|
In This Issue:
- Washington DC Update
- A 2022 Review of the Farm Bill
- State of the Union
- USRPA Hosts Inaugural Farmer Exchange Program Trip to Louisiana
-
Market Conditions Support Firm Pricing
- Registration Now Open for "Follow the Money Seminar"
| |
|
House Committee on Agriculture Hearing: “A 2022 Review of the Farm Bill: Commodity Group Perspectives on Title 1”
On Tuesday, March 1, the House Committee on Agriculture held a hearing for the review of the Farm Bill Title 1. The Committee focused on the need for updating the safety net, including Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC), to align with increased production costs. The issues discussed were in preparation to improve the upcoming 2023 Farm Bill and its’ commodity programs.
Overall, the witnesses stated that PLC and ARC are beneficial tools, with enrollment rates around 90% for the cotton and rice industries. All witnesses stated that they thought both programs should continue in the 2023 Farm Bill. They all agreed that the safety net these programs provide was important in the role of protecting family farms. Despite its popularity, all witnesses suggested an update to ARC and PLC to align with current costs of production.
When Rep. Baird asked about expected reference prices, Mr. Doyle (representing soybeans) cited Purdue University with their estimated break-even price of $11.70, compared to the current safety net of $8.40. Rep. Crawford asked Ms. James (representing rice) if $14 per hundredweight reference price for rice represented an adequate safety net for farmers, to which she responded no. All witnesses said that they did not have enough current information to recommend a concrete safety net price but were in favor of updating the insurance numbers. Reps. Costa and Bustos asked the witnesses to elaborate on ARC and PLC and any changes that should be included for reauthorization. Ms. Ford (representing cotton) and Dr. Johansson (representing sugar) said that the programs should better incorporate current margins and crop production cost.
The Chairman asked Ms. Ford about the factors that determine farmer participation in either PLC or ARC. She responded that this year she will be using the Stacked Income Protection Plan instead of PLC, which is based off of cost per acre. She said that cost per acre widely determines participation and that many farmers will only break even this year due to the 30-40% increase in cost per acre this year. Base acres were discussed as a challenge to allowing all farmers, particularly young farmers, access to PLC insurance. Ms. Rodgers (representing peanuts) and Mr. Doyle expressed that these were issues that led farmers to receive less PLC insurance. Rep. Cammack asked about the effects of updating the requirements. Ms. Rodgers said this would help young farmers.
Rep. Axne asked if the flexibility of ARC and PLC was helpful for farmers. Mr. Edgington (representing corn) responded that it was helpful. He said the only changes should be to remind farmers about sign-up periods and to update the numbers for coverage every two years. Rep. LaMalfa also asked about the flexibility of PLC and ARC. Ms. James responded that PLC is an important safety net for rice farmers in times of price depression but increasing the reference price helps keep farmers in business.
Members also discussed the impacts of weather and natural disasters, the COVID-19 pandemic, supply chain issues, and trade wars that continue to increase farming production costs. In his opening remarks, Mr. Doyle spoke about the hardship for the soybean industry during the trade war with China, which dropped the price of soybeans 20%. Ms. Berg (representing wheat) said that the wheat industry had a 7.2% net income decrease this year due to input costs. Ms. James said that the rice industry was expected to lose $500 million in 2022 due to increased input prices. Ms. Ulibarri (representing sorghum) discussed the harsh impacts of drought and floods on the agriculture industry, advocating for more crop insurance.
Fertilizer, especially nitrogen-based fertilizer, was highlighted as an input with increased production cost. Mr. Edgington said that the rising fertilizer cost was a large part of the rising costs within the agriculture industry. Ms. Rodgers said the peanut industry in 2021 faced a 22% increase for the cost of production, since the cost of fertilizer doubled. Rep. Scott and Rep. LaMalfa cited the 25-40% increase costs associated with fertilizer. To counteract this issue, Mr. Doyle said that cover crops help bring nutrients into the soil and Ms. Berg said she pre-purchased fertilizer. They both pointed out that these actions are not enough. With higher input costs, many farmers are barely breaking even.
Rep. Scott talked about the increasing need of assistance outside of Title 1 programs due to input costs and current events driving up prices. Rep. Scott warned that increasing estate taxes and eliminating the step-up basis would harm farmers, and therefore the food supply. To listen to the hearing click here.
State of the Union
On Tuesday, President Biden delivered his State of the Union address. In his speech, he discussed the ongoing conflict in Ukraine, the impact of the COID-19 pandemic and efforts to prepare for new variants, the state of the economy, efforts to increase funding for police to combat crime, and his nominee for the Supreme Court. President Biden also discussed how his American Rescue Plan (ARP) helped vaccinate Americans and cut the cost of health insurance and how the Infrastructure Investment and Jobs Act is creating jobs, modernizing ports, airports, and roadways, and promoting environmental justice.
Specifically for agriculture, President Biden emphasized the need for immigration reform that supports farmworkers and discussed how the lack of competition has consolidated industries, hurting small businesses and family farmers.
| |
USRPA Hosts Inaugural Farmer Exchange Program Trip to Louisiana | |
Earlier this week, US Rice Producers Association hosted the inaugural trip of its new Farmer Exchange Program. Created by the USRPA Board of Directors, the Farmer Exchange Program brings together up-and-coming rice producers to network with fellow producers and industry members while learning best practices across the country. The first trip welcomed twelve farmers from Arkansas, Louisiana, Missouri, and Texas to south Louisiana, hosted by USRPA Board Members Mark Pousson and Dustin Watkins.
Trip highlights included a tour of the South Louisiana Rail Facility and the construction of the South Louisiana Rice Mill in Lacassine, LA, as well as education on crawfish production in the area. The trip ended with a Fat Tuesday crawfish boil with Louisiana farmers.
“This first trip was a great success and allowed USRPA to connect with producers in a new way,” Marcela Garcia, President, and CEO of US Rice Producers Association, said. “We’ve had positive feedback from participants and look forward to hosting future events like this in other rice-producing states.”
If you are interested in participating, please contact US Rice Producers Association by email.
| |
Market Conditions Support Firm Pricing | |
The global rice market has been surprisingly consistent since the turn of the year. As it relates to the US, the supply-driven market could be upgraded from sideways to bullish, as long as we are looking at it with cautious optimism. A shorter supply has been the expectation all year based on the increased costs of inputs, and is only reinforced by the current geopolitical environment. The one thing that would confirm a bullish market is a marked increase in milled rice long grain exports—they have been steady, but paddy sales have been a bit stronger by comparison. Iraq would change the picture in an instant, but that doesn’t look to be on the short-term horizon.
In Asia, Vietnam has seen a substantial increase in business despite a slight increase in price this week, largely by way of the Philippines increasing their projected imports by over 700,000 tons. Viet prices bumped up to $405pmt, while Thai prices dropped down to $400pmt, primarily because of fluctuations in the Baht. Thailand is much like the US—steady business all round, but Iraq is the big wild card. In South America, the headline story is the drought where at least 60,000 acres have been lost in Paraguay and Argentina—a sad story for these regions that have become key suppliers in the Western Hemisphere.
On the ground in the US, eyes have turned to planting in most regions as the tail end of first-hand supplies for old crop are being sought out. Texas still has strong prices at $17/cwt when rice can be found. Arkansas is seeing prices between $15.25 and $16.50, as are Mississippi and Missouri. Louisiana has price indications at $15.25, but the industry is much more focused on planting new crop at the moment.
We would be remiss not to mention how the Putin/Ukrainian conflict continues to roil the food and input market, which is further complicating an already strained logistics system. It’s important to know that Russia and Ukraine are two of the most important food suppliers for low and middle-income countries in which tens of millions of people are already struggling for food security. 95% of Ukrainian wheat exports go to the Middle East, Africa, or Asia. The largest importers in 2020 were Egypt, Turkey, Bangladesh, Indonesia, and Pakistan. Russia provides a large percentage of wheat for sub-Saharan African countries like Nigeria and Sudan. These countries who count on Ukrainian wheat will be in trouble, as Ukraine should be planting their wheat fields in the next two-three weeks. But the war is largely preventing that from happening, and supply will be severely diminished in the coming year. The war currently being waged by Putin has a ripple effect that could cause a war for food security in the coming months.
The weekly USDA Export Sales report shows net sales of 70,000 MT for 2021/2022, which were down 17% from the previous week and 39% from the prior 4-week average. Increases primarily for Japan (25,000 MT), Haiti (15,300 MT), Guatemala (9,500 MT), Saudi Arabia (8,600 MT), and Honduras (7,100 MT), were offset by reductions primarily for Mexico (7,900 MT). Exports of 81,100 MT were down 31% from the previous week, but up 2% from the prior 4-week average. The destinations were primarily to Nicaragua (26,400 MT), Mexico (18,000 MT), Japan (13,000 MT), Saudi Arabia (9,400 MT), and El Salvador (8,600 MT).
|  | |
Registration Now Open for "Follow the Money Seminar" | |
“Follow the Money - Closing the Rice Milling Profitability Circle”
Tuesday, May 31, 2022
Registration is now open for the pre-convention seminar, “Follow the Money - Closing the Rice Milling Profitability Circle.” The seminar is sponsored by Superbrix and Applied Milling Systems and will take place on Tuesday, May 31, 2022, and is exclusively open to RMTC 2022 attendees.
This full-day seminar focuses on maximizing the profit potential in every grain of paddy that enters the rice milling process, covering the analysis and management of the rice milling process on a fiscal rather than a technical basis and optimizing the profit potential of broken rice.
Registration for the seminar is $200. Don't forget that Early Bird Registration for the RMTC is available through March 14th.
Click below to register for the RMTC and the "Follow the Money" seminar!
| | |
|  |
Food and Ag Regulatory and Policy Roundup | | |
|
Vietnam: Rice Trade - Monthly
This report provides trade data on Vietnam's monthly rice exports by grade and destination and weekly export quotes for rice by grade.
| | |
The FAO All Rice Price Index rose by 1.1 percent in February 2022 to reach 102.5 points.... | | |
H. Rouse Caffey Rice Research Newsletter | | |
| | |
| |
|
University of Missouri Extension Rice Meeting
8:30 a.m - 12:30 p.m.; The Gathering @ Versity Crossing, Dexter, MO
| | |
| |
|
RESCHEDULED
Missouri Rice Research & Merchandising Council Annual Meeting
The Gathering @ Versity Crossing, Dexter, MO
| | |
| |
34th Annual Arkansas Agricultural Hall of Fame Induction Luncheon: Embassy Suites, Little Rock, Arkansas – event details and tickets (RESCHEDULED) | |
USRPA does not discriminate in its programs on the basis of race, color, national origin, gender identity, sexual orientation, religion, age, disability, political beliefs, or marital/family status. Persons who require alternative means for communication of information (such as Braille, large print, sign language interpreter or translation) should contact USRPA at 713-974-7423. | | | | |
