Cash prices were relatively unchanged across the board this week as cash rice supplies continue to dwindle and growers turn their attention to groundwork and planting. For all intents and purposes, old crop in Texas and Louisiana is gone, so buyers looking to source paddy have to move up the river to Arkansas, where supplies are also tight. Planting surveys indicate that the Texas crop is about 80% planted, and Louisiana is well underway. Starting next week, the USDA will begin releasing their weekly crop progress reports.  

Milled prices, both domestically and internationally continue to react to the Coronavirus stockpiling hysteria. Milled prices in Thailand have shot up nearly $140 per ton since February on increased demand. Of course, Vietnam halting its rice exports, as well as India pulling back are strong factors that continue to disrupt the global rice trade. From a stocks perspective, there appears to be sufficient supplies to satisfy global demand, assuming the market can proceed normally, ie., no export bans and reduced panic buying. Since both of these are still ongoing, it’s difficult to project the full impact that the coronavirus will have on world prices over the next 12-months. 

This week NASS released the annual Prospective Planting report. The reported indicated that growers expected to plant 18% more acres than last year at this time. Arkansas was up 25% year over year at 1.19 million acres, Louisiana at 390,000 acres, Mississippi at 150,000 acres, Missouri at 190,000 acres and Texas at 170,000 acres. California acres are forecast at 500,000 acres, but most in the industry already anticipate planted area to be north of 520,000 acres. Note that last year’s Prospective Planting report projected total U.S. rice acres to be 1.778 million acres compared to the actual area harvested which was only 1.73 million acres. 

The USDA also released the stocks report which showed rice in all positions as of March 1 ^st . Long grain rough rice stocks were down more than 22% against last March while milled rice stocks were up 59% year over year. Medium grain stocks were also down year over year. The fact that this stocks report basically reflects rice in all positions before the outbreak really made it to the U.S. suggests that futures stocks reports, ones that take into account all of the panic buying will ultimately show a much tighter picture.

In the futures market, the nearby contract climbed over 3% and while slightly more modest the other open contracts all posted gains against las week as well. The futures continue to seek convergence with fundamentals which implies further gains may be likely in the short run.  

This week, USRPA signed on to a letter led by the American Farm Bureau Federation to the U.S Small Business Administration (SBA) requesting eligibility clarification for the Economic Injury Disaster Loan (EIDL) program.

The CARES Act provides $349 billion in federally guaranteed loans through the SBA to help small businesses meet cash flow needs and keep workers employed. The bill includes $10 billion to support the expanded SBA EIDL program. The program allows businesses to apply for an EIDL advance of up to $10,000 to help pay for employees’ sick leave and maintain necessary payroll.

While there is statutory authority to include agricultural producers and businesses, there is some discrepancy between the SBA loan application and congressional intent to include agricultural businesses. The letter requests that SBA immediately modify the website and issue guidance clarifying that agricultural enterprises are permitted to participate in the EIDL program.

The most significant news on domestic U.S. rice consumption for farmers is the disturbing news that imports now account for more than 20% of the market, according to a report published earlier this week by the Economic Research Service of the USDA. It's significant because per capita consumption for Americans remains around 24-26 lbs per person, an amount that has not changed in the past 20+ years. And this number includes pet food, beer, processed foods and finally table rice.

The report states that the imports account for about 1 percent of the value of all U.S. agricultural imports. For 2019/2020, rice imports are estimated to be 32.5 million cwts (rough rice), 9% higher than a year ago and a record for the third straight year. Increase in the demand of Asian varieties are 70% of the rice imports. Then once again Puerto Rico is buying large volumes of cheaper rice from……China, sold “well below current trading prices” according to the ERS/USDA. A surprise to some farmers is that Brazil has become the largest supplier of broken rice.

Does this mean the U.S. rice industry needs to make some changes in research and domestic promotion efforts?