Blog - Page 25 of 110 - US Rice Producers Association

House Agriculture Appropriations Holds a Member Day

On Thursday, the House Appropriations Committee Agriculture Subcommittee held a member day where members of the House of Representatives not on the Committee could voice their input on the USDA budget request for FY2025. During the event, Democratic members emphasized the importance of investing in nutrition programs. They were supportive of the requested increase in funding for the WIC program. Also discussed during the event was research in precision agriculture and its potential to improve production efficiency.

Rep. Tom Cole Elected Chairman of the House Appropriations Committee On Wednesday, the House Republican Conference elected Rep. Tom Cole (R-OK) to be chairman of the House Appropriations Committee. Rep. Cole will fill the role currently held by Rep. Kay Granger (R-TX), who announced she would be stepping down after the FY2024 bills were completed. Rep. Granger will also be retiring at the end of this year after serving since 1997. Rep. Cole previously served as the chairman of the Departments of Transportation and Housing and Urban Development Subcommittee.

A lot is happening on the ground with planting underway across most states. The April 1 Crop Progress report gives a solid indication of where things are at kicking off the second quarter. Louisiana is far and away the leader of the pack, with 51% registered as planted as of March 31. Texas follows with 32%, Arkansas with 3%, Mississippi with 1%, and Missouri and California both still at 0%. Rice emerged is right on pace with last year, with Louisiana coming in at 38% and Texas at 14%.

The prospective planting report also came out over the Easter holiday, and pegs total acres at 2.931 million. This is broken down with 78% of the crop being long grain, 21% being medium grain, and 1% registering as short grain. Overall, this is very close to industry expectations, though most expect acres to crest 3 million by the time planting is done.

The milled market has been steady without any fireworks. The problems on the horizon are the gangs in Haiti and Iraq’s lack of access to the U.S. dollar to procure U.S. rice. Prices on the ground in Arkansas, Mississippi, and Missouri are $17.50/cwt if there’s anything left in first hands. Louisiana is at $18.52/cwt, and Texas is at $19/cwt.

A recent GAIN report on Peru shows that rice imports in 2024/25 are forecast at 100,000 metric tons. Uruguay was the primary supplier in 2023, accounting for 52% of the market share, with Brazil following at 39% market share. U.S. rice has been priced out of the Peruvian market in recent years, but a strong supply creates the opportunity to access this market again. A challenge for U.S. rice is grain quality particularly cooking quality as consumers are considered the most demanding in the Americas. Rice is a staple food in Peru, with per capita consumption coming in at 163 pounds per year. That puts total consumption stable at 2.7 MMT in 2024.

A GAIN report on Saudi Arabia was also released. Saudi Arabia is unique because it produces no rice of its own and procures both medium grain and long grain (largely parboiled) from the United States. The growing tourist economy means that U.S. rice exports are targeted for growth in the coming years. From this year to last year, consumption has increased by 6% on account of increased tourism and a growing labor force, up to 1.6 MMT. Proximity, price, and a preference for Basmati make India the largest supplier of rice to Saudi Arabia with at least 75% of the market share. Pakistan is second, and the United States is third with 6%. Post expects U.S. rice exports to Saudi Arabia to reach 100,000 MT by the end of the year.

The weekly USDA Export Sales report shows net sales of 112,700 MT this week, down 82% from the previous week and 36% from the prior 4-week average. Exports of 51,300 MT were down 62% from the previous week and 53% from the prior 4-week average.

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House Agriculture Committee Holds a Hearing on Chinese Influence in Agriculture

On Wednesday, the House Committee on Agriculture held a hearing titled “The Danger China Poses to American Agriculture.” During the hearing, there was bipartisan concern over the impacts of Chinese influence on U.S. agriculture and national security. Members of both parties agreed on the importance of remaining competitive in the global agricultural market. Republicans focused on the variety of threats China poses to the U.S., including intellectual property theft, cybersecurity attacks, and the acquisition of farmland by foreign interests. Democrats warned that policy decisions may inadvertently impact the Asian American community and that aggressive tariffs could have negative impacts on the U.S. and its trading allies. Other topics discussed include trade promotion programs within the Department of Agriculture (USDA), the farm, and potential improvements to the tracking and reporting system for land purchases. A recording of the hearing can be found here.

Secretary Vilsack Testifies on the FY2025 Budget

On Thursday, Secretary of Agriculture Tom Vilsack testified before the House Agriculture Appropriations Subcommittee on the USDA budget request for fiscal year (FY) 2025. During the hearing, Republicans expressed concern over the total spending level requested, which is roughly $3 billion over the FY2024 enacted level. They were also concerned about the Secretary’s use of the Commodity Credit Corporation and the use of SNAP benefits to purchase unhealthy foods. Democrats were dissatisfied with the lack of Democratic input in the FY2024 process and were supportive that the request included a funding increase for the WIC program. There was agreement in the hearing among the parties on the importance of USDA’s role in protecting food security and supporting rural development. A recording of the hearing can be found here.

The focus for farmers is planting. Texas and Louisiana are underway, but fields in Arkansas, Mississippi, and Missouri are being prepped. California is still waiting out the spring weather with another storm expected through the weekend. Texas has passed 30% planted. Prices for paddy have remained firm, even as the milling activity has quieted down a bit. Domestic business remains, but trouble in Haiti has the potential to snarl up the flow of exports in the coming weeks.
A recent GAIN report for Mexico offers hope for a return to historical norms in the Mexico-U.S. rice relationship. Mexico’s imports of U.S. rice increased from Oct-Dec 2023 by 406% compared to the previous year! Recall that a significant market share was lost to Brazil post-COVID, where Oct-Dec 2022 recorded only 47,554 MT, compared to the new 240,576 MT. In the same period, imports of Brazilian rice decreased from 174,534 MT to 32,109 MT, or an 82% reduction. This is great news for the U.S. rice industry as we look down the barrel of the largest crop in years. Post forecasts total rice production in Mexico for MY2024/25 at 233,000 MT, an increase of 7% from last year. Post’s milled production estimate for MY2023/24 is 150,000 MT, a 5% increase over the previous year. Imports are anticipated to increase by 2%, up to 840,000 MT, where the U.S. is expected to be the largest supplier. 80% of Mexico’s imports are paddy, and most of that comes from the U.S. Of the remaining 20% of milled rice, Uruguay is the largest supplier.
We should point out that the Mercosur harvest is struggling to get into full swing, hampered by excessive rains and flooding in some key areas. Reports of lodging in Brazil have been frequent. Export prices in Brazil hover around $420/ton FOB Rio Grande do Sul. Numerous buyers in Mexico and Central America have been “waiting on lower prices due to the Brazilian harvest.” However, as of this writing, there is no clear path forward. At the same time, several vessels have been recently booked destined for Mexico and Central America. The general feeling is that field yields will be off. As in recent years, the weather is driving the market in many corners of the hemisphere with its effect on milling yields, grain quality in addition to field yields. No two years are alike…
The resurgence of Mexican demand is welcomed news in the face of emerging problems in trade with Iraq. In Q4 2023, an announcement said that Iraq was to end all trade based on the USD on Jan 1, 2024, to curb ties with Iran. When this happened, the rice industry wasn’t quite sure what to expect. The MOU and business relationship has been a saving grace for the U.S. rice industry in recent years, and losing that outlet as a result of a geopolitical dispute would be the most recent of a long list of problems. What is now coming to light is that Iraq not being able to trade via the U.S. Dollar essentially halts (ie: prohibits) their ability to purchase U.S. rice, therefore rendering their MOU DOA unless some form of diplomacy can find a solution. This means that the business already on the books is safe, but any future tender will have to deal with this additional complication. Never a dull moment…
In Asia, the market seems to be “resting” with Thai prices hovering around $600 pmt and Viet prices just below $595 pmt. India’s export ban is still in place, but steady shipments to W. Africa remain via G2G deals. We mentioned last week and will continue to say that these “exception exports” are good for market stabilization. When India does officially open back up after their elections, the shock to the market will be muted because of the steady stream of exports that have been making it out the door as G2G exceptions.
The weekly USDA Export Sales report shows net sales of 142,100 MT this week, up noticeably from the previous week and the prior 4-week average. Increases were primarily for Colombia (44,000 MT), Mexico (31,100 MT), Japan (26,000 MT), Honduras (13,200 MT), and Haiti (7,100 MT). Exports of 106,400 MT were up 19% from the previous week and 12% from the prior 4-week average.

USDA and EPA appropriations bills signed into law

On Saturday, President Biden signed into law a six-bill appropriations package containing the funding bills for both the Department of Agriculture (USDA) and the Environmental Protection Agency (EPA) for fiscal year (FY) 2024. The bill included about $26.3 billion in discretionary funding for USDA and included $1,000,000 for the Texas A&M Agrilife Extension Service for a project on water-smart rice in Texas. This project was requested by Rep. Michael McCaul (R-TX). For EPA, the bill includes $9.2 billion in funding. It also directs EPA to consider the best available science when implementing regulations for pesticide licensing and directs EPA to brief the Appropriations Committees on potential revisions to its pesticide rule regarding plant-incorporated protectants (PIPs). It also directed EPA to brief the Appropriations Committees on how the Agency is complying with the recent court decision on its chlorpyrifos rule. The bill text for the appropriations package can be found here. The explanatory report for USDA can be found here and the explanatory report including EPA can be found here, with the EPA section beginning on page 34.

White House releases 2025 Budget Request

On Monday, the White House sent Congress its FY2025 budget request. In total, the budget requested $7.3 trillion in spending across the federal government, an increase of 5.6% over the FY2024 budget request. The budget requested $29.2 billion in funding for USDA and $10.994 billion for EPA, both increases over FY2024 levels but less than what was included in the President’s FY2024 budget request. The budget also outlined the Administration’s priorities for the next farm bill, which included protecting and enhancing investments in conservation programs and opening new market opportunities for U.S. producers. It also includes support for improving the crop insurance program to help producers proactively protect against risk. It also outlined tax proposals to increase revenue to offset the increases in spending, including recommendations to allow the step-up in basis and estate tax provisions to expire at the end of 2025. The full budget request can be found here. The budget request for USDA can be found here and the EPA budget request can be found here.

Last week we speculated that the WASDE report might significantly lower ending stocks. The stocks were lowered, but not by as much as the industry might speculate. Ending stocks were reduced by 1 million cwt down to 41.5 million cwt, which is still 37% higher than last year. All rice exports were raised by 1 million cwt to 88 million cwt, comprised of a 3 million cwt increase of long grain exports offsetting a 2 million cwt decline of medium/short grain exports. The long grain average price was raised $0.10/cwt up to $16.10, medium/short was raised $0.50/cwt to $18.00, and the California medium grain was raised by $2.00/cwt up to $32.00.
The March Food and Agriculture Organization Rice Price Update shows that the all rice price index averaged 140.5 points in February 2024, 1.6% below January, but 12.3% higher than this time last year. Throughout February, Indica prices remained fairly stable, falling only 1.4%, while fragrant rice popped by 2.7%. The report states that Japonica prices were stable, and there will be a revision in that analysis in their April update as medium grain varieties have seen a more drastic decline in the last 30 days. Prices for long grain softened the most in Vietnam in light of fresh supplies from their harvest even though they won a significant portion of Indonesia’s tenders. All in all, the long grain market has been relatively steady in the last month when one considers the market volatility that we’ve become accustomed to since India’s export ban.
On the ground, pricing remains strong in the spot market when rice can be found. Mississippi is reporting in at $18/cwt, and is expected to begin planting sometime in late March or early April. Texas is well underway, certainly over 10%, and essentially out of cash rice for the spot market. Louisiana is just getting underway with the new planting season, perhaps just broaching the 10% seeded mark. Like Texas, there is not much old crop to be found, with prices around $18.52/cwt. Arkansas and Missouri both sit at $18/cwt over loan, and planting is just around the corner.
The weekly USDA Export Sales report shows net sales of 43,800 MT this week, down 48% from the previous week and 46% from the prior four-week average. Increases primarily for Mexico (37,600 MT), Saudi Arabia (8,600 MT), Japan (6,000 MT), Honduras (5,000 MT), and Canada (1,100 MT, including decreases of 100 MT), were offset by reductions for Jordan (14,000 MT), Guatemala (700 MT), Haiti (500 MT), and El Salvador (300 MT). Exports of 89,600 MT were down 12% from the previous week and 7% from the prior 4-week average. The destinations were primarily to Mexico (44,300 MT), Haiti (27,300 MT), Saudi Arabia (9,900 MT), South Korea (3,400 MT), and Canada (1,900 MT).

Washington, D.C. Update