U.S. rice producers have all the tools necessary to make a bumper rice crop almost every year. Is a fair price for their effort too much to ask?
That was the question on the minds of most rice producers attending the 2001 USA Rice Outlook Conference in St. Louis.
“Right now, depressed prices,” answered Jim Carroll, rice producer from Brinkley, Ark., when asked what challenges farmers are facing. “Most farmers have the equipment and the know-how to get good yields. We just don't get much for it.”
Carroll doesn't have an easy solution. “The exports need to be here. But right now the whole world is in a depression.”
For the last few years, Carroll has expanded his rice acreage “because that's where we can make the most money with the government payments. But China is sitting on some big reserves that may come on the market when it gets in the WTO. Everybody thinks the WTO issue is one-sided, that we can export to them. But they can also start exporting to other countries.”
“I'm real anxious to see the new product developments that we have coming up,” said Davis Bell, farmer from Des Arc, Ark., referring to the conference's new products session. “They've asked us to cut costs for the last 15 years. I think I've cut about all I can cut. But there are always some edges somewhere that you can trim.”
Bell was optimistic about farm bill prospects, however. “Washington realizes that the farmer is in a dire situation. All I ask is that they understand. I realize that the rest of the country is in a dire situation, too. We don't need any more than the airlines need, than the hotels or carmakers need. Just don't leave the farmer out.”
What kind of farm bill would Bell like to see? “We can't do a higher loan rate. That's a no-brainer. We would be government farming for sure then. We've got to have some price support.”
Bell holds out hope that a sudden change in world supply could quickly buoy prices. “The world rice supply is ample to slightly surplus. That may change tomorrow. If something happened to curtail production somewhere, we could see dramatic changes in the market.”
Bernie, Mo., rice producer Larry Riley says making the right management and financial decisions are crucial to surviving during a time of low prices. “Do the best possible job you can do. I don't agree with a lot of people who say that bigger is better. We also need to do a good job of marketing what we produce.”
Riley, who raises 1,800 acres of rice with two partners and one employee, hasn't increased his rice acreage in 10 years.
“I wish there were a way we could get a fair price for our product without looking to government subsidies,” Riley said. “A short crop in a major rice-producing country could change prices considerably. But we don't see many of those movements any more. When have you seen corn, wheat or soybeans jump the limit in two to three days consecutively?
“Farming's been good to me,” said Riley, who began his career on 80 acres in 1961. “My dad tried to tell me not to, but I wouldn't have it any other way. If I had it to do all over again, I'd probably do the same thing. You have to love farming to stay in it.”
Iowa, La., rice producer Jimmy Hoppe says the farm bill “is the most important thing on our minds right now, and certainly we are trying to get the best deal for rice that we can.”
“Rice prices are in the tank and so are other commodities and agriculture as a whole is suffering,” Hoppe added. “In rice, we have a large crop this year, large stocks and we need to get those stocks down.”
Hoppe, who is chairman of the USA Rice Council, said the USA Rice Federation “is trying to move more food aid shipments. Rice is a staple in 70 percent of the world, so it's a prime commodity to use in food aid. But we haven't been able to get nearly as much as we think we ought to get.”
Hoppe noted that the federation “is working in 60 countries trying to open markets. We've had our share of problems. It seems like everytime we get a decent market developed, we lose it because of food embargoes or sanctions.
“We also need to get the Cuban market back,” Hoppe said. “Forty years ago, we were shipping 100,000 metric tons out of Louisiana every year. That went away. Certainly, any amount of rice we move into Cuba will help us and we're in a prime location to get that done.”
The terrorists' attacks of Sept. 11 did slow rice trade, noted Hoppe. On the other hand, “there may be some areas we can move some rice into, like the relief effort in Afghanistan.”
But Hoppe is not altogether happy with U.S. recognition of the role that rice producers can play in the food aid program. “There was a 22,000-ton ship at the Port of Lake Charles in south Louisiana that picked up 10,000 metric tons of products, mainly lentils, corn/soy blend, wheat/soy blend and yellow peas for food aid to Afghanistan. But there was not a grain of rice on it.”
The shipment, put together by USDA, “was promoted as something that would help the people of Afghanistan, but we should have had some rice on that ship. We are a little disappointed. There was a big article in the newspaper about it, and here we are right in the middle of rice country.”
Tunica, Miss., rice producer Nolen Canon agrees that the farm bill is the most important issue facing rice producers today. “It's likely that many producers have turned over the marketing of their crops to someone else. That means all the producer can do is produce as much rice as he can.”
Canon, chairman of the U.S. Rice Producers Association, would prefer that farm subsidies for rice producers come in the form “of some type of AMTA payment. I don't think raising the loan rates is the way to go. That would encourage over-production (at low prices) which would go in the amber box under the World Trade Organization.” (The amber box refers to any trade-distorting policies a country may accumulate through its farm policy.)