In This Issue:
President Joe Biden released his full budget request for fiscal 2022 which includes details on plans to ramp up spending at the Agriculture Department for climate research and agricultural adaptation. Under the current law, the 2022 request for discretionary budget authority to fund programs and operating expenses is $29.9 billion, almost 9 percent increase or $2.6 billion above the 2021 enacted level. Of the $2.6 billion increase, 54 percent, or $1.4 billion, are program increases and 46 percent, or $1.2 billion, is an elimination of the Women, Infants, and Children (WIC) rescission. This request also includes funding for Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Rural Development, Forest Service, food safety, research, and conservation programs.
The overall budget includes both the Administration's annual spending requests for departments and agencies as well as the sweeping, longer-term proposals under his American Jobs Plan and American Families Plan to address climate change, build roads and other infrastructure and reduce economic inequality. The $29.9 billion in budget authority that Biden is requesting for FY22 at USDA includes $914 million earmarked for climate research and resilience programs as well as clean energy. The administration proposes no cuts in farm programs, including the crop insurance program, and is requesting funding to support an estimated $10.4 billion for farm loans to an estimated 52,000 farmers, Funding for mandatory programs is estimated to be $168.1 billion, a $20 billion decrease from 2021 enacted levels.
USDA's $29.9 billion budget request, which would be a 9% increase over fiscal 2021, is for discretionary spending programs that are subject to annual appropriations by Congress. USDA’s total estimated budget for FY22 is $198 billion, which includes the cost of farm programs, nutrition assistance and other mandatory spending programs where the cost is set by law or depends on program eligibility. Compared to FY 2021, this amount represents a decrease of almost $17.4 billion. The budget assumes a pay cost increase of 2.7 percent and includes an increase of $200 million across the Department to cover the pay and benefit increases. and the budget would fully fund USDA's network of county offices.
The 2022 fiscal year starts Oct. 1.
Of note, there is no mention in the budget of using the Commodity Credit Corp. for climate-related spending, such as a carbon bank. Total CCC spending for FY22 is estimated at $10.3 billion, far below the CCC $30 billion in spending authority. Proposals to use the CCC to support carbon markets has run into intense Republican opposition.
Climate-related spending increases in the budget include funding such as:
The Natural Resources Conservation Service's budget for conservation technical assistance would increase by $43 million to $774 million to support the administration's emphasis on helping producers implement climate-friendly farming practices.
Funding for USDA’s climate hubs, multi-agency regional centers that provide advice and analysis on climate adaptation, would increase by $3 million to $23 million in FY22.
The Agricultural Research Service’s budget authority would increase from $1.6 billion to $1.9 billion in FY22, with increases of $99 million for clean energy and $92 million for climate science.
The National Institute of Food and Agriculture, which funds extramural research at land-grant universities and other institutions, would see its budget authority increase from $1.8 billion to $2.2 billion. Some $91 million would be earmarked for climate research.
The Economic Research Service’s budget would increase from $85 million to $91 million in FY22, allowing for a $4 million increase in climate research.
To review the USDA budget proposal here.
Just over one month away, the Rice Market & Technology Convention continues to gain participation as the U.S.'s vaccination rollout moves forward. President Biden announced this week the administration's goal to at least partially vaccinate 70% of U.S. adults by July 4th.
As the world continues to open, the rice world is ready to meet in person and talk about the market at the luxurious Woodlands Resort in Texas, this July 6-8th. Its obvious rice farmers, mills, allied industries, importers, exporters, and an assortment of officials connected to the rice market are anxious to discuss the issues and network with the entire rice trade community. Make your plans, go to www.RiceMTConvention.com in order to register.
The RMTC will comply with CDC, state, city, and hotel regulations concerning COVID-19. Remember to book your rooms ASAP as the initial hotel room block was filled and has been expanded in order to accommodate additional participants.
Join the growing list of companies already registered!
In This Issue:
Rice planting in the U.S. is coming to an end as most states are now passing the finish line. In California, rice emerged is about 5% ahead of last year whereas the other states are slightly behind. Only about one-third of the crop is considered to be in poor condition, but with it being so early in the growing season, that statistic doesn’t yet hold much merit at this point in time.
World market prices are showing small signs of softening, according to the USDA which recently reported world market prices (rough rice) to only be down 2% in the last 3 months. Last year at this time, world market prices were at a similar level, however, they had made a 15% run in the 3-months leading up to the middle of May.
We are on the bridge between old crop and new crop. The June 29th actual planting report is much anticipated as it will indicate how many acres shifted over into corn and soybeans. Then the next WASDE report is due out on July 12th and will set the tone and real indications for new crop pricing.
With prices dropping in Brazil those suppliers should become more competitive and closer to the U.S. if not lower. Much depends on the freight market and foreign exchange. Some analysts see 200,000 tons of paddy exports and much more milled rice as well. The government agency CONAB is saying yields in the largest state of Rio Grande do Sul reached 8,500 lbs per acre.
Brazil must export to avoid additional price reduction. Currently business is slow and vessel freights are very high including for containers. We understand the Brazilian grain quality is excellent.
After a several-month bull run in freight markets, which was extra aggressive in April and May, the Dry Bulk Index showed its first sign of letting up. The recent retreat in shipping prices is attributed to China’s claim to police the industry and reduce hoarding and market manipulation. Of course, most analysts expect this small slide in prices to be quickly reversed as the shortage of ships and containers is clearly an ongoing obstacle.
An inflating US Dollar coupled with excessive shipping and logistics costs continues to have a significant impact on grain trade worldwide. If those economic factors weren’t enough, the relentless COVID outbreaks which seem to pop right when another starts to get reeled-in is working only to muddy the “market water” even more. If these components can’t stabilize in the near future, the global commodity markets may be in for a relatively volatile year.
The Futures market is already supporting volatile expectations as rough rice prices eroded further. Declining prices, and rising volume, and open interest normally point to a weak market. In this sense, the futures market actually reflects what is being seen on the ground, where buy interest is weak at best which is only working to demotivate sellers from engaging the market. The reduced output in 2021 may work to reverse the current sentiment, but with the crop having just been planted, that may take a little while.
Begining in 2020 USRPA and ARROZGUA have had to find new and innovative ways to teach Guatemala's population how to prepare delicious and diverse dishes using U.S. rice.
USA Arroz's Digital Campaign started in April 2020 with 340 followers on its Facebook fan page and has since increased 789%! The page currently has over 5,000 followers, surpassing the fan page followers of renowned chefs and influencers.
Supermarkets have reported an increase of 18% in rice sales in the last 8 months, and that trend continues to increase as just last month, local supermarket chains in Guatemala reported a sales increase of 23% in comparison to the previous year. Digital Campaign activities in Guatemala currently combine 3 broadcast channels: radio (RCN Radio Group), Television (TVQtv), and two digital platforms: ZOOM and Facebook Live, which are directly reaching a large and very diverse audience spanning several target groups.
The global rice industry has lost a dear friend, Yuanlong Ping, a Chinese scientist who developed higher-yield rice varieties that helped feed people around the world passed away at the age of 90 in China on May 22, 2021.
In honor of his great achievements and dedication to feeding communities suffering malnutrition and starvation worldwide, Dwight Roberts recalled at a meeting with him when he was visiting the U.S. rice states in early years, “Yuan Longping was a real rock star. Known as the Father of Hybrid Rice, he developed rice varieties that helped feed the world. When I met him 20 years ago I realized he was the 'Babe Ruth' of world food production, a real celebrity.”
Yuan spent his life researching rice and was a household name in China. Worldwide, a fifth of all rice now comes from the species created following Yuan’s breakthrough discoveries, according to the website of the World Food Prize, which he won in 2004.
On Saturday afternoon, large crowds honored the scientist by marching past the hospital in Hunan province where he died, local media reported, calling out phrases such as: “Grandpa Yuan, have a good journey!” USRPA offers the deepest condolence to him and his family. May he rest in peace and joy and generations of rice folks will follow his generous heritage and footsteps, his lifelong endeavor to benefit the welfare of the world.
Representing the 27th District of Texas, Congressman Mike Cloud paid a visit to Franz Farms near Inez, Texas this week to gain a better understanding of rice farming on the gulf coast. Despite heavy rains, the weather opened up enough to visit some rice fields and have a thorough discussion of the domestic and international issues that affect district farmers. Representative Cloud was particularly interested in the markets of Mexico and Central America, the most important for all long-grain farmers.
Galen Franz, Chairman of the Texas Rice Research Foundation, board member of the USRPA, the Texas Rice Council, the Texas Rice Producers Board, and the Texas Rice Legislative Group, graciously hosted the visit. Tommy Turner, President of the Texas Rice Council and member of the USRPA board, along with Thomas Wynn, Chairman of the USRPA and owner of Coastal Rice Futures and Coastal Warehouse also participated in the meeting.
These farmers expressed their concerns over the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), commonly known as TPP that creates deep concerns about the duty-free access to the Mexican market by Vietnamese rice after the phase-in process.
The CAFTA-DR agreement with Central America and the ability of the U.S. to maintain a strong presence was also discussed. And the Texas rice leadership informed Representative Cloud that it is no secret that rice is one of the world’s most manipulated crops as competitors’ governments use interventionalist policies that in many cases are NOT legal under WTO rules. Rep Cloud was especially interested in trade issues with Mexico as he was appointed a member of the US-Mexico Interparliamentary Group, a committee formed by congressional members of both countries that address issues of trade, security, and immigration.
In This Issue:
On Wednesday, May 19th, the U.S. Department of Agriculture announced the appointment of Meryl Harrell as Deputy Under Secretary for Natural Resources and Environment (NRE) and the appointment of Terry Cosby as Chief of the Natural Resources Conservation Service (NRCS). They will begin their positions on Monday, May 24.
Meryl Harrell most recently served as the Executive Director of the Southern Appalachian Wilderness Stewards. She has also served as a consultant, advising non-profits, foundations, and government agencies working to conserve America's public and private working lands. During the Obama-Biden Administration, Harrell spent eight years in the Office of Natural Resources and Environment at USDA, including serving as Chief of Staff and then Senior Advisor to the Under Secretary. Harrell previously worked on public lands issues at The Wilderness Society in Washington, D.C. Harrell is a graduate of the Yale Law School, where she studied environmental law. Harrell is originally from New Jersey and more recently based in Atlanta, Georgia.
Terry Cosby began his career with USDA in 1979 as a student trainee in Iowa. Cosby was raised on a cotton farm in Tallahatchie County, Mississippi. The farm, now in his family for three generations, was purchased by his great-grandfather in the late 1800s. Cosby has served over 42 years with the agency in numerous capacities, most recently, Acting Chief of NRCS and State Conservationist for Ohio. Prior to serving as Ohio State Conservationist, he served in leadership positions in Iowa as an Area Resource Conservationist, in Missouri as an Assistant State Conservationist for Field Operations and Idaho as a Deputy State Conservationist. Cosby holds a Bachelor of Science degree in Agriculture Education from Alcorn State University, the first Black land grant college established in the United States.
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