USA Rice Daily
Up-to-the-Minute News on Issues and Activities
Wednesday, August 19, 2015
Mexico Market Takes a Positive Turn
 
In-store demo draws a crowd 
MEXICO CITY, MEXICO - For the first time in four years the market share for U.S. rice in Mexico is on the upswing.  The United States is the sole supplier of paddy rice to Mexico and typically 40 percent of U.S. paddy exports are destined to this market. In 2010, 92 percent of the rice Mexico imported was paddy; by 2014, that number had fallen to 69 percent.  But in the first five months of this year, the trend has reversed and 75 percent of Mexico's imports were U.S. paddy rice.
 
Similarly, U.S. milled rice exports to Mexico have skyrocketed, increasing more than 100 percent in the first six months of this year compared with the first six months of 2014.  The U.S. market share for milled rice was 97 percent in 2010 and fell to a low of 35 percent in 2014.  In the first six months of 2015, the market share has rebounded to 62 percent, mostly due to the 20 percent duty imposed on rice imports from Vietnam and Thailand.
 
Notwithstanding the potential outcome of the Trans-Pacific Partnership negotiations, the outlook for U.S. sales remains positive, given the improved U.S. rice quality and narrowed price differences between U.S. and Asian origin rice.  The Trans Pacific Partnership deal could potentially lower tariffs into Mexico for rice from Asian origins which is all the more reason USA Rice continues its robust marketing activities that have helped change consumption habits and now are focusing on differentiating U.S. grown rice from other foreign rice.
 
"Over the past 15 years of USA Rice promotional activities, rice consumption has grown 43 percent while population has grown only 22 percent," says Jim Guinn.  "In just this year alone, USA Rice will conduct more than 300 promotional activities in Mexico targeting both the consumer and foodservice sectors." 
 
Guinn says activities focus on the newly developed "Authentic American Seal" which is used throughout all USA Rice promotional activities.  This logo highlights to the consumer what U.S. rice represents and which rice products on store shelves are from the United States.  USA Rice uses other messages as well that we know resonate strongly with Mexican consumers - health, versatility, economics, food safety, and gluten free.
 
Contact:  Sarah Moran (703) 236-1457

 
Friends and neighbors gather at USA Rice community seminars 
 
CCC Announces Prevailing World Market Prices 
WASHINGTON, DC ---The Department of Agriculture's Commodity Credit Corporation today announced the following prevailing world market prices of milled and rough rice, adjusted for U.S. milling yields and location, and the resulting marketing loan gain (MLG) and loan deficiency payment (LDP) rates applicable to the 2015 crop, which will become effective today at 7:00 a.m., Eastern Time (ET).  Rough rice prices increased $0.18 per cwt for long grain and $0.19 per cwt for medium/short grain.

 
World Price
MLG/LDP Rate
 
Milled Value ($/cwt)
Rough ($/cwt)
Rough ($/cwt)
Long Grain
14.89
9.40 
0.00
Medium/Short Grain
14.40
9.66 
0.00
Brokens
  8.98 
----
----

This week's prevailing world market prices and MLG/LDP rates are based on the following U.S. milling yields and the corresponding loan rates:

 
U.S. Milling Yields
Whole/Broken
(lbs/cwt)
Loan Rate
($/cwt)
Long Grain
55.01/13.46
6.50
Medium/Short Grain
61.81/8.43
6.50
 
The next program announcement is scheduled for August 26, 2015.    
CME Group/Closing Rough Rice Futures   
CME Group (Prelim):  Closing Rough Rice Futures for August 19

Month
Price
Net Change
September 2015$11.900
 + $0.060
November 2015$12.175
+ $0.060
January 2016$12.465
+ $0.055
March 2016$12.695
+ $0.055
May 2016$12.925
+ $0.055
July 2016
$12.925
+ $0.035
September 2016
$11.935
+ $0.015
In the News 
Around the Country
The drought is costing California about $2.7 billion this year, according to a new UC Davis study, although the statistics suggest the state's overall economy can withstand the impact. The economic losses are equivalent to about 5 percent of annual agricultural production, and about one-tenth of 1 percent of California's total annual economic output.
 
 
Science and Technology
Researchers at the Texas A&M AgriLife Research and Extension Center at Beaumont are studying what specifically affects rice plants under extreme environmental conditions. Knowing that, they believe, could lead to ways of helping plants thrive in the heat and other stressful conditions.
 
 
Farm Finance
If you are interested in the farm economy, August is a great time of the year as NASS produces several reports including: an analysis of farm production expenditures, a Land Values report, the Farm Computer Usage and Ownership report, and the results of the Tenure, Ownership, and Transition of Agricultural Land (TOTAL) survey, conducted as part of the Census of Agriculture program.
 
The Crop Insurance Boom Federal Reserve Bank of Richmond
Under the multiyear farm bill enacted in early 2014, crop insurance is expected to cost taxpayers $41 billion over five years - a jump of almost 20 percent over the previous farm bill, enacted in 2008. Crop-insurance advocates argue it is a far more efficient program to manage an array of risks than ex post disaster relief. Critics of crop insurance subsidies, however, point to the fact that the program is still a transfer from taxpayers to farmers and private insurance companies, and as constructed, it is more income support than classic insurance.
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Mission Statement
USA Rice  is the global advocate for all segments of the U.S. rice industry with a mission to promote and protect the interests of producers, millers, merchants and allied businesses.
About Us
Editor:  Michael Klein
(703) 236-1458
mklein@usarice.com

Fax (703) 236-2301

2101 Wilson Boulevard, Suite 610
Arlington, VA 22201

This report is time-sensitive, based on information available at press time. Content is derived from facts and sources believed to be reliable. Reprinting and/or distribution may be done with permission of  USA Rice.

Copyright © 2015. Please direct comments or questions to the editor or contact name listed for each story.