US RICE PRODUCERS

KATY, TEXAS

With the port strike, India’s release of the export ban, and most of the harvest behind us, we can take a breath and survey the market environment for the coming year. First, it’s important to note the spread between U.S. milled rice, Indian rice, and Thai/Viet rice. U.S. long grain has remained at $800 pmt for several weeks even after the release of the Indian export ban, a great sign for the resilience of the U.S. crop. India is the floor at $490 pmt, Vietnam at $540 pmt, and Thailand at $530 pmt. Noting the spread here is important because Iraq has the choice to procure rice from multiple places, and its primary choice has been Thailand. The spread between U.S. long grain and Thai is $270 pmt, making U.S. long grain 150% more expensive. Iraq is a key driver for U.S. long grain and having cheap Indian rice forces Thai and Viet to drop their prices, thereby reducing demand for our U.S. crop. We have been talking about this for months, but it is finally here, and India’s price distortion is a real factor.

While chasing Iraqi business is a challenge in itself, Haiti’s political problems continue to outweigh the humanitarian efforts to feed its people. The mainstream media has done a decent job of covering the gang violence and crisis it has created, but one of the best investigative reports to come out of Haiti in a long time is by Dylan Roberts with FRONTSIGHT Media. You can view some of the work by clickinghere. This report does an excellent job outlining the multi-faceted problems and the depth of dysfunction that the Haitian government is working to overcome.

To wrap up the market environment succinctly, it would be safe to say that the milled export business is an uphill battle, domestic business is steady, and paddy exports are strong. This is all subject to change and may very well have a net neutral impact on cash and future prices; it will take more time to see how these different segments will impact return to grower. Milling yields will be a challenge once again as one Arkansas merchant expressed, “This is a low 50s harvest.” But the most recent World Market Price for long grain as of 10/9 is $13.72/cwt.

TheWASDEreleased last week says that the outlook for 2024/25 U.S. rice this month is for slightly larger supplies, unchanged domestic use and exports, and slightly higher ending stocks. Supplies are raised on higher production as imports are unchanged. The NASS October Crop Production report raised 2024/25 production by 0.1 million cwt to 219.8 million, all on a higher yield. The average all-rice yield is forecast at 7,590 pounds per acre, up 2 pounds from last month. Long-grain production is forecast at 166.8 million cwt and combined medium and short-grain production at 53.0 million. Projected 2024/25 all rice ending stocks are raised by 0.1 million cwt to 45.7 million, up 16 percent from last year. The 2024/25 all-rice season-average farm price is unchanged at $15.60 per cwt.

On the ground, cash prices haven’t made any significant moves in the last two months. Texas is at $15.25/$15.75, Louisiana is at $15.50, while Mississippi, Arkansas, and Missouri are all at $14.75/$15.25. This goes to show that we are a bit more insulated from what’s happening in India, but by no means impervious to its effects.∆

US RICE PRODUCERS