strong farm safety net and disaster relief.

RMTC Opening Speaker: Dennis DeLaughter

"What Could Possibly Go Wrong?"

For the past few years our annual opening speaker, Dennis DeLaughter, has guided the conference participants through the world rice market and economic complications. Those upside-down situations and the market atmosphere were skillfully addressed by expecting the unexpected and looking at unintended consequences. 

Where do we go from here? What is it that you may be missing today that you are not thinking about? Making market assumptions can lead rice farmers and mills down a crooked road. Assessing a number of factors can certainly smooth out a few bumps along the road to profitability.

RMTC 2023 - Early Bird Registration Ends Today

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Don't miss out! Register today by clicking on the link below.

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USRPA Visits with 2023/25 Rice Leadership Development Class

USRPA President & CEO, Marcela Garcia visited and spoke to the Rice Leadership Class in Katy, TX while they visit the Gulf Coast. The class consists of seven rice industry professionals: Christi Bland, Sledge, Mississippi; Justin Chlapecka, Portageville, Missouri; P.J. Haynie, Pine Bluff, Arkansas; Jarod Holzhauer, Gillett, Arkansas; Charles Payne, Lafayette, Louisiana; and Alex Struckmeyer, Arbuckle, California. Among the topics discussed were overseas markets, trade issues, and market enhancement strategies.

Photos from Rice Country

Thank you @kasec77_ for sharing this picture of amazing nightfall with us!

Send us your rice country photos on FacebookInstagram, or via email!

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Cornerstone Trade Update

March 24, 2023
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Food and Ag Regulatory and Policy Roundup

March 27, 2023

World Agricultural Production

March 2023 Report

Grain: World Markets and Trade

March 2023 Report

FAO Rice Price Update March 2023

Read the Report
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