"The factors that led to low rice prices have flipped, bringing bullish forces to the market. But, the strong prices will draw increased rice acreage worldwide, leading to price declines around harvest time this fall," said Abner Womack, co-director of the MU Food and Agricultural Policy Research Institute.
"Prices have been in a long dry spell," Womack told producers at a market outlook during the Heartland Agriculture and Natural Resources Expo at Black River Coliseum.
Currently the world supply of rice is short while consumer demand remains high, Womack said. Strong exports have led to significant reduction in U.S. stock levels.
Indonesia and the Philippines have been good customers for U.S. rice, Womack said. "Surprisingly, Brazil also has become a buyer."
When stocks are short and demand is strong, prices go up. That is the good news for now.
Long-term low prices drove many rice producers to reduce acreage last year, Womack said. With higher prices, we'll see that acreage starting to come back, he added.
While the current markets are topping $8, FAPRI projects a season-average price for the current market year at $7.24 per hundred.
Womack said he expects to see increased plantings this year in all six rice producing regions of the United States, with the most activity in Arkansas and California. Overall he expects a 9 to 10 percent increase in planted acreage.
With the increased acreage, prices likely will slide downward even though exports are expected to remain strong.
FAPRI economists see the 2004-05 season-average price settling back to around $6.20 per hundred.
Womack cautioned growers to not make planting decisions based on the current $8 price extending into next season.
Current higher soybean prices, running above $8 per bushel, also will attract land into bean production.
Bruce Beck, regional MU extension agronomist at Poplar Bluff, said the annual Ag Expo attracts some 15,000 visitors.
"It is our winter county fair," Beck said. "It is a big trade show, with nearly 120 exhibitors." Educational programs are held throughout the two-day event. Agriculture is featured on the first day, while gardening and home grounds care are featured the second day. Duane Dailey is a writer for the University of Missouri.