What is in this article?:
- Millers address rice quality concerns, warn of market demands
- Definitions, signals, trends
- Millers discuss rice quality and market demands.
- Louisiana winter meeting agendas heavy quality concerns.
- Chalk major source of customer unhappiness.
Definitions, signals, trends
Back in Louisiana, Morgan says “rice quality” currently has no hard-and-fast definition. An effort led by the USA Rice Federation is attempting to change that and “try to move the needle back to a high-quality level for U.S. long-grain rice. At the same time, they want to balance yield with quality and that’s tough.
“A lot of researchers have told us ‘if you want higher quality, then it’ll mean lower yields.’ As a mill, we’re just saying ‘here’s what we’re hearing and we’re forced to respond.’”
It is imperative that the quality issue be addressed, says Morgan. “Eight to 10 years ago, the perception was that U.S. long-grain rice was the highest quality in the world. However, at the time, if you look at the varieties being grown, they were more consistent and higher-quality than those now. A farmer, even if he couldn’t count on such high yields as today, could plant them and get a consistent yield and high milling crop.
“Now, look at the rice we’re shipping out of the United States. It doesn’t even look the same. You go ‘How could (the current) U.S. No. 2 and (the older) U.S. No. 2 be the same? That can’t be.’”
Sadly, says Morgan, due to quality issues U.S. rice is slipping to a second tier position. “South American rice is considered higher quality. That’s hurt our image, hurt our ability to export rice. When people look for high-quality rice they may not be thinking of the United States first. We’re now a second or third option.”
What has been the reaction of Louisiana’s rice farming community to the push for better quality?
“We’re not telling farmers what to do,” says Morgan. “All we’re saying is that rice varieties aren’t created equal and they should know there’s greater demand for high-quality varieties.”
The chief driver of that are market forces. “You can sell higher quality rice into more markets at better prices. We’re only reflecting how we can sell rice out of the mill.
“Growers have asked me for a set differential between the varieties. I hate to use the word ‘discount’ because, really, it just comes down to what the rice is worth. Some rice is worth more, some less. That’s how it works.”
There is no absolute differential, insists Morgan. “That number changes given the markets we’re looking at. If we can move lower-quality rice at good prices, the difference is smaller. At times when we have trouble moving any of it, the differential is wider.”
However, “there are certain varieties of rice that we know, on average, are more problematic. Of course, there will bad lots of any variety – it won’t all be of the same quality. But certain varieties do have better markets than others.
“It’s time that a signal is sent that quality is a problem and needs to be addressed. If we don’t, we’ll continue to slide down the scale. And if you’re not the one with the best quality, you can’t sell rice at a premium.”
Louisiana Rice Mill buys medium- and long-grain rice and sells to both domestic and international markets, industrial users and packagers and everything in between. “So, we have a good overview and see the issues on all fronts.
“It appears we’re heading back to variety-specific purchasing. If you IP (Identity Preservation) rice of good quality you’ll have a much better shot at getting a good price compared to a guy who doesn’t IP his rice and mixes it all together.
“That’s a message that farmers are hopefully getting. Of course, it’s up to them to make a decision on what to plant. It’s not easy but they should know how the markets are trending.”