In This Issue:
- U.S. Rice Industry Lacking Milled Rice Market Demand
- USRPA Continues to Build Strong Relationships in Rice
- Washington DC Update - USDA Announces Pandemic Assistance for Producers
- PAYGO Sequestration
- USRPA Attends Virtual Andean Regional Conference
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U.S. Rice Industry Lacking Milled Rice Market Demand
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The cash market was slow in terms of trading activity this week, however, there were some notable price improvements throughout the Delta. Overall, the cash market is garnering minimal attention from sellers in the lower Delta who have now shifted their focus to planting. When it’s found, rice in Texas is trading for $6.80 per cwt so long as the milling yield is greater than 55%. According to some sources only 600,000 cwts still resides in the Lone Star state.
In Louisiana, where supplies are also extremely tight, the market was reported to have firmed to $14.20 per cwt, however, there weren’t any sales confirmed at that level. Planting in both of these states is well underway, which will be reflected in the USDA’s first crop progress report expected to be released next week. In Arkansas, growers are offering $13.25 per cwt but are being met with slightly lower bids, or in some cases no bids at all. The bid in Mississippi has also improved slightly from the past few weeks and trades around $13.25 per cwt loaded barge surfaced earlier this week. Demand for U.S. long-grain lost more ground against last year’s pace this week and is now being reported down 13% YTD.
Paddy exports have worked hard to offset the loss of milled rice demand, but so far, the milled rice gap is just too large to fill. Medium and short-grain demand is relatively flat against last year, despite surging prices in California. The planting situation is far from known in the West Coast state as water sales and cuts are still being deliberated.
If the container shortage plaguing global trade wasn’t enough, adding insult to injury this week, “The Ever Given” is the container ship now blocking the Suez Canal. On Thursday, March 23rd, the vessel was traveling from China to Europe and was blown off course by a strong gust of wind and is now firmly lodged in each bank of the shipping lane. The blocked traffic in both directions has resulted in one of the largest port disruptions in recent history. The halted trade is causing an estimated $9.6 billion of losses per day, and there are more than 200 vessels carrying oil, grain, and goods that are backed up.
They are faced with three options, which are to wait until the ship is dislodged, consider going around the Cape of Good Hope—which can add days to weeks of delays depending on destinations, or (for those few carriers that can) try to unload and ship via rail. Roughly 30% of the world’s shipping container volume travels through the Suez Canal on a daily basis, and the popular trade route accounts for 12% of total global trade. The oil industry will be heavily impacted, as both Russia and Saudi Arabia are the two top exporters of oil through the canal. India and China are the primary destinations for oil, followed by the EU. The only bright spot here is that demand for fossil fuels in the EU is down right now because of a new round of lockdowns on account of COVID-19.
The direct impact to the movements of rice is unclear at this point, but will no doubt create repercussions in food deliveries and demurrage charges for traders involved in the region. The current estimates by port authorities to resolve the issue and resume trade ranges from days to weeks.
The nearby futures contracts showed minor signs of improvement from last week, however, the further out contracts posted small losses, a further indicator of the market telling growers to consider, at least in part corn or beans for the upcoming year. Average open interest was up just over 2% from the previous week but volume dropped by 12%, which usually points to a market attempting to gather momentum in order to bump upwards. However, if that momentum fails to be reached, the market could see a reverse sharply to the downside. Given the fundamentals at hand, upward momentum seems difficult to grasp.
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USRPA Continues to Build Strong Relationships in Rice
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Despite concerns of COVID-19, the USRPA enjoyed the opportunity to meet with Mariam Toure, Head of Communication and Rice Promotion for the Republic of Cote D’Ivoire.
Rice is such an essential basic food in the country and an important farming activity, that the Ivory Coast government has a separate government department titled "Ministry of Rice Promotion."
The country is a major importer and transshipment point to other markets in the region. The construction of new rice mills has created increased capacity, exceeding domestic production.
Dwight Roberts, President & CEO of the US Rice Producers Association accompanied Ms. Toure to the University of Arkansas Rice Research & Extension Center, near Stuttgart, where they met with Jarrod Hardke and Donna Frizzell.
Ms. Toure plans to bring a team from the Ivory Coast to the USRPA’s Rice Market & Technology Convention in July.
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Washington DC Update - USDA Announces Pandemic Assistance for Producers
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This week, March 24th, Agriculture Secretary Tom Vilsack announced that USDA is establishing new programs and efforts to bring financial assistance to farmers, ranchers and producers who felt the impact of COVID-19 market disruptions. The new initiative—USDA Pandemic Assistance for Producers—will reach a broader set of producers than in previous COVID-19 aid programs. USDA is dedicating at least $6 billion toward the new programs. The Department will also develop rules for new programs that will put a greater emphasis on outreach to small and socially disadvantaged producers, specialty crop and organic producers, timber harvesters, as well as provide support for the food supply chain and producers of renewable fuel, among others. Existing programs like the Coronavirus Food Assistance Program (CFAP) will fall within the new initiative and, where statutory authority allows, will be refined to better address the needs of producers.
USDA will reopen sign-up for CFAP 2 for at least 60 days beginning on April 5, 2021. The USDA Farm Service Agency (FSA) has committed at least $2.5 million to improve outreach for CFAP 2 and will establish partnerships with organizations with strong connections to socially disadvantaged communities to ensure they are informed and aware of the application process.
The payments announced today under Part 3 will go out under the existing CFAP rules; however, future opportunities for USDA Pandemic Assistance will be reviewed for verified need and during the rulemaking process, USDA will look to make eligibility more consistent with the Farm Bill. Moving forward, USDA Pandemic Assistance for Producers will utilize existing programs, such as the Local Agricultural Marketing Program, Farming Opportunities Training and Outreach, and Specialty Crop Block Grant Program, and others to enhance educational and market opportunities for agricultural producers.
For more information click here.
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U.S. Senator John Boozman (R-AR), Ranking Member of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, warned again this week that the mandatory spending cuts that will result from the Democrats’ $1.9T reconciliation package should give pause to the idea of using the same process to further increase deficit spending to address climate change. Boozman expressed concern earlier here. The use of the budget reconciliation process risks triggering billions of dollars in automatic spending reductions under statutory pay-as-you-go (PAYGO) rules. Unless federal law is changed, PAYGO will zero out virtually all farm program spending over the next five years. Although the House has passed legislation to address potential PAYGO cuts, the bill would need to reach the 60-vote threshold in the Senate.
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USRPA Attends Virtual Andean Regional Conference
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This week, Bianka Rodriguez, USRPA Marketing & Western Hemisphere Promotions Director, along with Sarah Moran and Asiha Grigsby of the USA Rice Federation, attended the Virtual Andean Regional Conference with FAS Officers. The conference consisted of a 30-minute session, moderated by Adam Klein, Agricultural Attaché at Colombia and Venezuela. Casey Bean, Ag Counselor, Bret Tate, FAS Trade policy lead for the Andean Region, and Lady Gomez. The session primarily focused on updating Posts’ analysis of the Colombia and Venezuela markets. US Rice Producers Association is proud to have close working relationships with Post throughout the world.
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Don't Miss RMTC's Early Bird Pricing of only $600 USD
Extended to April 11th
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Standard Registration (April 12 - June 6) = $800 USD
Late/Onsite Registration (Starts June 7) = $1,000 USD
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The Rice Market & Technology Convention
will take place in The Woodlands, Texas
July 6-8, 2021
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The Rice Market & Technology Convention is committed to the health and safety of its attendees and we will continue to follow CDC Guidance for Organizing Large Events and Gatherings. RMTC will provide attendees PPE such as masks and hand sanitizer, room layouts will be modified, and crowd limits will be enforced to adhere to the physical social distancing protocols.
Large, wide-open facilities and opportunities for outdoor gatherings make the Woodlands Resort the perfect place to network while allowing for social distancing.
If you have any questions or require special accommodations, please contact the USRPA at [email protected].
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In the 2021/22 MY, South Africa’s rice imports are expected to increase by one percent to 1.06 million tons on a marginal rise in demand. In the 2020/21 MY, Post estimates South Africa will import about 1.05 million tons of rice.
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Rice production and exports are expected to recover in 2022. MY2021/22 corn consumption is forecast to slow down due to a shrinking supply of locally produced corn and tighter supplies of imported corn from neighboring countries.
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Rice export prices declined 1-2 percent for all varieties as off-season rice supplies continued entering the market, putting downward pressure on domestic prices.
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Food & Ag Regulatory
and Policy Update
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Arkansas Rice Update
Jarrod Hardke
and Scott Stiles
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25722 Kingsland Blvd.
Suite 203
Katy, TX 77494
p. (713) 974-7423
f. (713) 974-7696
www.usriceproducers.org
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We Value Your Input!
Send us updates, photos, questions or comments!
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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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