Volume 18, Issue 30
August 6, 2021
In This Issue:
  • Wet Weather Complicates Gulf Coast Rice Harvest
  • Washington Update
Wet Weather Complicates Gulf Coast Rice Harvest
As prices continue to soften in Asia, harvest is getting underway in the United States. Despite the later-than-normal start, the U.S. is finally getting its footing as combines hit the field in Louisiana and Texas. While the wet weather is still causing slowdowns in Louisiana, the Texas harvest is clipping along, though initial yield reports aren’t quite as high as hoped. That could be countered, however, by field reports out of Arkansas that display significant optimism at the coming harvest. In Arkansas, the crop is reported as 22% excellent and 44% fair, where, in Louisiana, it is only 3% excellent, and 71% fair.

With the new crop just ahead, the 33 million cwt carry-over reported by the USDA is a concern, and the 120,000 metric tons of rice recently booked to Iraq certainly helps. However, more business must materialize—either to Central or Latin America, or to Haiti—in order to provide any upward momentum in pricing expectations, despite a short crop on account of weather coupled with high corn and bean prices.

There was a significant revision in the World Market Price this week that justifies attention and explanation. From last week’s report to this week’s report, milled price and rough price dropped from $15.92 and $10.18, down to $15.13 and $9.63, respectively. While those involved know this isn’t true from one week to the next, it is important to note that the USDA has updated their algorithms for the new marketing year, which includes the values for their costs of bagging, milling, and exporting milled rice. The updated price, with its downward revisions, also incorporates 2021 loan rates, milling yields, and byproduct prices. The price was decreased by 4.9% for milled long grain rice, and 5.4% for rough rice.

In Asia, prices continued to soften all around with Thai 100% B registering at $385 mt FOB, surprisingly Vietnamese 5% now as allow as $379 mt FOB, and Indian rice, still holding firm, at $385 mt FOB. The new crop harvest ominously hangs over the market as demand wanes, supply is increasing, and freight costs suppress the ability for any upward price movements. The Philippines remain a key buyer in the region, as does West Africa, but not in volumes that will help bolster price in the near term.

In line with weakening Asian pricing, the FAO Rice Price Index notched a two-year low of 101.2 points in July, down 6.6% from last month, and 8.2% from a year ago. The FAO, like many exporters and industry members alike, place the reduced price, not on quality or over-supply of rice, but the simple ardent fact that containers, boats, and logistics are simply too costly to maintain a “normal” price target. COVID-19 has been the punching bag for all excuses, and all involved can only hope that the situation will resolve itself efficiently and promptly in the days ahead.

The USDA Export Sales report posted total sales of 101,000 metric tons, 33,800 tons of which, was long-grain rough to Mexico, and 66,900 tons of long-grain milled to Iraq. The balance was smaller amounts to Haiti and the DR. The Export shipments totaled 43,100 metric tons, with Mexico again taking the lead with 27,600 tons of long-grain rough, 4,400 tons of medium grain rough, 600 tons of long-grain milled, and 100 tons of medium grain milled.

Futures, despite their slight bump on news of the Iraq sale last week, have subsided and settled back into the lows of $13.15, as opposed to the “hype prices” that materialized as high as $13.85 last week. Unless there are doomsday reports that come from Arkansas in the weeks ahead, it is likely we won’t see any significant spikes in futures unless it is correlated with a surprise spike in demand. Average daily volume was up 7.86% to 732, and Open Interest up 6.03% to 7,720.
USRPA's Social Media Campaign in Mexico Continues to Reel in Consumers
URSPA's social media campaign in Mexico continues to grow a following with digital content produced by three well-known chefs and social media influencers.

Content designed to educate the average Mexican consumer about the benefits of integrating U.S. long-grain rice into their meals is shared via original video recipes, stories, reels, and both static and dynamic posts on Facebook and Instagram. The content is designed to engage the audience and prompt participation to give us insight into the consumer's preferences.
Washington Update
On Wednesday, August 4th, the Senate Appropriations Committee approved the 2022 appropriations funding proposal for USDA. Of special note is the inclusion of approximately $7.5 billion in disaster assistance for USDA’s Wildfire and Hurricane Indemnity Program Plus (WHIP+). The disaster funding includes $750 million specifically designed to provide drought relief for livestock producers.

The House Appropriations Committee version of the agriculture appropriations spending bill does not include disaster funding. Earlier on July 27, the House Agriculture Committee approved H.R. 267 which would provide an authorization of $8.5B in disaster funding for the WHIP+ program to cover disaster losses occurring in 2020 and 2021. Although funding must still be provided for H.R. 267, it provides an updated WHIP+ program that addresses past implementation concerns of the WHIP+ program in addition to extending coverage to 2020 and 2021 disaster losses.

The Senate Appropriations Committee’s agriculture spending proposal increases spending by $2.46 billion over FY2021 spending levels for a total of $25.9 billion for FY2022. The path forward for the spending proposal is rocky as the Senate has yet to approve a budget resolution that would provide an agreement on overall spending levels. Republicans in both the House and Senate are currently concerned with the domestic discretionary spending levels compared to defense spending levels. An agreement on spending levels must be reached before October 1st, otherwise, a continuing resolution must be enacted to avoid a government shutdown. 

Previously on June 9, the U.S. Environmental Protection Agency (EPA) and the Department of the Army announced their intent to revise the definition of “waters of the United States.” The process includes two rulemakings: a foundational rule to restore longstanding protections, and a second rulemaking process that builds on that regulatory foundation. The foundational rule will propose to restore the regulations defining “waters of the United States” that were in place for decades until 2015, with updates to be consistent with relevant Supreme Court decisions. The agencies will also pursue a separate, second rulemaking process that further refines and builds upon that regulatory foundation.

The agencies are committed to learning from the past regulatory approaches—the pre-2015 regulations and guidance, the 2015 Clean Water Rule, and the 2020 Navigable Waters Protection Rule—while engaging with stakeholders and crafting a refined definition of “waters of the United States.”
On 8-4-2021, a notice was published in the Federal Register by the EPA and the Army Corps of Engineers to provide a process to receive feedback on a variety of issues related to the “waters of the U.S.” definition. The agencies are requesting comments on such issues as when ditches should be regulated by the Clean Water Act and how prairie potholes and other intrastate, non-navigable waters should be treated.

The public meetings will be held as web conferences in August 2021, with one date reserved in September, if needed. Registration instructions can be found at on the EPA's website here: Public Outreach and Stakeholder Engagement Activities | US EPA

Persons wishing to provide verbal recommendations during the meetings will be selected on a first-come, first-serve basis. Due to the expected number of participants, individuals will be asked to limit their spoken presentation to three minutes. Once the speaking slots are filled, participants may be placed on a standby list to speak or continue to register to listen to the recommendations. The meetings will be recorded and posted on EPA’s website. Supporting materials and written feedback from those who do not have an opportunity to speak can be submitted to the docket as described above. The schedule for the “waters of the United States” meetings is as follows:

  • August 18, 2021, from 3-p.m. to 5 p.m. Eastern
  • August 23, 2021, from 1 p.m. to 3 p.m. Eastern
  • August 25, 2021, from 3 p.m. to 5 p.m. Eastern
  • August 26, 2021, from 6 p.m. to 8 p.m. Eastern
  • August 31, 2021, from 3 p.m. to 5 p.m. Eastern

On July 30, 2021, the Senate confirmed agricultural law expert Janie Hipp as USDA general counsel. It is expected that action will occur soon on additional nominees.

On August 5, 2021, the Senate Agriculture Committee is scheduled to hold confirmation hearing on Homer Wilkes, nominated to be Undersecretary for Natural Resources. For hearing information, here.
USRPA Rice Promotions in Morocco and China
Thank you Two Brooks Farm for sending us amazing rice samples from Mississippi. The rice will be featured in cooking videos produced in collaboration with ATO China and influencer content in Morocco.
Pace of Rural Vaccinations Increases in 19 States
The overall rate of new vaccinations in rural areas remained steady last week. But several states with rising infection rates also saw an increase in the number of rural residents getting vaccinated.
Nineteen states – including several with rising rates of new COVID-19 infections – saw gains in the pace of rural vaccinations last week.

Increases in vaccination numbers in states like Missouri, Arkansas, and Louisiana confirm anecdotal evidence that rising infection rates in those states are creating renewed interest in vaccinations.
White House Releases State Fact Sheets Highlighting the Impact of the Infrastructure Investment and Jobs Act Nationwide
Today, the White House released state fact sheets that highlight the nationwide impact of the Infrastructure Investment and Jobs Act, the largest long-term investment in our infrastructure and competitiveness in nearly a century.

The fact sheets highlight how the historic legislation will deliver for states and territories across the country to repair roads and bridges, improve transportation options, build a network of EV chargers to accelerate the adoption of EVs and help connect every American to reliable high-speed internet.

Trade Update

Food & Ag Regulatory
and Policy Roundup 
Rice Researchers Highlight Variety Development, Growing Methods at 112th Annual Field Day
The FAO All Rice Price Index (2014-2016=100) hit a two-year low of 101.2 points in July 2021, down 6.6 percent from its June level and 8.2 percent below its value a year earlier.
Arkansas Rice Update 
If you’ve been in the field this week then you’ve been cooking. More conversations have turned to debating whether it’s better to be out in the morning in the higher humidity and heavy dew or later afternoon when it’s drier but hotter. Opinions vary, but either way it’s hot.
Upcoming Events
Aug. 4, 2021
CANCELLED: Arkansas Horizon Ag Field Day
Aug. 5, 2021
CANCELLED: RiceTec Arkansas Rice Field Day
Aug. 6, 2021
CANCELLED: University of Arkansas Rice Field Day
Aug. 12, 2021
Aug. 19, 2021
Aug. 19, 2021
University of Arkansas Rohwer Field Day: Rohwer Research Station, Rohwer, Arkansas
Aug. 20, 2021
34th Annual Arkansas Agricultural Hall of Fame Induction Luncheon: Embassy Suites, Little Rock, Arkansas – event details and tickets
Aug. 25, 2021
California Rice Experiment Station Field Day (tentative): Briggs, California
Oct. 7, 2021
University of Arkansas Virtual Rice and Soybean Field Day (tentative date)
Oct. 14 - 17, 2021
The 84th International Rice Festival: The rice festival will return to Crowley, Louisiana, after being canceled last year due to the COVID-19 pandemic.

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p. (713) 974-7423
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