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Rice — wet year, regulations

Wet weather at the wrong time will have a big influence on rice profitability in the Mid-South this year and next, but rice producers at the USA Rice Outlook Conference in New Orleans were also focused on two other factors that could impact their bottom line — rice prices and regulation.

“Overall, we had a good season,” said Jackie Loewer, a rice producer from Branch, La. “We had some really big yields. We didn’t break any records, but we did well in rice particularly, and soybeans looked good. We had a couple of days of pretty good harvests, then it started raining when everything was ready. It took several weeks before it was dry enough to thresh.”

While harvest operations proved expensive due to problems stemming from wet fall weather, “at least we had something to sell,” Loewer said. “We were through with beans and second crop rice before Thanksgiving, got all our beans delivered last week and sold them Dec. 7.”

Loewer is holding rice in bins, noting, “I think there’s some upside potential in rice. I’m not sure exactly where it’s going to go. Will it go to where it did in the spring of 2008? I don’t think so. But I can’t see anything real negative. Venezuela is going to need rice. Of course, they don’t like us, so they may not come to us right away.

“Around the world, I don’t see a lot of downside. Here in the United States, we’re somewhat stable with our yields year in and year out. The only downside we see right now is that the mills are really struggling in the export business.”

Loewer believes rice acreage for rice will hold in 2010. “Even at the prices we have right now for rice, people are selling.”

One problem could be the anxiety that some foreign buyers have expressed regarding the volatility of the U.S. futures markets. “Theoretically, using futures works for pricing rice, but in practice, it can be brutal,” Loewer said.

Mike Strain, commissioner of the Louisiana Department of Agriculture and Forestry, who welcomed attendees to the conference, said producers should be concerned with coming regulation.

“Most Americans are three or four generations removed from the farm,” Strain said. “This lack of understanding of the importance of production agriculture is leading Washington bureaucrats to advance legislation and regulatory policies (such as cap and trade legislation) that will have a negative impact on agricultural producers.”

“All this is coming down at us,” Loewer said. “We seem to be in a very defensive mode. That’s not our comfort level. That’s not what we like to do. When we have a problem on the farm, we like to go fix it. Right now, we’re just accepting what’s going on. We’re just receiving information on what we’re required to do next year.

“We need to be more proactive. A lot of it is simply letting people in Congress know. The role of a leader is to accurately define reality. It’s our job to explain to Congress the consequences of what is happening at the farm level.”

Travis Satterfield, a Benoit, Miss., soybean and rice producer and president of the Delta Council for 2009-10, says the 2009 crop year is one he would just as soon forget.

“We had sort of a rough start. Initially, we had a wet spring and couldn’t get the crop planted. We had a lot of replant situations in soybeans. Then after we got the crop up, it turned dry. We had a small soybean crop that wasn’t growing real well so we ran some water across it, then we got some heavy rains. It just seemed that from the start to finish, we were out of step the entire season. Then the wet fall weather was another detriment to us. This has been year we’d like to forget and start over for next season.”

Satterfield noted that prices for soybeans and rice “seem fairly positive at this point. Corn prices appear to be a little weak, but hopefully that will improve. It looks like input costs have sort of stabilized, so maybe there is the prospect for a pretty good year in 2010.”

Satterfield said many Mid-South commodity producers are feeling the pinch of severe crop losses this year and higher costs next spring for ground preparation.

“That’s a big concern right now. We still have a lot of land that did not get much fall preparation, and it’s pretty rutted. We have some work to do.”

Satterfield is hopeful for some type of disaster assistance for commodity producers in the Mid-South, including sweet potato producers in Mississippi, who suffered severe losses in 2009. “We have strong support from our congressional delegation, and from surrounding states including Arkansas. When you have a regional disaster, it’s always a little more difficult to go forward, but we’re positive they’re working hard.”


TAGS: Rice
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