Great future for rice industry of the Americas
Jul 2, 2007 3:07 PM,
By Milo Hamilton
Firstgrain, Inc.
A smaller than usual crowd gathered for the U.S. Rice Millers meeting in the Bahamas in June. It was very different from the Cancun Rice Congress of the Americas 2007 meeting in May.
Most of the people in the Bahamas were U.S. rice millers and their allied industry support. There were brokers and input suppliers to U.S. rice processing. That in no way surprises me; I have attended many RMA meetings over the years.
I am a bit surprised that there were not more buyers of U.S. rice at the meeting. Most were international traders, not the buying countries themselves.
I hope that some day I will master Spanish and that the U.S. industry will see itself as part of the rice industry of the Americas, which in fact it is. Perhaps someday there will be one Americas Rice Millers Conference. Who knows? It could happen.
Someday, not too distant, I see the CBOT rice futures contract as a major rice trading hub not just for the Mississippi River but for the entire Americas, north and south. This would mean more liquidity and access for customers of U.S. rice outside the United States.
This coming year most of the long grain rice grown in the United States will be fed to the domestic U.S. market, Iraq and Latin American countries. I see rice continuing to trickle or even flow a bit into the EU and the Philippines, but other than that, the United States does not have the rice to ship to other points because the crop is very short.
There is no country on this planet that will not import U.S. long grain because of GMO. All countries are again buying U.S. rice. Do not let anyone tell you otherwise. Anyone who tries to play the GMO card on a seller should be countered with, “You mean GMC as in Get Me Cheaper?”
I used to tell people if they want to understand the world market, take a trip to Asia. Now I would tell the Asians that if they want to find a place to buy larger amounts of additional rice at a much higher price, they need to come to the Americas.
Another 30 percent increase in world rice prices, which now seems inevitable, and the Americas will become an important shipping point to all world markets. That forecast hinges on a reasonable price for wheat and corn, of course.
At least that is what a friend of mine in Uruguay told me in Cancun. I have no reason to doubt him. He is an expert in that area of the world and has been trading for many years.
The Western World is waiting for the rise of the Asian rice price. Could rice be the next “soybean” of the Americas? Good question, but I do not have the answer.
The United States is not an island unto itself. It is part of the mainland known as the Americas. The United States is just a part of the Western Hemisphere. You can drive from Hudson Bay to the tip of Chile, just as you will soon be able to take a train from Beijing to any coast in Asia or Europe.
I love Neil Diamond’s song lyrics, “Coming to America,” but it should have been “Coming to the Americas!” The rice industry of the Americas has a great future. There is more money out there to buy rice than we can imagine.
Our rice future is not dismal. It is very bright if we do it right. We need to teach others rice futures and we need to learn to speak and read Spanish.
We need to start saying “Americas,” not just “America,” to survive as a U.S. industry.
e-mail: milo@firstgrain.com
