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NASS report puzzles rice industry

The National Agricultural Statistic Service’s Nov. 10 crop production report had several people in the Mid-South rice country shaking their heads in disbelief.

The report pegged this year’s U.S. rice crop at 203.5 million hundredweight with average yield estimated at 6,959 pounds per acre. The estimate for yield and production were much higher than many anticipated — given problems with the crop in Arkansas, which produces about 45 percent of the U.S. crop.

NASS estimated average yield for Arkansas at 6,850 pounds per acre on 1.345 million acres, but dropped the yield only 50 pounds per acre from its October estimate. By comparison, Mississippi’s yields, at 7,000 pounds per acre on 229,000 acres were dropped 200 pounds since October.

Jack Scoville, an analyst with Price Futures Group, noted, “U.S. rice production estimate was down slightly from last month, probably not as much as the bulls had hoped. We have had some significant weather in the Mid-South that has had a pretty good impact on yields which once again didn’t seem to reflect in the USDA numbers.”

Meanwhile, “The rice market has been taking a beating. It may have already factored in a lot of these numbers, and we may see that market try and hold, but it’s a market that’s going to be tough to rally through the end of the year.”

Randy Woodard with Cache River Seed, Cash, Ark., was among those puzzled by the NASS report. “I don’t know how they’re coming up with these numbers. On our seed farm (in Arkansas), yields are off about 15 bushels to 20 bushels from the year before. On one of our best seed farms, we’re going to dry about 152 bushels. Last year, we dried 175 bushels. Our five-year average is about 168 bushels.”

If the average yield in Arkansas this year were off just 10 bushels (560 pounds) from last year’s yield of 7,130 pounds, average yield for the state would be 6,570 pounds per acre, 280 pounds per acre under the NASS estimate. That would lower Arkansas rice production by 6 million hundredweight, to 88 million hundredweight. The U.S. rice crop would decline from 203 million hundredweight to 197 million hundredweight.

Arkansas Extension rice specialist Chuck Wilson believes that NASS’s figures on acreage don’t appear to be in line with Farm Service Agency’s certified acres. “I think acres in Arkansas are about 70,000 acres more than what NASS is forecasting. I also think the yield is less than what NASS is forecasting. In the end does that make total production the same, or less? I don’t know. That’s what I’m struggling with.”

Last month, NASS had to correct its Oct. 10 crop production report because its acreage figures for dry edible beans, canola, corn, sorghum, soybeans, and sunflower did not match those on file with the Farm Service Agency. No mention was made of rice, however. Wilson says the discrepancy for rice acres still exists, but added that NASS is probably being “conservative” in making revisions.

On how short yields may be, Wilson said he is hearing from buyers who are taking in less rice. “But I also know that every year, we build more and more on-farm storage. A reduction in rice being delivered is not necessarily an indication of less rice harvested.”

Nonetheless, Wilson says that much of this year’s Mid-South rice crop was in trouble from the beginning. “The crop was about three weeks late. Then, the fact that the crop was late meant we had so much of the crop in the field when the hurricanes (Gustav and Ike) came through. If we had been in a normal harvest window, we would have had half the crop out of the field before the hurricanes ever came through. We were set for less yield from the get go because we didn’t get the crop planted on time.

“Growers tell me they are down from last year anywhere from 10 bushels to 20 bushels, farm average, which is 10 percent to 15 percent,” Wilson said.

“We are aware of the concerns,” said Anthony Prillaman with NASS. “It’s something we’ve been hearing over the last few months. Our numbers are based on farmer surveys. We went back and dug through everything. We’re confident that the numbers we published were solid based on the survey indications that we had.”

NASS’s annual crop production report will be issued Jan. 12 and could contain changes in yield and/or acreage, according to Prillaman. “We’ll see if we need to adjust any harvested acreage based on the losses that we know may be out there because of the hurricanes.”

Rice producer David Smith, who farms in Lawrence and Jackson counties in Arkansas, says his crop was hurt by a cooler August, “and some of my later rice had terrible yields. My average is going to be off a solid 20 bushels from last year. Typically, we’re 170-bushel rice farmers, and we’re barely going to make 150 bushels this year.”

All of Smith’s rice is stored on-farm, and he plans to hold it until prices improve. “The economic current is running swiftly downhill and everything is caught up in it. I think the true fundamentals of the rice market, if they were known, would be bullish.

“Hopefully, we should get some kind of rally in the spring. I don’t think farmers will plant rice at $6 a bushel. I realize inputs have come down some, but they’re still high.”

While Smith was surprised at the NASS report, he’s not putting too much into it. “I learned long ago to not let the government report tell you about the market. Instead, let the market tell you about the government report. For example, if the market was to close up strong after the Nov. 10 report, that means the traders don’t believe the government report.”

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