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At outlook conference: High costs big issue for rice growers

In 2006, U.S. rice producers fought for their farming livelihoods in a knockdown, drag-out rumble against adverse weather, high costs and a few scattered, but market-killing grains of microscopic mayhem. Here's more from rice experts and producers attending the USA Rice Outlook Conference in Las Vegas:


The 2006 season “was one of amazing achievement for Arkansas rice producers, accomplished under extraordinarily difficult climatic, economic and political conditions, with the added uncertainty of the biotech issue,” said Arkansas Extension economist Bobby Coats.

Arkansas rice producers harvested 1.4 million acres of rice in 2006, a 14 percent reduction from 2005. All-rice yields of 6,820 pounds per acre produced a crop of 95.5 million hundredweight, the fifth largest crop on record and about 49 percent of the rice produced in the United States.

But many battled high costs that threatened profitability. Rice producer Dean Wall of Walnut Ridge, Ark., “had a pretty decent year, yield-wise, but net returns aren't what they used to be. Our cost of production was up about 15 percent to 20 percent over the year before, which was 15 percent to 20 percent over the year before.

“The GE rice situation caught us off guard, and we had some weather problems in our area, an unusually dry summer. We missed almost all the summer rains.”

Wall, who farms about 1,500 acres of rice, did not plant any acreage of Cheniere (the variety in which GE rice was discovered) in 2006, “but I'm not isolated from the problem. We all sell rice into the same markets. When countries require overly sensitive testing or no tolerance, it dampers our prices and our ability to export and sell rice. So whether you grow Cheniere or not, you're suffering the consequences.”

Davis Bell and his son, Greg, of Des Arc, Ark., produced a cheaper rice crop, but only average yields. “We were really disappointed in some fields, but we were pleasantly surprised in others,” Davis said.

“There seemed to be less disease pressure than normal, irrigation expenses were up a little but only because our rotation put some rice fields on power units that cost more to run. But all in all, our input costs were down 5 percent to 7 percent. So we saved a little money.”

On an industry plan to remove GE rice from the U.S. seed supply, including not planting Cheniere in 2007, Bell noted, “We have a lot to do in a very short time. In saying that, the plan is definitely a living organism. It's going to change as we go. But I'm excited about the plan. We're trying to cover all the bases we can to get the seed supply as pure as possible.”

Greg Bell, who has been farming with his father since 2004, said the year “flew by for me. We picked up some more ground and everything went surprisingly smoothly from planting to harvest.”

In 2007, Coats expects Arkansas producers to harvest around 1.3 million acres of rice, a 6.5 percent drop from 2006 and a 20 percent drop from 2005. He expects a total production of around 93 million hundredweight, a decrease of 1.8 percent from 2006.

Coats noted that global economic momentum remains strong, “which implies a strong demand for commodities. Grains may be undervalued relative to many other investments in the world, which attracts attention from the large investors. The price trend in the grain market is up, but navigating these price trends in difficult.

“Pricing opportunities remain for the 2006-07 crop. Uncertainty surrounds the rice biotech issue and only time will identify its total impact.

“Crop subsidies and crop substitutes are issues that will increasingly be addressed as we move forward.”


Louisiana suffered “a huge hit in rice acreage” in 2006, with area sliding from 525,000 acres in 2005 to 345,000 acres, noted Johnny Saichuk, rice specialist with the LSU AgCenter. The declines were due primarily to the lingering effects of Hurricane Rita, which included soil salinity problems, and to the economic situation in some parishes.

“It was the most challenging year I've ever faced,” Saichuk said.

“We were still feeling the hangover from Rita, and we had chemical injury problems as soon as we got going. Even after all that, it looked like we were going to have a decent crop, and the crop was attacked by narrow brown leaf spot. Then the GE issue hit.

“Crop yields also took a real hit this year, and I think our yields are even lower than USDA projections. Recent surveys indicate we'll be anywhere from 5,300 to 5,500 pounds per acre.”

According to Saichuk, about 24 percent of Louisiana rice acreage was planted to Cheniere in 2006. Commercial supplies of this variety were found to have traces of an unapproved genetically-engineered organism, the presence of which has wrecked export sales to some European countries.

The variety will not be offered for commercial planting in 2007. “That's going to be important for us. How are we going to fill in the gap? I suspect that we will see some of that filled with Clearfield rice, especially if CL 151 comes on the market. We will also see an increase in hybrid acreage.”

The loss of Cheniere has been tough on seed dealers, too, Saichuk noted. “A lot of dealers have already sold their Cheniere for grain. They paid premiums to the guys who grew it, so that cost has to be passed on. Dealing with rice planted following Cheniere could be a problem, too.”


Mississippi lost significant acreage in 2006, going from 265,000 acres in 2005 to 190,000 acres, a 25 percent decrease. Steve Martin, an economist with Mississippi State University, sees acres for 2007 steady, or higher, to as much as 220,000 acres.

One reason for optimism is Martin doesn't expect drastic increases in input costs next year.

Fuel prices are holding steady for the moment, and the futures market indicates the trend may continue.

According to Nathan Buehring, Mississippi Extension rice specialist, “about 15,000 acres of rice had to be replanted in the state due to glyphosate drift. “The largest area was 1,226 acres, which wiped out an entire farm. We tracked the drift from up to 4 miles away from the site of the target.

“Most drift complaints were on aerial applications, Buehring said.

“We haven't gotten a lot accomplished in regulation of drift. Maximum fines for applicators are only $2,000, even for multiple complaints — there are no suspended licenses.

“With these rules, we are going to fight this problem again, especially with Flex cotton coming on the market.”


According to Andy Kendig, a weed scientist with the Delta Center, Missouri rice area remained steady in 2006 at about 214,000 acres.

Substantial rainfall fell in southeast Missouri in September, “right in the middle of rice harvest, which created several war stories and lodging problems. But we came out of it with only minor inconvenience.”

Yields increased slightly from 2005, which combined with an increase in acreage “gave us a production of just over 14 million hundredweight.”

Just over 20 percent of the Missouri crop was planted to Cheniere, “which is going to be an issue this coming year, with it not being available to us.”

Kendig believes that in 2007, cotton acreage will decline and corn acreage will increase. “But with our precision leveling, we will tend to not rotate away from rice.”


According to Christopher Greer, farm advisor at the University of California, the 2006 growing season began in an all too familiar fashion, with a cool, wet spring. “That led to delayed planting and wet seedbeds, which creates weed management problems. We had high, sustained temperatures in July, then it cooled off in August very rapidly.

“We had some issues with the early-planted varieties, including blanking from high temperatures. We had some cold weather blanking on the late-planted rice.”

California benefited from very favorable harvest conditions early in the season, but later-planted rice was still being harvested around Thanksgiving, when conditions were not as favorable.

Yields were below average, but better than last year, according to Greer. “We had generally very good milling quality early during the season, but it started coming down on some of the later harvested rice.”

California acreage was largely unchanged from the previous year's 526,000 acres. Yields were 7,600 hundredweight per acre, a slight increase from last year, “but not as good as we'd like to see it.”

Total production in the state came in at 40 million hundredweight, a slight increase over 2005.

This added to a carryin of 3.5 million hundredweight is right at consumption levels (exports plus use) of between 40 million and 44 million hundredweight. With this fairly tight supply situation, and with good planting weather, Greer expects 2007 area to possibly exceed 550,000 acres.


According to Ted Wilson, director, Texas A&M University Agricultural Research and Extension Center in Beaumont, Texas, rice acres are expected to increase about 10 percent from the 2006 level of around 148,000 acres.

“Our ratoon crop data from 2006 is just now starting to come in. If the ratoon crop performs as well as we think it will, we may have a record year in terms of average total yield for Texas.

“We're seeing a slight decrease in the percent of acreage going to conventional rice, with hybrids up to about 16 percent in 2006.

“Yields varied tremendously in 2006, with an overall average of slightly over 7,000 pounds.”

Total production is just shy of 11 million hundredweight, according to Wilson.

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