Volume 18, Issue 39

October 8, 2021

Harvest in Arkansas has progressed smoothly up to this week, but rains have slowed things down a bit. Optimism remains in a return to normal, where field yields are good to excellent, and milling yields are average to down. Harvest is moving forward in Mississippi, with estimates as high as 70% complete at this point. The rice supply chain is approaching a difficult season; the damage done to the ports on account of the Hurricanes, coupled with the inefficiencies resulting from Covid means that despite a smooth harvest, shipping product will me more difficult than in years past. The port problems are not isolated, but the Mississippi River and port systems have set the US apart as a reliable supplier; this will be one of the most significant long-term challenges the entire transport system will face. Labor shortage, the availability of fertilizer for 2022 (urea) and price increases of inputs in general have some farmers rethinking next year’s planting intentions. As one veteran rice trader in Mercosur mentioned this week, “this market has a new set of rules and everyone is trying to adapt.”

Prices on the ground in Texas have prices at about $14.58/cwt over loan, and harvest has been all but complete for close to two weeks there. In Louisiana, bids are appx $13.58/cwt and harvest is complete. In California, harvest is rounding the corner to beyond 50% harvested. The market is strong in the west, with paddy prices trading with liquidity at $22/cwt over loan. Much like Arkansas, initial yield reports are above average, and milling yields are below average, albeit better than last year. However, it’s still too early to provide definitive results.

In Asia, prices are sideways, with a slight firming in Vietnam to the tune of $5 pmt up to $435 pmt. The thought for the slight increase is because on account of tight supply in first hands because the government buys rice from farmers for reserve, leading to higher domestic prices. Great news moving forward though, is that the Vietnamese government lifted the pandemic shutdown as of Oct. 1. This is a great first step in clearing up the log jam in Vietnam. India, however, continues to export at record pace with prices between $350-355 pmt.

A recent GAIN report on China reveals that rice production for MY 2021/22 is forecast at 150 MMT, and consumption to be 155.7 MMT. Consumption is 2.3 MMT higher than estimates, and can be accounted for because of increased feed demand. Reports would indicate that over 10 MMT of feed stock was sold between $200-$230 pmt to four Chinese State Owned Enterprises from Aug 2020-Mar 2021. Official rice imports increased to 3.6 MMT, but unaccounted cross-border trade certainly increases that number. The US industry is still fighting for enforcement of the Phase 1 trade deals, where a market to China would be key to the US rice industry.

The most recent USDA Export Sales report shows net sales of 73,400 MT, down only 2% from last week, but up 73% from the prior four week average. Large shipments to Mexico and Honduras accounted for the majority. Exports of 61,700 MT registered an increase of 13% over last week and 32% over the four week average. Again, Mexico took the majority of exports.

In the futures market, the strength of the dollar may be pressing futures down a bit. Earlier this week, the dollar closed above key resistance, and dropped Nov rice futures a combined $0.28/cwt. Barge rate increases, fresh supply, and now possibly a strong dollar is combining to put pressure on futures. Average daily volume increased 21% up to 780, and Open Interest largely unchanged at 9,067.

On Thursday, the Senate passed a Continuing Resolution on a vote of 65-35. The continuing resolution will maintain spending at current levels while allowing Congress until Dec 3 to work out an agreement on a broader spending package or enact another Continuing Resolution. An earlier attempt to pass a Continuing Resolution failed because it included a provision that would waive the debt limit. The bill also includes $10 billion for agriculture producer assistance for 2020 and 2021 losses. Senate approval sends the Continuing Resolution to the House where it is expected to be expeditiously passed and sent to the President for approval to avoid a government shutdown at midnight.

The U.S. Department of Agriculture announced the names of individuals who will hold key staff positions in Washington, D.C. They include the following:

Linda Delgado was appointed Senior Advisor in the Office of the Secretary. Delgado most recently served as the Director of Government Affairs at Oxfam America. She has extensive experience in environmental, agricultural, and forestry issues from her time as a Fellow at Ecotrust, a Senior Fellow at the World Resources Institute, and the Co-Director of the Forest Program and Global Forest Watch. Delgado is returning to USDA, having previously served as the Chief of Staff to the Deputy Secretary and a Senior Advisor to the Secretary from 1998 to 2001. She was a legislative assistant in several Congressional offices prior to her time at USDA. She has a Master of Business Administration in International Relations from American University and degrees in International Finance and Psychology from Tufts University.

Marni Karlin was appointed as Senior Advisor for Organic and Emerging Markets. Karlin joins USDA with two decades of experience in policy and the organic and emerging agricultural markets space – including consulting with stakeholders across the organic sector from producers to certifiers, service as Vice President of Government Affairs and General Counsel of the Organic Trade Association, and serving as the founding Executive Director of the Controlled Environment Agriculture Food Safety Coalition. Karlin has several years of government experience, including time as Counsel to Senator Herb Kohl and Counsel for the Antitrust Modernization Commission. She received her Juris Doctor from the University of Chicago Law School and her Bachelor of Arts in International Economics and Politics from George Washington University. Karlin also has a certification in global organic leadership from the International Federation of Organic Agriculture Movements (IFOAM) Organic Leadership Academy.

Marcia Moore will serve as Director of the Office of the Executive Secretariat. Most recently, Moore served as the Chief of Personnel and Administration and a Committee Management Senior Analyst at the Department of Defense. With more than 23 years of federal service, Moore returns to USDA where she previously managed the Agricultural Research Service’s Office of Scientific Quality Review, USDA’s Committee Management Program, and environmental policy analysis. She also worked as the Executive Director of the Food Advisory Committee at the Department of Health and Human Services. Moore has her Bachelor’s in Business Management and Biology from Alverno College in Milwaukee, WI, and her Master’s in Science Communication from Johns Hopkins University.

Shawn Campbell was appointed Legislative Analyst in the Office of Congressional Relations. Campbell joins USDA after over five years of service in the legislative branch. Most recently, he served as a Special Assistant in the Office of Senator Michael Bennet of Colorado. Prior, Campbell worked for Senator Richard Blumenthal of Connecticut as a Legislative Correspondent, Correspondence Assistant and Staff Assistant. Campbell graduated from the University of Massachusetts Amherst with a Bachelor of Arts in Political Science and a minor in African American Studies. He is a native of Hartford, Connecticut.

The 84th International Rice Festival: The rice festival will return to Crowley, Louisiana, after being canceled last year due to the COVID-19 pandemic.

Mar. 4, 2022

34th Annual Arkansas Agricultural Hall of Fame Induction Luncheon: Embassy Suites, Little Rock, Arkansas – event details and tickets (RESCHEDULED)