Planting Season Under Pressure
US RICE PRODUCERS
KATY, TEXAS
Fertilizer and fuel costs: Two of the many factors on our minds this week as we watch global events unfold at the start of rice planting season. The higher costs of planting rice compared to other crops have been well documented, and banks have had trouble making the budget work before the fertilizer and fuel shocks (hence the Farmer Bridge Assistance Program). Market risk and exposure increase daily for bankers and farmers alike with this new pricing matrix that has an indeterminate end date. Of course, rice is not alone, but that doesn’t make the pain any less acute. In light of this, we can expect U.S. rice farmers to produce a strong crop to help feed the world, even if that includes supplying nations such as Cuba and Iran, despite their status as current economic and wartime adversaries of the West. These countries will need significant help in the coming months in both infrastructure and food security, and the U.S. is positioned to provide that aid. It is perhaps premature to postulate on these matters, but those could be two large demand centers for U.S. long grain rice that currently don’t exist.
A recentGAIN report on Colombiaprovides a significant update on one of our most important trading partners. Colombia, which is expected to import 200,000 MT MRE this year, is projecting a smaller domestic production by over 5%. This bodes well for the U.S., as we have accounted for 62% of Colombia’s imports over the last six years, on average. The 2026 TRQ for U.S. rice under the CTPA is set at 146,304 metric tons, which could account for as much as 73% this year. Currency changes have made U.S. rice more favorable in recent months as well, which bodes well for continued business in the region. Colombia and all the supply/demand issues of the Western Hemisphere will be thoroughly discussed among the growing number of participants at the Rice Market & Technology Convention, organized and conducted by the US Rice Producers Association, May 26-28 in Cartagena, Colombia.Make your plans to attend.
In Asia, prices drifted a bit lower this week, but not in a material fashion. Thailand held steady right at $370 pmt, and Vietnam at $355. The slight drift came from India, with a drop from $350 pmt down to $340 pmt. India (along with other countries) has the potential to be hit by the fertilizer shortage. Early estimates project a maximum yield loss not to exceed 5% as a result, so the overall shock could be minimal there, but it still has the potential to limit their egregious oversupply.
Planting on the ground is well underway in Louisiana and Texas. Arkansas is rolling in some regions, as are a few operations in Missouri and Mississippi. We eagerly await the first Prospective Planting report on March 31, as are the long grain markets throughout Latin America, and an end to the speculation on acreage reduction from previous years. Tractors are scratching the ground in California, but there is a small storm expected to move through rice country early next week, which may slow things down a little bit.
Theweekly USDA Export Sales Reportshows net sales of 17,900 MT this week, down 84% from last week and 68% from the prior 4-week average. There was a significant reporting of Medium Grain sales last week. Exports of 24,200 MT were down 57% from the previous week and 42% from the prior 4-week average. The destinations were primarily to Haiti (7,100 MT), El Salvador (5,600 MT), Mexico (3,200 MT), Taiwan (2,000 MT), and Canada (1,900 MT). ∆
US RICE PRODUCERS