|
Just this week, in the opening statement at a hearing examining the Agricultural Economy, Chairman Boozman’s prescient statement hit the nail on the head of what we all in farm country know to be true. There is no room for error. With the current cost of production, market pressures, and outdated farm bills, the generational business of farming truly has no room for error. To drive the point home, Boozman also cited a staggering statistic from a recent report from the Ag and Food Policy Center (AFPC) at Texas A&M, saying that, the most recent crop outlook for the next 5 years for rice, wheat, feed grains, and cotton is the worst it has ever been in the 42 years that AFPC has been making projections.
This is the reality that all U.S. rice producers know and deal with each day when planting, cultivating, and selling a crop that costs more and more to produce than ever before and is then being sold into a market that is unfairly subsidized by foreign countries (ie: India). It is encouraging to see these very real issues being brought into the light in Washington. This is at the top of my mind as PLC and ARC enrollment opened for 2025 just this week. The USRPA’s trip to Washington DC next week should provide some insights as spring planting decisions are being assessed.
As for India’s overweight impact on global prices, there is now discussion that they will lift the export ban on 100% brokens. Recall their release of the export ban was on non-basmati white rice, but has remained on brokens. A wild statistic from only one rice-producing region in India, called Chhattisgarh, shows that of the 16 million mt of paddy produced, 1.5 million mt is being processed into parboiled, leaving 14.5 million mt for white rice. Out of that 14.5mmt, 15% is brokens, resulting in 2.175 million metric tons! China has been and will continue to be the primary buyer of these brokens if made available, but that is a staggering amount of brokens being held in-country, exacerbated by the fact that Indian production is expected to increase even further this year.
Prices on the ground have remained flat, as there have been no significant market impacts to jolt them up or down. Prices in Texas are reported at $14.70/cwt, while Louisiana is at $14.50-$14.80/cwt. Mississippi, Arkansas, and Missouri are all reporting at $13.75-$14.00/cwt.
The harvest in South America is underway, but no discernable change from what we have already discussed. We do expect to see Iraq come in to finish their MOU which will be a shot in the arm to milling activity, but likely won’t spur any sustained spikes in pricing. We do anticipate seeing more cash activity after planting is complete, but again, at pricing similar to what we are seeing today—it’s just that today there aren’t many sellers because there is hope for higher prices later.
In Asia, prices softened even further this week, though not by much. That prices are now reported closer to $450pmt, Indian at $425pmt, and Viet between $405-$410pmt. This is not a trend we want to see continuing to develop as S. America completes its harvest and we are determining our planting intentions for the coming crop.
The USDA weekly Export Sales report shows net sales of 17,100 MT this week, down a whopping 84% from last week and 63% from the prior 4-week average. Exports of 65,100 MT were up 26% from the previous week and 47% from the prior 4-week average.
| 
