The world rice supply and use shows production of 473 million metric tons. That’s record production, something seen for the last several years.

“We’ve also had record disappearance” said Carl Brothers, Riceland Foods senior vice president at the Mid-South Farm and Gin Show in Memphis on Feb. 28. “Because of that it has reduced ending stocks to 105 million metric tons.

“If you go back to the late 1990s, we were flooded with rice in the world. The higher the stocks-to-use number, the more available rice there is in the world.”

 

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At that time, Brothers told a full house, “there were some problems with the Asian crops and the stocks-to-use ratio dropped down to a low of 16.9 percent in the 2007-2008 period. At that time, both India and Vietnam banned rice exports from their countries. But we’re clawing our way out of that low stocks-to-use ratio, although that’s still at around 20 percent in the world.”

What about major export shifts?

Considering 2010-2011, Thailand was the number one exporter. “It had been the top exporter for a number of years – probably since the early 1980s.

“If you look at export trade, it has increased dramatically. Back in 1980 the United States was the number one exporter in the world at something like 3.1 to 3.2 million metric tons. But the amount of rice traded in the world was quite small. Of all the rice produced at that time, only about 12 million tons that entered world trade. So, we were a significant supplier in the world.”

Since then, the world rice trade has increased almost four-fold while the United States has remained rather flat. “I made a presentation for the (Riceland) board a few years ago and said, ‘if you really think that through – if your market had grown three or four times and yet you remained flat – I’d say you were in a dying business.’

“But in our case, we were seeing domestic disappearance. As more and more (immigrants) arrive, particularly in our coastal areas, we see much more rice consumption in the United States. It’s also going into pet food, in beer, and almost every restaurant in the country. Back 30 years ago, you wouldn’t have seen that.”

India exported 2.8 million tons in 2011 and is now number one at 10 million metric tons. “That’s a big shift.”

Thailand, at 10.7 million metric tons in 2011 and 8.5 million tons in 2013-2014, is typically in the top three rice exporters in the world. That drop to 8.5 isn’t because Thais don’t have the rice, said Brothers.

 

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“The prime minister came in on a platform calling for increasing farmer income. She introduced a program similar to our loan program back in the 1980s when farmers were paid $4 per bushel for rice going into loan. It wouldn’t clear out at $4, so the U.S. government took over rice left and right.

“The same is happening in Thailand, except they paid the equivalent of $10 per bushel on a rough rice basis. On a milled rice basis it’s about $850 per ton. That rice just won’t clear the market and they’re struggling to remain a main exporter. And they’re building stocks, something we’re concerned about.

“What happened with prices when the international stocks-to-use ratio was at 35 percent and then they collapsed to 16.9? The price skyrocketed. On a milled rice basis, prices went over $1,000 per ton. That didn’t last very long – remember India and Vietnam put on bans and everyone panicked.”

U.S. and Asian rice prices are the widest in history. “We’re hanging around $600 to $650 per ton with the Asians at about $400 per ton.”