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In This Issue:
- Market Update: Historic Flooding in Brazil; Major Market Impact Expected
- Washington, D.C. Update: USRPA Testifies at International Trade Commission Hearing This Week
- USRPA Meets with Trade in El Salvador & Guatemala
- Casino Night at RMTC
- Over 150 Companies Registered for RMTC
- Photo from Rice Country
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Market Update: Historic Flooding in Brazil; Major Market Impact Expected | |
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Last week we mentioned the optimistic market signals of firm pricing, strong plantings, and consistent demand. This week, we’ll look at some of the factors that elevate the risk and could be potential speed bumps. First is the geopolitical risk of Haiti and Iraq, two of the top-milled rice markets for the U.S. Haiti has remained surprisingly consistent in recent weeks despite its political upheaval and increased gang activities. There is concern that shipments could slow or stop completely if things get worse and rice cannot get discharged from the port or distributed in-country upon its arrival. The second is Iraq, where they are willing to fill their MOU with the U.S., but because of fraudulent activities and terror ties to Iran from the bank utilized to purchase rice from the U.S., the Fed has frozen transactions. There is a workout plan being developed, but it cannot come soon enough to see more milled rice exports hit the books. Of course, a myriad of other issues could crop up, but these are the two primary risk factors that could slow the positive momentum the long grain market is seeing right now.
In South America, flooding in the key rice-producing state of Rio Grande do Sul, Brazil is making headlines where nearly 20% of the rice crop is still in the field. In some areas, the damage is more concentrated than in others. In the worst zones there has been loss of life and numerous people unaccounted for as reports indicate this is the worst flooding in recorded history. And it keeps raining, some sources in Brazil feel the remaining harvest will be abandoned causing already uncertain market conditions that will alter the dynamics of the Western Hemisphere rice trade.
Reports from Paraguay, Uruguay, and Argentina have not been stellar upon completion of their harvests, and with a shaky finish in Brazil, it’s become clear that the U.S. will remain the dominant origin and exporter in the Western Hemisphere for the coming year. U.S. long grain prices remain at $800 pmt, while Uruguay is at $750 pmt, Brazil at $735 pmt, and Argentina at $670 pmt. It has been normal for prices to soften on the South American harvest each year simply because of increased supply; however, that might not be the case this year, and any potential softening will come from the geopolitical risk on the demand side of the equation.
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These pictures taken near the town of Santa Maria, Rio Grande do Sul, Brazil give a good idea of the destruction caused by historic flooding this week. Thousands of people have been evacuated and displaced with severe damage to homes and property. Floodwaters have caused bridge collapses and major highway closures and the southern portion of the state is under a Red Alert. Power, telecom, and utility outages are common as the weather is worsening and continued disruptions are expected. | |
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In Asia, the market remains firm on huge Indonesian and Philippine demand. Prices are getting close to the $600 pmt mark for both Vietnam and Thailand again as other customers like Iraq, the EU, China, and South Africa continue buying patterns that are keeping their foot on the pedal.
On the ground, it’s almost impossible to originate rice firsthand, particularly in Texas, Mississippi, or Missouri. Liquidity is sparse in Arkansas and Louisiana as well. It does appear several farm bins still have rice — particularly medium grain — but it is assumed that this rice has already been contracted, just not moved and milled. Indicative prices where rice might even be available show Texas at $19/cwt, Louisiana at $18.52/cwt, while Mississippi, Arkansas, and Missouri are at $16.00/$18.75/cwt.
The most recent USDA Crop Progress report shows planted/emerged acres being Arkansas at 83/54, California at 15/0, Louisiana at 92/82, Mississippi at 45/25, Missouri at 68/24, and Texas at 86/72. Overall, the industry is 72% planted compared to a 5-year average of 46% and 48% emerged compared to a 5-year average of 28%. Historically, early plantings correlate to higher yields; let us just hope that translates to milling qualities as well.
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USRPA Testifies at U.S. International Trade Commission Hearing
On Tuesday, USRPA board member and immediate past chairman Alex Clark testified at the U.S. International Trade Commission (USITC) hearing for its investigation "Rice: Global Competitiveness and Impacts on Trade and the U.S. Industry." In February, U.S. House Ways and Means Committee Chairman Jason Smith requested that the USITC conduct an investigation regarding the global competitiveness of U.S. rice, following up on a previous investigation from 2015.
During the hearing on Tuesday, Clark gave the Commission insight into the U.S. rough rice market and noted the unfair trade practices in other countries that harm the U.S. producer.
"When countries like China and India produce rice in these quantities, and then manipulate their government policies, domestic markets, import, and export policies it not only forecloses market opportunities for U.S. rice exports, but also can cause disruptions in global markets. The impacts of these policies can threaten our market position in our traditional Western Hemisphere markets and drive down prices paid to U.S. farmers at the farm gate," he said.
Read Clark's full submitted testimony here.
House and Senate Agriculture Committees Release Information on Farm Bill Proposals
This Wednesday, both House Agriculture Chairman Glenn “GT” Thompson (R-PA) and Senate Agriculture Chairwoman Debbie Stabenow (D-MI) released background information on their respective farm bill proposals. Chairman Thompson released a title-by-title overview of his proposal. This proposal would increase support for producers by improving ARC and PLC as well as allowing for base acre updates within the two programs. It would also convert the Inflation Reduction Act’s funding into a farm bill baseline to increase funding for conservation programs. The proposal would also increase funding for MAP and FMD. He also announced that the House Agriculture Committee would markup a bill on May 23. He is expected to release more in-depth information on the proposals’ contents in the coming weeks. In the Senate, Chairwoman Stabenow unveiled the Rural Prosperity and Food Security Act. She released an overall summary, a section-by-section breakdown, and summaries for each title but did not release bill text. For rice, her proposal would increase the reference price by 5%. It includes $200 million for MAP and $34.5 million for FMD. More information on Chairman Thompson’s proposal can be found here and on Chairwoman Stabenow’s proposal can be found here.
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USRPA Meets with Trade in El Salvador & Guatemala | |
Last week, USRPA traveled to El Salvador and Guatemala for trade meetings and to see USRPA promotions in action. The trip began in San Salvador and included meetings with local millers and tours of facilities. The group then flew to Guatemala City, where they met with FAS staff at the U.S. Embassy, toured various sized markets and grocery stores, and saw two promotional activities in action.
The two promotional activities included a visit to a local public school, where 60+ parents were taking a class on rice cooking methods. Then, the group headed to lunch at the Guatemalan Ministry of Agriculture, where USRPA and ARROZGUA were hosting a Big Pot event for Ministry staff. Nearly 500 staff members were served that day, and staff had the opportunity to meet with the Guatemalan Minister of Agriculture, Maynor Estrada.
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USRPA COO Mollie Buckler and USRPA Board Member Mark Pousson in Acajutla, El Salvador's port city. | |
A full house for the rice class at the local public school. | |
Staff had the chance to serve the rice and beans at the end of the class. | |
A photo op at the Big Pot event with Minister of Agriculture Maynor Estrada, Ministry staff, and local millers. | |
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Experience a New Twist on our Opening Reception at Casino Night at RMTC!
Indulge in an evening brimming with excitement, elegance, and entertainment. Partake in thrilling games, savor delightful appetizers, and enjoy great company. Whether you're a gaming pro or seeking a fun night out, this event guarantees a memorable time.
Dress to impress, bring your lucky charm, and prepare to test your luck at Casino Night at RMTC, proudly sponsored by Anysort!
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Over 150 Companies Registered for RMTC | |
We are very excited to see so many companies come together. Thank you to all the companies that have registered and we can't wait to see you in Cancun!
There is still time to register! Don't miss out!
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Food & Agriculture
Regulatory & Policy Roundup
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World Agricultural Production
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Grain: World Markets and Trade | | |
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June 4 - 6, 2024
Rice Market & Technology Convention
Cancun, Mexico
Registration
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June 25, 2024
Eagle Lake Field Day
More Details to Come
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June 25, 2024
H. Rouse Caffey Rice Research Station Annual Field Day
Rayne, LA
More Information
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July 11, 2024
Beaumont Field Day
More Details to Come
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August 20, 2024
Missouri Rice Research & Merchandising Council Annual Field Day
Glennonville, Missouri
More Details to Come
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USRPA does not discriminate in its programs on the basis of race, color, national origin, gender identity, sexual orientation, religion, age, disability, political beliefs, or marital/family status. Persons who require alternative means for communication of information (such as Braille, large print, sign language interpreter or translation) should contact USRPA at 713-974-7423. |
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