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U.S. Long-Grain Rice Faces Growing Challenges Overseas

U.S. Long-Grain Rice Faces Growing Challenges Overseas

The U.S. has consistently ranked among the top-5 rice exporters in the world. However, since hitting a record 3.98 million metric tons (mmt) in 2002, U.S. rice exports have shown a downward trend, reaching 2.98 mmt in the marketing year 2020/21. The decrease in US exports contrasts with a growing global rice market and results in a significant drop in the US share in global rice exports in the last two decades. The decrease in U.S. exports is exclusively a result of a drop in long-grain rice exports since exports of medium- and short-grain rice have shown a positive trend. Long-grain rice is the main type of rice produced in the Mid-South, accounting for over 91% of the volume of production. 

In the last 20 years, exports of long-grain rice to North America and the Caribbean, the two largest market destinations, have grown marginally (less than 1% a year), while those to Central America and the Middle East have decreased moderately (between 1 and 2% a year on average). Exports to Europe have not recovered since the GM-contamination case in the mid-2000s. Exports to Mexico, the largest market for US long-grain rice accounting for a quarter of total exports in the period 2018-2020, show almost no growth since the early 2000s, and more recently are in a downward trend as competition from other suppliers, primarily Mercosur, grow. Haiti remains a core and growing market for US rice, but one plagued with risks and uncertainty. Competition in Central America, primarily from Mercosur, is eroding the market share of US rice despite its preferential access under DR-CAFTA. 

Efforts are being made to improve the competitiveness of US rice, particularly when it comes to rice quality. The US was once regarded as the golden standard for long-grain rice quality, but many will argue that is a thing of the past. The blame goes far and wide as to why the quality of US long-grain rice has diminished, but what matters is that the industry is taking steps to address the issue. The US exports around half of its rice crop every year, so working on regaining competitiveness in the global market is of utmost importance.   

Removing Fertilizer Tariffs is Not a (Phosphate) Rock and a Hard Place

Removing Fertilizer Tariffs is Not a (Phosphate) Rock and a Hard Place

Last month, 90 members of Congress sent a letter to the chair of the U.S. International Trade Commission (USITC) requesting suspension of the countervailing duties on phosphates from Morocco to help ease fertilizer prices for American farmers. These duties were imposed in March 2021 when the USITC ruled that fertilizer imports from Morocco and Russia were receiving illegal subsidies that were hurting the U.S. fertilizer industry. Farmers know the rest of the story—since the duties took effect, prices of phosphates have increased over 300% to record levels (See Figure 1). While inflation, China’s recent export ban, and other supply chain issues may be putting additional strain on the fertilizer industry, the USITC tariffs are certainly not helping. 

The USITC is not stuck between a (phosphate) rock and a hard place on this issue. The U.S. is the third largest phosphate producer in the world, behind China and Morocco. The Mosaic Company—the largest U.S. producer—was the original petitioner requesting the USITC to investigate Moroccan and Russian imports. After a recent acquisition of CF Industries’ phosphate mines in Florida, Mosaic’s market share was recently estimated at around 74% of the U.S. market. And, instead of being crowded out of the market by foreign competitors, Mosaic exports around half of its annual production, mostly to Canada and Mexico. In fact, Mosaic’s own statements suggest that it does not need tariff protection. Larry Stranhoener, former CFO of Mosaic, said in an interview in 2013, “[fertilizer] is a product that is freely traded and frequently traded across borders, so regional market share data should not matter.”

We agree with Mr. Stranhoener. The U.S. fertilizer industry will be fine if the USITC removes these duties. Doing so would alleviate at least some of the strain on U.S. fertilizer prices. On top of ongoing energy and food inflation pressureglobal supply chain failures, and the ongoing agri-food consequences of the Russian invasion of Ukraine, U.S. farmers and consumers should not have to bear the costs of geopolitical posturing in the fertilizer market. 

Figure 1. Phosphate rock and diammonium phosphate (DAP) and triple superphosphate (TSP) prices ($/MT): January 2017 – December 2021  

Note: Phosphate rock is the f.o.b. price for North Africa; DAP is the f.o.b. US Gulf price, and TSP is the import US Gulf price. MO1 and MO7 on the horizontal axes correspond to the first and seventh calendar month (i.e., January and July).
Source: World Bank Commodity Price Data (The Pink Sheet). Data visualization provided by Professor Andrew Muhammad, PhD, University of Tennessee.                              
Shipping Container Disruptions Cause Considerable Export Losses for Southern Ports

Shipping Container Disruptions Cause Considerable Export Losses for Southern Ports

The coronavirus pandemic had significant consequences for the U.S. economy, prompting the federal government to help households through stimulus payments. Coupled with deferred consumer spending, these payments created additional demand for durable goods, satisfied by a considerable expansion of imports from Asia. At the same time, U.S. ports suffer from infrastructure constraints, resulting in an unprecedented supply chain bottleneck in Fall 2021. In addition, because of increasing freight rates from Asia to the U.S., it became more lucrative for shipping companies to export empty containers instead of filling them with agricultural products. This development had adverse consequences for U.S. containerized agricultural exports from Southern ports.

Figure 1 shows estimated containerized agricultural export losses from May 2021 to January 2022 and across product groups for Southern ports. The counterfactual export losses for Southern ports were comparably low between June and August 2021, amounting to an average of $94 million per month. However, the adverse impact tripled to $343 million in September 2021, and the next three months saw a further increase in export losses. Although a slight decrease is observable in December 2021 and January 2022, the export losses remained elevated at $490 million per month.

The estimated export losses vary widely across agricultural product groups. Panel (B) shows that containerized cereals and dairy exports were above the counterfactual level, experiencing trade gains of $258 and $48 million, respectively. In contrast, meat products saw the most extensive exports losses, amounting to $640 million between May 2021 and January 2022. Containerized animal food exports trailed closely behind, experiencing export losses of about $400 million. Fat and oil products were also disrupted, recording a reduction in containerized trade by $310 million, followed by oilseeds ($282 million) and beverage products ($207 million). Comparatively, vegetables and fruit & nuts saw more minor trade destruction, down about $147 million in total.

Our counterfactual estimates show that Southern agricultural exporters faced considerable difficulties due to container shipping disruptions in 2021. Although U.S. policymakers spearheaded several initiatives to resolve port congestion and container shortages, our estimates show that these initiatives failed to ease supply chain disruptions in the short run. To reduce port congestion, the Biden administration decided in November 2021 to extend the operation hours of U.S. ports. In addition, the Bipartisan Infrastructure Deal was passed in the same month, promising to expand port infrastructure, which could benefit U.S. agricultural exporters, but these investments will take time to materialize.

Figure 1. Agricultural Export Losses for Southern ports between May 2021 and January 2022

(A) Containerized Agricultural Export Losses by Month

(B) Containerized Export Losses

Note. Estimates based on trade data and empirical approach by Steinbach (2022).


*Sandro Steinbach, Corresponding Author, Agricultural and Resource Economics, University of Connecticut, phone: 860-486-2836, email:; Xiting Zhuang, Agricultural and Resource Economics, University of Connecticut, email: This work was supported by the National Institute of Food and Agriculture through the Agriculture and Food Research Initiative Award 2019-67023-29343. Any opinions, findings, conclusions, or recommendations expressed in this paper are those of the authors and do not necessarily reflect the views of the United States Department of Agriculture. We are thankful to seminar participants of the 2022 USDA ERS Brownbag Seminar for comments on an earlier version of this paper.

The Future for Cotton

The Future for Cotton

Cotton is a key crop for Southern agriculture and, like many other commodities in the South, is heavily export dependent. Unlike other commodities, we reimport a lot of cotton in the form of textiles which makes export demand more closely tied with U.S. import demand for finished goods. With economic and geopolitical uncertainty abound, some reflection on the cotton market and its risk exposure is helpful in long-term planning.

Cotton is a global commodity.  While the U.S. is a major export supplier to the world, there are many other major growers. A drought in the High Plains of Texas has implications for U.S. total output but may not drastically change cotton prices. Brazil, India, China, Australia, and Africa all impact price as well and so global events (and weather) are key factors in the observed market price.

Geopolitical concerns. China has been a key buyer of U.S. cotton but China’s strategic interests may not align with the U.S. over time. Cotton has been proactive at finding other buyers (Bangladesh and Vietnam for example), which is a good thing. The war in Ukraine indirectly impacts cotton through fertilizer and chemical prices and dislocations in prices in other competing commodities. So geopolitical concerns drive policy and prices but so far cotton has been ahead of the curve.

Long-term projections. Long-term projections are often not worth much and in the case of this year the projections in Figure 1 were made before the Ukraine invasion. The story? Not much reason to expect a lot of change from the long-term average. The reality? There is a lot of uncertainty about geopolitical and weather events that will result in price volatility. Future relations with China are the one variable that gives cotton the most heartburn, but our supply chains are slowly adjusting to the new global reality.

Figure 1. Long-term Baseline Projections

Source: International Center for Agricultural Competitiveness, Texas Tech University, 2022 Baseline Projections.
Note: Estimates were prepared before the Ukraine invasion.
U.S. Agricultural Trade with Plenty of Uncertainties but Expected to Hit Record Numbers in 2022

U.S. Agricultural Trade with Plenty of Uncertainties but Expected to Hit Record Numbers in 2022

U.S. agricultural exports are projected to reach a record of $183.5 billion in 2022, up $34.4 billion from 2020 and $6.5 higher than 2021. This increase is primarily driven by higher exports of most commodity groups with oilseeds and products leading the way (ERS-FAS/USDA).  Overall good commodity prices are the main reason for this record-setting value of exports with soybean exports reaching $31.3 billion. Overall grain and feed exports are projected to reach $42.9 billion led by higher wheat as well as feed and fodder forecasts.  Horticulture product exports reaching a record of $38.5 billion is partly driven by tree nut export projection while cotton reaching its second-highest level at $8 billion. Finally, livestock poultry and dairy exports are forecast at a record $39.2 billion, with gains in beef and dairy more than offsetting declines in pork.  Mexico is forecast to overtake Canada as the second-largest U.S. agricultural market with a projection of $27 billion, while Canada is projected at $26 billion.  China is expected to remain the largest market with a forecast of $36 billion.

 U.S. agricultural imports in 2022 are forecasted at $172.5 billion, up $25.8 billion from 2020 and $1.4 billion higher than 2021 due to expected increases in livestock and beef products, horticultural products and the new “Agricultural Products” definition and in this case distilled spirits. The U.S. agricultural trade surplus is expected to increase to $11 billion in 2022. Recent global events, mainly the Russia-Ukraine war could have significant impacts to these forecasts.

Trade Implications of Russia’s Invasion of Ukraine

Trade Implications of Russia’s Invasion of Ukraine

The Russian invasion of Ukraine has impacted financial and energy markets, as well as agricultural markets, increasing price volatility for major commodities.  Russia and Ukraine are not major markets for US agricultural exports, ranking 56th and 80th, respectively.  Before 2014, when Russia invaded Crimea, US exports of agricultural products ranged between $1.2 to $1.7 billion annually.  Afterwards, US agricultural exports to Russia have been around $250 million annually, with animal products (e.g., beef, poultry) taking the largest hit (USDA, 2022).  Moreover, neither Russia nor Ukraine are major exporters of agricultural products to the US; the US ranks 55th and 53rd, respectively.  That said, both Russia and Ukraine are major players in the international wheat and corn markets.  In 2020, Russia was the largest wheat exporter reaching almost $8 billion, while Ukraine was fifth with almost $3.6 billion in wheat exports.  Moreover, Ukraine is the fourth largest corn exporter reaching almost $5 billion, while Russia is the 11th with $400 million in 2020 (UN Comtrade, 2022).  Since Russia and Ukraine’s marketing year ends at the end of May, the impacts of the Russian invasion on their wheat and corn exports this marketing year could be minimal. On the other hand, it is unknown the extent of infrastructure damage for hauling and shipping, or the impact of shipping restrictions in the Black Sea that could slow down or increase the cost of trade.  Finally, Russia accounts for 14 percent of the world’s nitrogenous fertilizer exports and is the leading supplier of urea to the US. Additionally, Russia and Belarus accounts for about 20 percent of US potash imports (USDA, 2022). The sanctions again Russia and Belarus (for supporting the Russian invasion) could hurt US agricultural producers as they are already experiencing record high fertilizer prices.

UN Comtrade (2022).
U.S. Department of Agriculture (USDA) (2022). Global Agricultural Trade System. Foreign Agricultural Service.

Figure 1. Top Wheat Exporting Countries: 2020

Source: United Nations Comtrade Database, 2022

Figure 2. Top Corn Exporting Countries: 2020

Source: United Nations Comtrade Database, 2022