Milled Rice Sale To Iraq A Breath Of Fresh Air
US RICE PRODUCERS
KATY, TEXAS
What a week it has been for America, the world, and even us here in the rice industry. Political commentary aside, big news out of Iraq this week buoyed a sinking optimism beginning to pervade the industry. Last week we spoke of the complications of dollar-denominated trade with Iraq and how important that market is to the United States. This week we received word of another 44,000 metric tons of milled rice sold to Iraq to be shipped in January 2025. In the face of cheap Indian exports and fierce competition from Thailand, Vietnam, and Pakistan, this sale could not have come at a better time. The risk has been – and frankly continues to be that U.S. long grain gets sucked into the Indian vortex of rice supplies. Fortunately, the United States has enough “strings attached” to Iraq to ensure they make good on their MOU even when they can find cheaper rice elsewhere. We don’t have that luxury in other markets, and will likely have to deal with that in the balance of the year and the start of 2025.
Among several items that are now getting shuffled in the ever-changing political landscape of Washington, the passage of a new Farm Bill before Trump’s inauguration is gaining steam and looking like it could happen. The bill is largely written and agreed upon in spirit by the powers that be; we just now need to force the issue. Having a modernized farm bill will be extremely important to US Rice Producers as we have to go head-to-head in the international markets against origins that unfairly subsidize their rice production. More on this to come, but we hope to have something to report before Christmas here.
On the ground right now, California is done with harvest and struggling to find a cash market at $11/cwt over loan, a price that is significantly below the cost of production. The field yields on the West Coast largely recovered, but the real story will be how the low-head rice will impact milling yields. In Texas, the second crop is well underway, and prices are quite varied for what’s available to sell, with reports as low as $15/cwt up to $16/cwt. Louisiana is hovering right at $15.50/cwt for cash rice, and Mississippi, Arkansas, and Missouri are all in the $14.75-$15.25 range. It is important to note that the draft level of the Mississippi River is limiting barge loads, so more rain is welcome to unclog the supply chain.
Trade in the Western Hemisphere has been consistent without any extreme shocks to supply, demand, or expectations. Argentina, which is planting now, is expected to have a larger production because of sustained good pricing. Total acreage could decrease though if there’s a dry cycle. Fortunately, our paddy shipments to Mexico have been consistent and a bright spot in the marketing cycle. Planting progress in general in the Mercosur countries continues and will certainly play a factor in prices beginning in early 2025.
Theweekly USDA Export Sales reportshows net sales of 71,800 MT this week, up noticeably from the previous week and up 8% from the prior 4-week average. Exports of 62,600 MT were down 31% from the previous week and 7% from the prior 4-week average. ∆
US RICE PRODUCERS