What is in this article?:
- What to do with bigger rice crop, new farm bill programs?
- Iraq a key
- Mill CEO explains outlook for U.S. long-grain rice.
- Iraq a key to deal with larger crop?
- How will new PLC program impact rice producers next year?
There are some key market fundamentals likely to impact rice prices in the new crop year.
“Every year, the first fundamental to look at is the size of the crop,” said Keith Glover, president and CEO of Producers Rice Mill, during the 2014 Arkansas Rice Expo on Aug.1. “We all know we’ll experience a bigger (rice) crop than in 2013. The one thing to notice when looking at the USDA’s latest acreage data is that the increase will all happen right here in the Mid-South. In Arkansas, we’re up 46 percent in rice acres. Our neighbors in Mississippi and Missouri will be up 36 percent. The other three rice-producing states will actually be down acreage-wise.”
Looking at Arkansas’ rice acres specifically, “this will be the first time in our history that the state will represent over 50 percent of the nation’s overall rice acreage.”
The USDA is currently estimating that the 2014 U.S. rice crop will come in at 169 million hundredweights. “That will make it the third largest crop in the last decade.
“Assuming the USDA is close, compared to last year we’ll have an additional 37 million hundredweights of long-grain production. USDA is also projecting that a year from now ending stocks will likely be about 9.5 million hundredweights more than they are now. That makes sense because we’re ending a marketing year where our carryout stocks are likely to be the lowest we’ve seen in about 10 years. So, we’ll probably see a rebound in the size of the carryover.”
Do the math and Glover said the “most important number” is the 28 million hundredweights left to deal with. “We as an industry will have to market that additional long-grain rice.”
Where will that long-grain rice go?
“I’d argue the most likely candidates will be the export markets. We’re very happy with our strong domestic demand. However, truthfully, the demand is very consistent and stable. There isn’t much fluctuation from one year to the next.”
Typically, when there is a surge in U.S. rice production, “the one place to continuously send the rice is the export market.”