In This Issue:
- Washington Update
- Currency and Exchange Rates Confuse New Business Efforts
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As everyone is aware, Corona Virus outbreak is consuming all attention, efforts, and activities. The Senate, on Wednesday, March 18
th, passed the second supplemental dealing with the outbreak. President Trump promptly signed the bill. The USDA part is mainly focused on nutrition assistance such as $500 M for WIC, $250 M for meals to seniors, and $400 M for commodity purchases and distribution through food banks. The bill was generally supported on all sides although there was a small delay. Senate leadership considered perfecting the bill and sending back to the House an even larger package. Ultimately given the pressing need, the Senate decided to pass an “imperfect bill” and address the deficiencies with a third supplemental.
The third supplemental that the Senate is developing is expected to spend over $1 trillion dollars as it makes its way through Congress. The 3 major sectors being considered so far are ($500 billion?) for direct payments to individuals and households; ($300 billion?) for small business loans; and ($200 billion?) in collateralized loans and loan guarantees to "severely distressed sectors" of the U.S. economy. Amounts are being discussed and negotiated as are the sectors being addressed. One can expect many additional sectors/issues to be raised, both rational and irrational, as it is considered.
In the meantime, USDA is seeking an additional $161 million to pay for agencies' emergency actions. As one would expect, programs relying on user fees are particularly hard hit such as $55 million for the Animal and Plant Health Inspection Service. In addition, the Food Safety and Inspection Service and the Forest Service are also encountering increased costs.
Another ag related issue receiving attention is the operation of the H-2A labor program, particularly as it applies to Mexico (but affecting all countries). As cross border restrictions tighten, there is a serious concern that agriculture will not have the labor they need to harvest and keep food on the shelves at grocery stores across the nation. There have been many efforts, by commodity groups, general farm organizations, and Members of Congress, focused on ensuring the efficient operation of the program.
The Senate, which was scheduled to be in recess this week, has indicated that it will stay in session until the 3
rd supplemental is finished—most likely next week? The House has announced that it will adjust its schedule and will not return to session until they are in a position to vote on the 3
rd supplemental. In addition, the House will adjust its voting procedures in order to follow the CDC’s recommendations regarding the number of Members on the House Floor at any one time.
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Currency and Exchange Rates Confuse New Business Efforts
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With the coronavirus and its resulting market impacts paralyzing the world, the rice industry has remained fairly stable over the past week. Export sales for the week were modestly higher than in the previous report at 42,500 MT reported. Export loadings were significantly stronger as large volumes of rice continue to ship against old sales in a bid to get in front of any border closures at this time. The currency and exchange rate basket has confounded efforts to precipitate new business and the uncertainty surrounding long term preventative measures against the virus has compounded the problem. Essentially, nobody is willing to project where the global trade will be in six months and as a result very little long term trade is being accomplished. For an industry that is as dependent on trade as rice, this is not a great scenario.
Asian benchmark pricing has continued to appreciate over the past week as well. Key origins are beginning to strengthen in price and are narrowing the spread with U.S. milled rice. This will make the U.S. rice more competitive on the international scene but the ability to accomplish any of these trades is hampered by the aforementioned issues. USDA has kept the world market price unchanged since the last report.
Domestically, there is virtually no old crop rice left to trade and growers are focusing on getting the new crop in the ground. New crop pricing is still something of a mystery at this point but producers are sticking to business as usual in the anticipation that the world will regain some sanity by harvest time. Of particular note is the economic hardships that have been put on producers who have invested in crawfish production, as the efforts to isolate and contain the coronavirus have significantly impacted the economic bottom lines of that industry.
The futures market posted positive gains over the week as the whiplash from the larger financial markets tipped to the upside. The overall run on non-perishable food stuffs has undoubtedly had an impact as well. Until the market can calm down and some sensation of how the preventative measures to contain the virus become better known and understood, substantial volatility can be expected in the futures market. Similarly, the rice market as a whole will have a subdued tone as well.
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USDA Announces Feeding Program Partnership in Response to COVID-19
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Collaboration will provide nearly 1,000,000 meals a week to rural children
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(Washington, D.C., March 17, 2020) – U.S. Secretary of Agriculture Sonny Perdue today announced a collaboration with the Baylor Collaborative on Hunger and Poverty, McLane Global, PepsiCo, and others to deliver nearly 1,000,000 meals a week to students in a limited number of rural schools closed due to COVID-19:
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June 30, 2020
Texas A&M AgriLife Research Extension Rice Field Day
David R. Wintermann Rice Research Station, FM 202 just north of Eagle Lake, Texas. Field tour in late afternoon, then move to the Eagle Lake Community Center for dinner and a business meeting. More details to come.
July 1, 2020
H. Rouse Caffey Rice Research Station Annual Field Day
Crowley, Louisiana. Tours early in the morning, followed by presentations inside. Check back later for more information.
July 9, 2020
73rd Texas A&M AgriLife Research Extension Rice Field Day
Texas A&M AgriLife Research and Extension Center, 1509 Aggie Drive in Beaumont, Texas. More details to come.
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- Pigweed punches back
- Predicting inversions - new insights
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Total wheat and sorghum production will remain practically unchanged, while corn and rice production are forecast to increase due to higher planted area in marketing year (MY) 2020/21.
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FAS Cairo forecasts Egypt’s rice imports in MY 2020/21 at 200,000 metric tons.
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Arkansas Rice Update
by: Dr. Jarrod Hardke,
Scott Stiles,
Dr. Nick Bateman,
Dr. Gus Lorenz,
& Dr. Ben Thrash
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China Publishes Frequently Asked Questions Document on Tariff Exclusion Process
This document provides more detailed guidance about the Chinese tariff exclusion process. Although only China-based enterprises can apply for tariff exclusions, this recent guidance should help the U.S. food and agricultural industry better understand the process
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Next week the USRPA will update Rice Advocate readership and participants on the future of the Rice Market & Technology Convention 2020.
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25722 Kingsland Blvd.
Suite 203
Katy, TX 77494
p. (713) 974-7423
f. (713) 974-7696
e. info@usriceproducers.com
www.usriceproducers.com
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USRPA does not discriminate in its programs on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, or marital/family status. Persons with disabilities who require alternative means for communication of information (such as Braille, large print, sign language interpreter) should contact USRPA at 713-974-7423
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