It's been a good year for Riceland Foods, Inc. Record sales of $873 million were reported at the cooperative's 83rd annual meeting held Nov. 19 at Arkansas State University in Jonesboro. The bottom line wasn't the only record Riceland leaders pointed to.
Dick Bell, Riceland's president and CEO, said the fiscal year sales jump of $123.2 million was due to several things: Arkansas' near-record 2002 rice crop and higher soybean and wheat prices. Bell also pointed to a nearly 50 percent increase in the cooperative's rice export business — boosted by sales to Cuba, Haiti and other Latin America countries.
Also during the 2003 fiscal year, the farmer-owned cooperative received a record 145.5 million bushels of rice, soybeans and wheat — including a record 112.5 million bushels of rice. Bell said the 2002 acquisition of a New Madrid, Mo., milling operation contributed to a rice milling record of 97.7 million bushels, an 18 percent increase from the previous year.
The cooperative's income in fiscal 2003 was up $43.7 million to $470 million. Bell reported that nearly 98 percent of the earnings were returned to Riceland's cooperative members as cash payments or distributions to marketing pool participants. The cooperative's total assets and member equity were both at record levels at year's end.
“Riceland's soybean and edible vegetable oils processing, as well as its wheat export business, continue to be an integral part of its service to its 9,000 farmer members,” Bell said.
Riceland's soybean meal production is primarily sold as a feed ingredient to Mid-South poultry and catfish producers. Edible oils, on the other hand, are sold nationally, much of it to restaurants.
Bell also reported that Riceland shipped 41 unit trains of wheat to Mexico (each train including 25 to 30 rail cars) and said NAFTA has provided Riceland an opportunity to supply Arkansas wheat directly to Mexican flour mills. The cooperative has gained a reputation as a dependable supplier of high-quality soft red winter wheat. Much of the credit for this rests with U.S. wheat breeders, said Bell, as new varieties are much more dependable and provide higher quality wheat than earlier ones.
The past year's export increases don't mean Riceland is focusing less on U.S. domestic rice markets. Despite the export jump, Bell said, rice sales to domestic markets were also up, accounting for nearly 60 percent of all Riceland's rice sales.
“Domestic markets are more dependable than export markets, and there continues to be potential growth in rice consumption in the United States,” Bell said. “Our goals continue to be to establish our Riceland brand name from coast-to-coast while maintaining our 30 percent share at the national market for milled rice.”
The Riceland CEO said Mid-South farm income will be up substantially in fiscal 2004 due to higher crop prices and smaller crops elsewhere in the United States. As it is a rare occurrence, Bell said, the region is fortunate to have large crops at a time when crop prices are rising.
Although 2004 will be a better year for farmers, Bell predicted a difficult one for processors such as Riceland. “The higher prices will cause more customers to try to cut back on their purchases, both at home and abroad.”
Saying that service is an important and integral part of Riceland's goals, Bell pointed to the cooperative's receiving network: 107 dumps at 32 receiving locations and 108 million bushels at 36 storage sites. He said while convenient, it wasn't necessarily an efficient system and comes at a cost. Less than 20 percent of Riceland's rice deliveries were to terminal locations in contrast to soybeans where more than 40 percent were delivered to terminal locations.