Mississippi growers are looking forward to the 2008 rice crop because of news of a potential world rice shortage.
Nathan Buehring, rice specialist at Mississippi State University's Delta Research and Extension Center in Stoneville, Miss., said the state's rice acreage has been expanding in recent weeks.
The U.S. Department of Agriculture's initial planting intentions report released March 31 forecast Mississippi's rice acreage to decline about 5 percent from last year.
“By the time we're finished planting, I think we will have about 10 percent more acres than in 2007,” Buehring said. “We planted 190,000 acres last year, and current market prices are inspiring an increase in rice intentions. I'm expecting almost 210,000 acres statewide.”
Mississippi rice growers produced a record 7,450 pounds per acre in 2007.
MSU agricultural economist Steve Martin said rice futures contracts have strengthened in recent weeks because of the global rice shortage. New crop contracts have advanced based on limited rice acres and because of strong prices in other grain markets.
“At the end of April, the May 09, 2008 contract was trading at $23.30 per hundredweight, and the November contracts were around $21.30 per hundredweight. For comparison, rice averaged $10.80 per hundredweight in 2007,” Martin said. “Rice prices should remain strong and possibly increase in the next several months.”
Martin said the rice shortage will have a minimal effect on U.S. consumers.
“Some import varieties could become scarce and more expensive as other countries limit their exports. Eventually, domestically grown rice also will become more expensive, but we should not see a shortage here,” he said.
Buehring said Mississippi's rice plantings are running slightly behind the five-year average because of dry-weather delays. On the other hand, the rains at the end of April were good for rice already in the ground.
“Recent rains will help the crop, and the potential for strong yields is good. Mississippi growers like to be finished planting rice by May 15,” Buehring said.
While all grain crops are experiencing strong market prices, growers also are facing record-high production costs.
“Fertilizer and fuel have been a big part of the rice production budget in recent years, and it's getting even bigger,” Buehring said. “You have to have both to grow rice; you can't afford to trim back. Rice is a crop that has a high demand for fertilizer.”
Buehring said in recent weeks, urea fertilizer has increased $100 per ton and could go up another $100 per ton in the upcoming weeks as worldwide fertilizer demand increases. Some farmers were paying between $550 per ton around May 1.