Volume 17, Issue 22
June 4, 2020
In This Issue:
  • 2020 Planting Season Ending, Tropical Storm Cristobal Looming
  • Washington DC Update
  • US Rice Producers Association Continues its Social Media Campaign in Mexico
2020 Planting Season Ending, Tropical Storm Cristobal Looming
Despite being hamstrung by numerous weather obstacles this planting season, the South is in its final stages of planting. So far, Texas, Louisiana and California are all complete, with Arkansas and Missouri both hurrying to get their crop planted. Trailing behind its 5-year average by 6%, the USDA most recently reported Arkansas to be 90% complete and Missouri to be 83% finished. Even with the setbacks, it looks like acres should still be on par with the industry’s initial acre projections. This is mostly attributed to the firm undertone that the rice market is experiencing relative to other commodities.  

Rice emerged in Arkansas was recorded at 81%, with 64% of the crop considered to be in good or excellent condition. Crop conditions in Louisiana and Texas are looking quite promising with the start to harvest just over a month away.

Old crop paddy is scarcely traded throughout the entire US as every state is dealing with tight supplies due to consistent demand throughout the marketing year, which was further exacerbated by the COVID panic buying. There are a few pockets of old crop surfacing in the upper delta which are commanding strong prices, but the sales are small and sporadic. As for new crop, rice sales started out at strong levels, and for early planted rice the market still commands a premium. In the lower delta, there doesn’t appear much liquidity at present as buyers and sellers diverge in price expectations.

This week the FAO Food Price Index (FFPI) was released, and it tracks international prices of the most commonly traded food commodities. The index averaged 162.5 points, down almost 2% from last month, marking one of the lowest levels since December 2018 as the world struggles thru the economic impacts of the COVID-19 outbreak. The FAO Cereal Price Index was also down as rice was basically the only major cereal to post month over month gains.

The futures market attracted significant interest this week as average daily volume rose by more than 200% this week. Ongoing buying pressure caused by market long looking to take deliveries pushed the July contract up 23% this week. 

Export prices were relatively stable this week with Thai 100% only down slightly and Vietnam, Myanmar and other Asian origins all flat against last week. The export sales report this week indicated that new sales were up from last week, but still down 46% from the 4-week average. Meanwhile, shipments were on par with the 4-week average, and up from last week. These statistics have little shock factor in the marketplace since the industry already anticipates lower figures moving into new crop.

In Mexico this week, federal government officials continue to express concern for high consumer prices as they discuss the possibility of opening a duty-free quota from any origin. No decision has been made as of this writing as the country continues to battle the severe COVID-19 situation. Mexico is currently sourcing rice from Mercosur countries due to the market conditions in the U.S. 

With regards to Mercosur, in Argentina, the COVID-19 has complicated the economic situation. Domestic demand is strong, estimated to be 30-40% higher than usual due to the alternatives of lower priced rice, pasta and potatoes. Exports have been mostly in containers to the EU as brown rice along with big sales to Chile as well as to Mexico and Peru. Brazil is struggling to control the virus with varied results, in the cities of Sao Paulo, Rio de Janeiro, Manaos and Fortaleza in particular. The market is at a standstill with the appreciation of the Real (5.1 per 1$US) lowering domestic prices or otherwise less competitive, paying $390/ton in Paraguay for milled rice ex-mill. 

Uruguay is selling strongly everywhere it can. No Middle East sales so far to Iraq as the largest destinations are Panama, Mexico, EU, Peru, Turkey and numerous small sales of containers to Central America. A major concern is the lack of irrigation water for the new crop. Lack of significant rains have lowered water reservoirs levels, rivers are low and the threat of a dry winter could seriously damage planting intentions. Paraguay is still in trouble because of the low draft in major rivers making already difficult logistics even worse.
Washington DC Update
On Wednesday, June 3 rd, the Senate passed by Unanimous Consent H.R. 7010, the Paycheck Protection Program Flexibility Act of 2020. President Donald Trump is expected to sign the bill. PPP Flexibility Act will provide farms and businesses more flexibility in how and when they can spend their Paycheck Protection Program loans and still get them forgiven. For those whose PPP loan was already funded, you will be able to choose whether or not to avail yourselves to the extended 24 week window or keep the original 8 week window.

In brief, the bill:
  1. Extends the PPP loan forgiveness period to include costs incurred over 24 weeks after the loan is issued (or through 12/31/20 – whichever comes first). Those businesses who received a loan prior to passage of this bill can choose to keep the 8-week forgiveness window under the original program structure.
  2. Extends from June 30, 2020 to December 31, 2020 the date by which businesses must restore staffing or salary levels previously reduced in order to have the full loan amount forgiven. This provision applies to worker and wage reductions made from February 15 through 30 days after enactment of the CARES Act (3/27/20).
  3. Allows forgiveness amounts to be maintained for companies that can document their inability to rehire workers employed who were employed as of February 15 or their inability to find similarly qualified workers by the end of the year. Likewise, forgiveness amounts can be maintained if business can show that they could not resume business levels from before February 15 because they were following federal requirements for sanitation or social distancing.
  4. Extends the deadline to apply for a PPP loan from June 30, 2020 to December 31, 2020.
  5. Lowers the required percentage of forgiven loan amounts that come from payroll expenses from 75% to 60%.
  6. Repeals a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.
  7. Allows borrowers to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts (rather than the previous 6-month deferral period). Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.
  8. Changes from 2 years to 5 years the minimum loan maturity period following an application for forgiveness {this only applies to PPP loans issued after enactment of this bill, though borrowers and lenders can agree to extend current loans}.

H.R. 7010 had passed the House 417-1 last week. Earlier reports indicate that agriculture interests had supported eliminating the minimum requirement for payroll expenses, but the extension to 24 weeks makes that requirement easier to meet. The CARES Act was created to help small businesses survive the impact of the stay-at-home orders. Many restaurants and other businesses, including some farms, have said they can't spend the money within the eight-week period required for loan forgiveness.

Banks have processed 127,465 PPP loans totaling $7.6 billion to farmers and other businesses in the sector classified by the Small Business Administration as "agriculture, forestry, fishing and hunting." The Farm Credit institutions have made 13,851 loans totaling $1.3 billion.
“Path To The Plate”
USRPA is working with Texas A&M AgriLife Extension to make a film for the program called “Path To The Plate.” The video will educate the public about the Texas Rice industry and where exactly their food comes from. We visited the Mahalitc farm in Eagle Lake then the LCRA Garwood pumping plant and the Wintermann Rice Research Station.
US Rice Producers Association Continues its Social Media Campaign in Mexico
As the world adjusts to changes in everyday routines in everything from business operation to education due to COVID-19, people are turning to social media at increased rates as a way to stay connected to each other and the world around them. The US Rice Producers Association, in an effort to continue the conversation that U.S. rice is nutritious and economical, is expanding its established social media campaign in Mexico.

Melissa Morelos, Professional Chef, Influencer, and Finalist of Master Chef Mexico, has been in charge of creating and sharing various recipes using U.S long-grain rice as the main ingredient. Our Facebook fan page “Consume Arroz USA,” has gained an impressive 92% more of followers in the last four months! On Instagram @consumearrozusa has made 434,315 impressions from March to May 2020. Likes, positive comments and shares from followers of the various recipes, videos, tips and nutritional information is spreading the message that U.S. long grain rice is a nutritious and economical ingredient that to be used in delicious, easy meals, everyday!

The campaign will continue throughout the year on social media, always emphasizing the message of consuming U.S. long grain in their daily diet.

Follow #OurFarmers During #Plant2020
It’s planting season, and our team is closely following spring planting across the country. We encourage you to follow along with our  #plant2020 campaign , or even better, send us photos of how planting is going on your farm.
Upcoming Events
June 10, 2020
IGC Grains Virtual Conference 2020
For regular updates web: www.igc.int

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 8, 2020
Horizon Ag Louisiana Field Day, 5:00 p m
Richard Farm Shop, 5632 Louisiana Highway 700, Kaplan, Louisiana
For more information, please call Horizon Ag at 866-237-6167.

July 9, 2020 (Virtual)
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.

July 23, 2020
University of Arkansas Row Crops Field Day
Rohwer Research Station
140 Experiment Station Loop, Watson, Arkansas – check back later for more information.

August 5, 2020
University of Arkansas Row Crops Field Day
Northeast Research & Extension Center
1241 W. County Road 780, Keiser, Arkansas – check back later for more information.

August 7, 2020
University of Arkansas Rice Field Day
Rice Research & Extension Center, Stuttgart, Arkansas – check back later for more information.
USDA Implements Immediate Measures to Help Rural Residents, Businesses and Communities Affected by COVID-19 
The FAO All Rice Price Index marked its fifth consecutive monthly rise in May 2020, edging-up by 2.1 points (0.9 percent) to 249.8 points.
Legislative Update
Dr. Jarrod Hardke, Dr. Trent Roberts, & Scott Stiles

25722 Kingsland Blvd.
Suite 203
Katy, TX 77494
p. (713) 974-7423
f. (713) 974-7696
e. info@usriceproducers.com
We Value Your Input!

Send us updates, photos, questions or comments!