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Analysis: Why aren’t rice prices higher?

A question frequently asked about rice prices is: With global rice stocks dangerously low, their lowest since 1983/84, why are US long grain rice prices so weak? Consider the following:

  • The 2003/04 Brazilian rough rice business was climatic-related and Brazil and the Western Hemisphere have now returned to a fairly normal production routine.
  • U.S. long grain rice producers produced a record crop.
  • U.S. supply is the second largest on record at 190 million hundredweight.
  • U.S. exports are soft, though USDA projects 80 million hundredweight. If achieved, it’s the third largest on record. Also, fewer rough rice exports are expected requiring increased dependence on milled rice sales which to date have not materialized.
  • 2004/05 ending stocks are projected to be the second highest since 1986.
  • With energy prices trending back up, the global economies demand for certain commodities remains a question.
  • Global production is rebounding.
  • Global weather remains fairly normal.
  • This is our Asian competitor’s harvest season.
  • Food security and protectionism are strongly embraced by most rice producing countries;
  • World trade at 24.9 million metric tons is the lowest in four years.
  • There is uncertainty about when the demand will emerge for U.S. rice due to declining global stocks. With Thai rice prices continuing to strengthen and with Thailand, Vietnam, and China expected to have tight stocks one hopes for increased U.S. export demand.

2004 US Long Grain Rice Production: In 2004, USDA data indicates that U.S. long grain producers produced a record crop of 169 million hundredweight and for the seventh consecutive year U.S. long grain producers have increased their yields. The 2004 yield was 6,569 pounds or 146 bushels per acre. U.S. long grain production and yields per state follows:

  • Arkansas: Arkansas long grain rice producers had a record production of 96.6 million hundredweight on 1.4 million acres (2nd largest acreage) with an average yield of 6,900 pounds or 153 bushels per acre. This was the seventh consecutive year of improved long grain yields.
  • California: California rice producers produce mostly medium grain rice, but they did produce 7,000 acres of long grain rice in 2004 with an average yield of 7300 pounds per acre or 162 bushels per acre. Total long grain production was 511,000 hundredweight. California’s largest long grain acreage was 67,000 acres harvested in 1984.
  • Louisiana: Louisiana long grain rice producers harvested 520,000 acres, 6th largest on record and significantly above last year’s harvested acreage of 430,000 acres. Their long grain average yield was 5,360 pounds or 119 bushels per acre, their 4th largest and total production was 28 million hundredweight, their 4th largest.
  • Mississippi: Mississippi long grain rice producers harvested their 15th largest acreage an estimated 234,000 acres the same as 2003. They had a record yield of 6900 pounds or 153 bushels per acre. Production was their 5th largest at 16 million hundredweight.
  • Missouri: Missouri long grain rice producers in 2004 harvested their 2nd largest acreage of 194,000 acres. In 2001, Missouri long grain producers harvested 207,000 acres. Their 2004 average yield was a record 6800 pounds or 151 bushels per acre 670 pounds (15 bushels) above last years record of 6,130 pounds or 136 bushels per acre.
  • Texas: Texas long grain rice producers harvested 216,000 acres, up 21-percent over last year, but only slightly above the average for the previous four years. Their average long grain yield was 6,750-pounds or 150 bushels per acre. Total production was 14.6 million hundredweight.
For more information on these numbers, go to

Bobby Coats is Extension agricultural policy analyst with the University of Arkansas Cooperative Extension Service.


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