Congress Acts to Attempt to Avoid Rail Strike
On Wednesday, the House of Representatives approved a bill to avert a freight rail strike on a bipartisan 290-137 vote. The bill would impose the Tentative Agreement introduced by the President’s Emergency Board in September which would increase rail worker pay by 24% and provide workers an additional paid day off. The House bill also included seven days of paid sick leave for rail workers, something not in the original agreement. The bill’s passage follows a call from the White House to Congress to act to avoid a strike on Monday. On Thursday, the Senate passed the Tentative Agreement on an overwhelmingly bipartisan 80-15 vote. A measure to provide paid workers with paid sick leave did not pass. The bill now goes to the President to be signed into law.
EPA Proposes new RFS
On Thursday, the Environmental Protection Agency (EPA) released a proposal to change the Renewable Fuel Standard (RFS). The proposal would raise the minimum required amount of biofuel which must be mixed into gasoline and diesel to 22.68 billion gallons in 2025. For 2022, the required minimum quantity is 20.87 billion gallons. In addition, the EPA proposal would create a credit to incentivize certain biomass production, including natural gas generated from landfills and at farms.
House Agriculture Committee Members Lead Delegation Trip to Cuba
On November 23, Reps. Salud Carbajal (D-CA), Jim Baird (R-IN), and Jahana Hayes (D-CT) concluded their congressional delegation trip to Cuba. The four-day trip consisted of meetings with Cuban farmers, agricultural business operators, and local officials to discuss the current state of agriculture in Cuba. In addition to agriculture, the delegation also raised concerns surrounding human rights, migration, and consular issues. The Committee members also met with the Vice President of Cuba Salvador Valdés Mesa, officials from the Cuban Ministry of Foreign Affairs, and Representatives of the National Assembly.
| The market has remained consistent since Thanksgiving. This is typical for this time of year though, as historically there have not been large chunks of business conducted during the holiday season. This year, however, it is a bit more noticeable because there haven’t been any large chunks of business since the Iraq tenders have completed. The stark lack of offshore sales is crossing into the worrisome category, and even the strong domestic market will likely not be able to continue keeping prices elevated to the same degree moving forward. The price of U.S. long grain compared to the competition continues to maintain a spread not seen in recent history. While U.S. long grain 5% has dropped from $740pmt down to $730pmt, it is still nearly $200pmt higher than its Western Hemisphere counterparts. Uruguay at $560pmt, Brazil at $565pmt, and Argentina at $505pmt. Just after the Thanksgiving break on November 28, a GAIN report on Brazil was published highlighting the competition that the U.S. now faces from this Western Hemisphere juggernaut vying for our core export market in Central America, namely Mexico. First things first, is that Post reduced the forecast for planted rice in Brazil in the coming year to a historical low of 3.9 million acres because crops like soybeans and corn are much more profitable and require less maintenance. This 3.9 million acre is 2.5% lower than last year, and 6% lower than the year before. |
 Despite the downturn in U.S. rice exports, the South Louisiana Rail Facility continues to market rice in nearby markets. Their newest development is a barge terminal located at the Port of Lake Charles (pictured) with loading activity underway this week. In just 10 short years, rail, barge, vessel, and now the Agreeta Rice Mill Partnership that will kick off next month has given some 200 rice farmers in SW Louisiana and SE Texas access to markets not previously available. |
| As a threat to the U.S. rice industry, the Brazilian rice grower industry organization FEDERARROZ is combatting higher input costs by advocating for a more ambitious commercial agreement with the Mexican government. Right now, Brazil has a quota of seventy-five thousand tons per year of rice that can be exported tariff-free. They are pushing to grow this agreement, further putting pressure on the U.S. long-grain industry. In light of this, Post has increased the export forecast for Brazil from 700,000 MT up to 900,000 MT, an ominous foreboding for the U.S. Exports to Mexico from Brazil have exceeded 305,000 metric tons as of September this year, exponentially higher than in previous years. The reason is two-fold; the first is the high prices from the U.S., and the second is the tax exemption that Mexico placed on imported rice to discourage food inflation. Mexico now accounts for 60% of Brazil’s paddy exports, a statistic that was unfathomable only a few years ago. For example, in 2021, the U.S. exported 765,000 MT to Mexico, then in 2022 it was 625,000, and down to 373,000 through September of this year; barely more than Brazil. Mexico is still procuring the same amount of rice, the U.S. is just getting much less of the business. In Asia, things look very similar to pre-Thanksgiving numbers. Thai prices are at $430pmt, Viet prices at $435pmt, and Indian prices are now closer to $395pmt with their tariff. Prices remain firm that this level in the middle and far east, and there is little expectation for significant price shifts outside of some unforeseen weather or geopolitical event. The weekly USDA Export Sales report net sales of 25,300 MT this week primarily for Japan (13,000 MT), Haiti (7,100 MT), Honduras (3,900 MT), Belgium (300 MT), and Canada (200 MT). Exports of 23,500 MT were primarily to Colombia (11,400 MT), Haiti (7,100 MT), Canada (1,900 MT), Mexico (1,700 MT), and Saudi Arabia (500 MT). |
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The US Rice Producers Association applauds Congress for acting to prevent the threatened rail strike and appreciates the Administration’s support of this legislation. The threat of a rail strike is already impacting the rice industry. The reality of a rail strike would have serious and detrimental immediate and long-term effects. We respectfully urge the Senate to now act as quickly as possible to enact the bill to eliminate any further disruptions and ensure this crucial piece of our supply chain remains intact.
In This Issue:
This week, USRPA was represented at the USAEDC 2022 Annual Workshop in Baltimore, MD by USRPA Office and Technology Manager, Iris Figueroa. The three-day workshop focused on election analysis, marketing trends, successes with export development programs, and sustainability. The effects of current events in the world market, compliance updates, and issues facing specific sectors of the agriculture industry were among the additional topics discussed. Members also got an opportunity to meet with their FAS marketing specialist during lunch as well as network with a variety of agriculture industry members. USAEDC is looking forward to next year celebrating its 40th Anniversary.
USRPA Joins Agricultural Transportation Working Group Letter
The US Rice Producers Association joined more than 190 other members of the Agricultural Transportation Working Group in sending a letter to Congress urging them to take action to prevent a potential rail strike that would lead to devastating consequences. At the time of the letter, which was sent on November 3, the deadline for the rail “cooling off” period had been set to November 14, 2022. Recently, that deadline was extended. The letter emphasized the urgency at which Congress should be prepared to act, as well as underlined the national security implications a strike could impose.
Read the full letter here.
USDA Announces Additional Emergency Relief and Pandemic Assistance
Secretary Perdue announced plans for additional emergency relief and pandemic assistance from USDA. The Emergency Relief Program (ERP) Phase Two will assist eligible agricultural producers who suffered eligible crop losses, measured through decreases in revenue, due to wildfires, hurricanes, floods, derechos, excessive heat, winter storms, freeze (including a polar vortex), smoke exposure, excessive moisture and qualifying droughts occurring in calendar years 2020 and 2021. The Pandemic Assistance Revenue Program (PARP) will help producers that experienced revenue decreases in 2020, compared to 2019 or 2018, due to the COVID-19 pandemic.
More information can be found here.’
Senate Ag Working to Move Ag Nominees
The Senate Agriculture Committee is pushing to confirm several agriculture nominees before the end of the year. Those awaiting confirmation include Alexis Taylor for USDA undersecretary for trade and foreign agricultural affairs, Jose Esteban for undersecretary for food safety, and Doug McKalip for chief agricultural negotiator at USTR.
Several members have voiced concerns about the nominees. Sen. Cory Booker (D-CO) is concerned with Esteban’s answers about which foods can be labeled as “humanely raised.” Sen. Bob Menendez (D-NJ) has been holding up McKalip’s nomination over concerns about transparency within USTR. Additionally, Sens. Bill Hagerty (R-TN) and Dan Sullivan (R-AK) have raised concerns with other USDA programs. Sen. Hagerty wants to avoid new oversight and regulations of the walking horse industry and Sen. Sullivan is concerned about new logging restrictions in the Tongass.
Farm Workforce Modernization Act
There is renewed interest in moving the Farm Workforce Modernization Act in the Senate. Rep. Dan Newhouse (R-WA), an original cosponsor of the legislation in the House, continues to urge Senate leaders to move the legislation in the last few weeks of the 117th Congress.
Senate Agriculture Committee Chairwoman Debbie Stabenow recently expressed support for the bill: “I would love to see that pass. I really feel like this is an opportunity, with the House having passed a bill, the president will sign it. I’ve been telling all the agriculture groups that this really is a moment to get something done, but they’re going to have to lean in very heavily to make that happen.”
| Reports on the market this week are much like last week. The business remains steady at the domestic level, and many are wondering how long it can keep up. Now that harvest is complete, paddy in first-hand is plentiful. There is a market for cash rice, but with slow exports and Haiti off the table, those offers will last only as long as the domestic market stays strong. The USDA ERS Rice Outlook was published this week, with the “highlight” being that the export forecast was lowered by 4 million cwt. This comes as no surprise to anyone in the industry, but it still feels like a bit of a blow to see it so bleakly scrolled across the page. On the supply side, production was lowered 1.1 million cwt to 164.3 million and imports were raised 1 million cwt to a record 45 million. On the use side, exports were lowered 4 million cwt to 71 million, while the domestic and residual use forecast was raised 1 million cwt to 142 million. These revisions netted out to an increase of 2.9 million cwt in the ending stocks forecast, up to 36.1 million cwt. Turning now to the ERS report on the global outlook, production was lowered 1.35 million tons to 503.7 million tons, 2% down from last year. This was a result of Nigeria, Pakistan, and Sri Lanka having a lighter production than a year before. The global consumption and residual use forecast are down 2.1 million tons from last year's record. Global ending stocks were lowered 2.2 million tons to 169.0 million. In Asia, prices bumped a little this week, but are still within the band prices have been trading for the past several weeks; $415-$425pmt. Viet Prices softened just a bit down to $430pmt, while India graduated from $385pmt up to $390pmt. This is the first time Indian prices have exceeded the $385pmt price threshold, and our best guess would be currency fluctuations and the strength of the dollar. That is largely what is responsible for the appreciating price in Thailand in recent weeks. Prices out of the United States remain far higher than the competition, but the domestic business is pulling more than its weight, and keeping cash offers afloat. We expect this to be the case through the holiday season and will turn a new chapter in the rice market upon entering the new year. |
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In This Issue:
RMTC 2023 will host its convention at the beautiful Hard Rock Hotel Vallarta, Puerto Vallarta, Mexico, from May 30 - June 1, 2023, an all-inclusive beach resort that is located 20 minutes from the excitement of Puerto Vallarta. With a gorgeous beachfront setting, the Hard Rock Hotel Vallarta is the essence of all-inclusive coastal luxury and tranquility.
Rice Market & Technology Convention will bring members together from throughout the rice industry in order to help better farming practices, to increase rice consumption, and to promote the overall rice trade in the Western Hemisphere. The convention meets this goal by providing cutting-edge technology to the grower and miller while offering the importer/exporter pertinent, up-to-date information concerning the market.
Registration and Sponsor & Exhibitor Opportunities will be available soon!
2022 Midterm Election analysis created by Cornerstone.
DISCLAIMER FROM CORNERSTONE
"Cornerstone Government Affairs assembled the following report to help clients interpret the implications of the 2022 midterm elections. As you know, this has been an extremely uncertain — and unusual — election cycle. At the time of publication, neither chamber has been called by the Associated Press, and many races remain up for grabs. We are aware that some information in this report may quickly become dated, and we will update this document periodically.
We write with the assumption that Republicans are likely to win a majority in the House of Representatives. Because we may not know who controls the Senate until after the Georgia runoff on Dec. 6, we offer insights into both a Democratic-controlled and Republican-controlled Senate. We look forward to discussing these results with you in detail as the landscape becomes clearer in the days and weeks ahead.
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