Speaking at the 61st Mid-South Farm and Gin Show, Carl Brothers, senior vice president of Marketing and Risk Management with Riceland Foods, painted an optimistic domestic picture for rice producers, yet pinpointed specific concerns on the global market.

“Rice is competing well. If you haven’t looked at rice, it’s the most lucrative crop you can plant right now,” says Brothers. With stocks-to-use ratio standing at 20 to 22 percent, Brothers believes current world supplies are adequate.

Globally, the U.S. growth position remains weak. “Everyone else is going great and we’re staying flat,” says Brothers. From 2011 to present, U.S. rice exports increased only slightly from 3.2 million to 3.4 million metric tons of milled rice. U.S. exports decreased slightly from 39 percent in 2011-12 to 37 percent in 2012-13.

“India and Vietnam are coming out strong in export trade with Thailand carrying large stores,” says Brothers. Thailand currently has 16 million tons of rice in storage. “They have a huge number sitting in warehouses today,” says Brothers.

Currently, U.S. rice stands at $650 to $700 per ton compared to Thailand at $550 per ton. Vietnam and India, although priced at $400 per ton, struggle with low quality.

“U.S. prices are increasing due to less pressure from South America,” says Brothers.

U.S. rice acreage grew 11 percent in 2011-12 but continues to be tight across the South. Long-grain acreage increased 25 percent in Arkansas but decreased 19 percent in Mississippi where corn replaced rice acreage. Medium-grain rice acreage decreased 55 percent in Arkansas between 2011-12. “The oriental markets are high value and we struggle to sell medium grain because of the quality,” says Brothers. Because of that reality, Brothers says medium-grain rice acreage needs to be controlled.

Arkansas led yields with 166 bushels per acre, followed by Louisiana at 143, Mississippi at 160 and Missouri at 155 bushels per acre.

When talking about U.S. supply and demand, Brothers pointed out that production has increased 8 percent while carryout decreased 25 percent. While long-grain rice production increased 24 percent, Brothers noted the milling yields are low.

Looking at long-grain rice, Brothers talked about Asia and Haiti. “There is concern with Asian competition as the U.S. market has decoupled from world competition.” Haiti, upset at increased U.S. prices, has turned to Vietnam. “This is a bit worrisome as we’re seeing the first shipments into Haiti from Vietnam,” says Brothers.

U.S. sales to Iran are strong due to less production coming from South America. “We haven’t sold this much to Iran in a decade,” says Brothers.

Equally important, the U.S. shipped 79,000 tons last year under the U.S -Colombia FTA. Net revenue in 2012 was $6.6 million with $3.15 split between the two countries. Rice research programs in Arkansas, California and Louisiana benefitted. “Arkansas received $1.45 million, California $700,000 and Louisiana $400,000,” says Brothers. Payments were based on acres and the funds designated specifically for research.

In the medium-grain markets, Egypt and Australia represent a threat to California, but not the South. “Australia is going to give California a run for the money,” says Brothers.

As of February, Brothers reports strong mill activity. “Our mills are very busy now with a 16 percent increase in overall exports. Twenty-eight percent of our rough rice is heading down the river,” says Brothers.

Brothers says on-farm storage continues to rise and warehouses are full.

When looking at long-grain rice varieties and quality issues, Brothers hesitated. “This is an issue for which I have no answer. With 28 long-grain rice varieties and 4 medium-grain, it is extremely difficult to keep identity preserved. CL XL 745 represented nearly half of the long-grain hybrid crop at 49.9 percent for 2012-13. The problem persists with medium-grain rice as well. “We can’t compete with quality,” says Brothers.

Looking ahead, Brothers believes the existing number for planted rice acres as reported in January 2013 to be low. Overall, the U.S. acreage is down 3 percent. “I believe we’ll see acreage up again,” he says.