U.S. and global rice producers broke a number of records during the 2013-14 marketing year, and there could be more of the same for next year, according to Nathan Childs, senior rice market analyst, USDA’s Economic Research Service, speaking at the USA Rice Outlook Conference in St. Louis, Mo.
Global rice production is projected as a record in 2013-14, according to Childs, at about 473 million tons. Cambodia, Thailand, Egypt, Burma and Indonesia all produced bigger crops, while Australia, China and the United States produced smaller crops.
India meanwhile, has been having weather problems in its eastern regions, and its production estimate is likely to be taken lower.
Child’s update on the rice situation was given several days prior to USDA’s Dec. 10 estimates on crop production and supply and demand.
Cambodia, Thailand and Vietnam produced record or near-record crops in 2013-14, most on acreage expansion, which was driven by high support prices, noted Childs. “Yield is slightly down.”
With that many countries doing so well, “it’s no surprise that global supplies are the highest on record,” Childs said. “That’s the ninth consecutive year of larger global supplies.”
Global consumption is also at a record high, about equal to production. Bangladesh, China, Egypt, India, Southeast Asia and West Africa are mostly responsible for the increase.
Stocks building again
Global ending stocks “are up a little bit, but we have had seven consecutive years of increasing global ending stocks,” Childs said. “The global stocks-to-use ratio, however, is still at a comfortable 20 percent. That is not high. The huge stocks that hung over the market at the turn of the century no longer exist, but we are building stocks again.”
Estimated U.S. rice stocks are down slightly, while Thailand has record stocks of about 15.5 million tons. “Thailand accounts for most of the increase in global stocks. They have more than a 100 percent stocks-to-use ratio.”
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Childs expects a near-record 39 million tons in rice trade in 2013-14, on abundant exportable supplies and falling prices. “Brazil, Cambodia, Thailand and Vietnam have all increased exports. We have weaker shipments from India and the United States.”
Childs expects record imports in West Africa and China, “and that’s one reason why trade has been so high the last few years.”
The U.S. rice price difference over Thailand, at $160 a ton, is the largest on record, noted Childs. “It’s unlikely for that to be sustainable.”
More of the same for 2014?
For 2014-15, Childs sees little change in global rice area, slightly higher average yield, another record crop and record total use. “We expect lower trading prices and greater trade. Top importers include west Africa, China and the Middle East.”
In 2013-14, U.S. rice production declined about five percent from the previous year due to smaller area. But many states had record yields. Acreage, the smallest since 1987-88, was due to better revenue in competing crops, unfavorable conditions at planting and water restrictions in Texas.
U.S. rice yields were a record in 2013, noted Childs, for long grain and medium and short grain. “Most southern states had near records. Louisiana had a record yield. Texas yield, at 8,400 pounds (with a ratoon crop) was the largest ever for a southern crop. Missouri produced a near-record crop, while California yields were solid. The higher yields were due to the adoption of hybrid seeds in much of the Mid-South and favorable weather during the season.”
U.S. production declined due to lower acres with two states, Arkansas and Missouri, accounting for all of it. All of the decline was in long grain. Medium- and short-grain acreage increased.
Domestic use down
Domestic rice use is down about 4 percent, according to Childs. “It’s been lower the last few years, but we’re not sure why. We expect exports to drop about 7 percent – on a smaller crop, and the fact that we’re not very price competitive. We expect the decline to come from Latin America and Sub-Saharan Africa. The medium grain market is more stable.”
Long-grain exports are down about 11 percent, all in the milled category. “We’re not as price competitive. We’re starting to see some competition from Asia in the Western Hemisphere. With a $160 premium, that would be expected.”
U.S. ending stocks are declining, and are down about 15 percent this year, according to Childs. “It’s not a dangerous stocks-to-use ratio. It’s still comfortable, but they are dropping.”
Smaller supplies are the primary driver in the U.S. farm price outlook for rice, according to Childs. “Despite larger supplies, we do expect a slightly higher rice price in 2013-14.”
More acres in United States in 2014
For 2014-15 in the United States, Childs projects a big increase in long-grain area, mostly in the Delta. “We see little change in medium- and short-grain. We see another record yield for both classes of rice. In the South, this is driven by the hybrids.”
Childs projects that domestic use and U.S. exports will recover in 2014-15, on a larger crop and a larger residual. “We see expanded trade mostly in the Western Hemisphere. We see a big increase in long-grain exports, larger supplies, lower prices, another year of record global trade and a small increase in ending stocks. For medium- and short grain, we see lower global trading prices, but a steady market.”