Chief Operating Officer Mollie Buckler and USRPA consultant Stuart Hoetger
represented US Rice Producers Association on the USDA Agribusiness Trade Mission
to Panama City, Panama this week. The delegation, which included 26 agribusiness
and farm organizations and two state departments of agriculture was led by USDA
Trade and Foreign Agricultural Affairs Under Secretary Alexis Taylor.
The trip itinerary included tours of local retail stores, a distribution center, the
opportunity to see retail promotions featuring U.S. products, and meetings with
industry members from the region. In addition to Panama, representatives from the
Dominican Republic, Costa Rica, Nicaragua, El Salvador, Guatemala, and Honduras
attended trade mission activities.
Over the last 10 years, the U.S. has exported an average of 46,000 MT to Panama
annually, and approximately 65,000 MT in the 2022 calendar year.
“This trade mission was an excellent opportunity to connect with Central American
rice importers and USDA-FAS colleagues from CAFTA-DR member countries,”
Buckler said. “The market for U.S. rice is changing dramatically in this region, and
it’s extremely important for USRPA to have boots on the ground as often as possible.
We’re proud to have been able to represent the U.S. rice farmer in this capacity this
week.”
Read the USDA’s Press Release about the Trade Mission here.
South Louisiana Rail Facility (SLRF) continues shipping U.S. Rice by vessel to
Columbia tenders in an SLRF / Agreeta partnership
Market Update: Colombia Consumes 95 Pounds Per Capita
Similar to last week, planting is underway in Louisiana, while most other states
eagerly await better weather and ideal timing. Arkansas is just around the corner
from getting in the field, but cold and wet weather is pushing start dates out a
bit. This is exactly the case for California as well, where despite expectations for
100% water allocations, now many are worried they won’t be able to plant because
of too much water. The storms keep coming and the forecast isn’t letting up. Not
having decent drying weather for the fields will push out fieldwork, which will likely
cause some prevented planting to occur. This is welcome news for the folks who
were able to contract medium grain rice in the south several weeks ago, as the
actual California acreage keeps whipsawing back and forth.
A recent USDA GAIN report on Colombia, which is a key trade partner for the
U.S. because the U.S.-Colombia Trade Promotion Agreement was published this
week. Colombia has an average per capita consumption rate of approximately 95
pounds, which is higher than several other South and Central American countries.
Given that all other trade agreements have or are expiring and resulting in a dropoff of exports, Colombia provides a steady stream of business and is extremely
important to the market matrix, as the TRQ for U.S. rice for 2023 is 128,205 metric
tons. Over the last six marketing years, this means that the U.S. has been
responsible for about 35% of Colombia’s imports each year. Compare that to
Mexico, where only a few years ago the U.S. enjoyed nearly 100% market share
and now struggles to maintain levels that exceed 50% market share.
Domestic production in Colombia is expected to increase, due in part to the
implementation of better agronomic practices through a technology transfer
program called AMTEC. This program provides information to increase productivity
and reduce production costs. Domestic rice prices have also been on the rise in
Colombia, incentivizing more production. In January 2022, paddy was priced at
$327 pmt. One year later in Jan 2023, paddy increased 28% up to $418
pmt. Production is expected to increase just under 4% this year, up to 1.36 million
acres.
Moving to Asia, prices rebounded a bit in Thailand, bouncing back to $460 pmt
where it was two weeks ago after dropping to $450pmt last week. Vietnam,
likewise, is at $460 pmt after a jump this week. Pakistan rice is quoted just below
$450 pmt, achieving relative parity for the first time in several months. This firming
can be attributed to steady business and currency fluctuations, namely the
strengthening of the Thai Baht.
And not to beat a dead horse, but the weekly USDA Export Sales report was ugly
once again. There was a spike two weeks ago, but we are back down to net sales of
only 14,900 MT, down 42% from the previous week and 73% from the prior four-week average. Exports of 14,300 MT were up 37% from the previous week, but
down 76% from the prior four-week average.
In This Issue:
| "El Festival de Arroz" (The Big Pot Rice Festival) was celebrated on March 11 at IRTRA Retalhuleu. IRTRA is a theme park in Guatemala City, Guatemala, with an average of 8,000 visitors daily. The objective of the festival was to promote the consumption of 100% U.S. rice. 3,000 Jambalaya dishes were served with delicious ingredients: U.S. rice, pork, shrimp, squid, and oysters. The attendees enjoyed a musical show while eating this rich U.S. rice plate. Guatemala imported 96,000 MT of paddy rice from the United States. |
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USRPA joins 400 agricultural organizations calling for sufficient farm bill budget resources
On Tuesday, USRPA, along with 400 agricultural organizations from across the country, signed a letter to House and Senate Budget Committee leadership advocating for sufficient farm bill funding. Read the full letter here.
Secretary Vilsack testifies before Senate Agriculture Committee
On Thursday, Secretary of Agriculture Tom Vilsack testified before the Senate Agriculture Committee. During the hearing, Republican senators questioned Secretary Vilsack about increases in spending for nutrition programs due to changes at the Department. Republicans have voiced concern over how these changes will impact programs that support production agriculture. Democratic senators insisted there will be continued support across nutrition programs in the next farm bill. A recording of the hearing can be found here.
On Wednesday, the House Agriculture Committee held a listening session in Waco, Texas, to get stakeholder input as it prepares for the upcoming farm bill. Dr. Thomas Wynn attended on behalf of USRPA and advocated for greater assistance for the farm safety net programs and updates to reference prices. He also thanked Congress for the $250 million in assistance for rice producers included in the FY2023 omnibus appropriations bill passed in December 2022.
"As we move into the Farm Bill season, this is the most important piece of legislation on the docket for me this year simply because the failure for the rice market to reflect current input costs of production requires me to lean ever more heavily on the safety net benefits that are encapsulated within that piece of legislation," Wynn said.
A recording of the listening session can be found here. Dr. Wynn’s testimony begins around the 1:30:00 mark.
| With planting officially kicked off in a few Southern states, there is muted optimism that this year could be the one where we see Haiti back in the market, and possibly renewed interest from Iraq to keep the mills busy. While the Central and South American markets don’t expect a significant trend change, having additional supply this year should help to make US rice a little more competitive. But the eye-popping export sales report from last week helped point out that there is still good news and good business to be had, despite the drop-off in exports to the Western Hemisphere. Last week we mentioned Panama’s tender, and that it would take hope and a prayer for any U.S. rice to find its way into the business. It is still preliminary, but it appears that U.S. long rice will be utilized to cover at least a portion of the tender. The tender appears to have been awarded to two separate trading houses both of which expected to originate the bulk of the rice from Uruguay and the USA. Mercosur has the rice at attractive prices, but Paraguay’s logistics make it a difficult option, and Brazil lacking a phytosanitary protocol with Panama makes that origin not ideal either. Therefore, U.S. and Uruguayan rice will likely be the quickest solution to fulfilling the business. Given that this was not anticipated demand, it helps bring the carryout number from the USDA into parity with what the industry is expecting. There is more to report on here next week when we have more complete information, but the initial read is “good news.” Louisiana has reported that it is nearly 80% planted already, aided by good weather and a supply chain ready for rice planting. There have been cold weather that has delayed some farmers from getting in the field, but not by a significant margin. Texas is also well into its planting season, now expected to be at approximately 35% complete of its expected short crop. Arkansas, Mississippi, Missouri, and CA are still waiting in the wings to get in the fields. CA, with a drastic change in direction because of multiple atmospheric rivers, is now anticipating water allocations of at least 75%, and as high as 100% for all rice-growing regions. This was unfathomable only weeks ago, but an example of how quickly things can change in rice. In Asia, prices softened a bit again in Thailand, moving down appx $10 pmt to the $450 pmt to level. Vietnam has stayed resilient in the $445-$450 pmt range. Indian prices are below that in the $430-$440 pmt range, but still difficult to ascertain because of the tariff. Last week we dove into the sizeable rabi crop that tipped the scales once again for India for a third consecutive crop; we didn’t mention the unfair subsidies the Indian government is giving its farmers to produce the grain. USRPA has championed the WTO to hold India accountable for the unfair marketplace they are creating, and another record crop is clear evidence there is no intent to take the WTO sanctions seriously. The weekly USDA Export Sales report is back in the doldrums after last week’s exciting jump. Sales returned to this year’s “normal” of 25,800 MT for 2022/2023, down 82% from the previous week and 59% from the prior 4-week average. Increases were primarily for Japan (13,000 MT), Mexico (10,200 MT), Saudi Arabia (1,200 MT), Canada (1,000 MT), and Belgium (100 MT). Total net sales of 13,000 MT for 2023/2024 were for Japan. Exports of 10,400 MT were down 94% from the previous week and 86% from the prior 4-week average. The destinations were primarily to Mexico (5,900 MT), Canada (3,100 MT), Jordan (600 MT), Saudi Arabia (200 MT), and the United Kingdom (200 MT). |
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In This Issue:
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