December 12, 2018
World rice milled production for 2018/19 is estimated at 490.7 million metric tons, the second highest on record.
The 2018/19 world rice total supply, estimated at 698 million metric tons, is the largest on record.
Third, 2018/19 world rice exports at 49 million metric tons is the largest on record.
World rice ending stocks for 2018/19 are expected to be at 163 million metric tons is the highest on record.
And, assuming the fundamentals are correct, this is a very bearish global rice balance sheet, so, we should be mindful and respectful of global fundamentals when making 2019 rice business decisions.
USDA U.S. long grain rice supply and demand estimates
2018 long grain rice harvested acres are estimated at 2,174,000 acres, 24 percent higher than 2017.
2018 long grain rice production is estimated at 159 million cwt., 24 percent above 2017, the 5-year average 144.5 million cwt. and the 10-year average 147.2 million cwt.
2018/19 long grain rice total supply is estimated at 202.4 million cwt., which is 11-percent above 2017/18, the 5-year average 189 million cwt., and the 10-year average 190 million cwt.
2018/19 long grain rice ending stocks are estimated at 32.4 million cwt., that is 60 percent above 2017/18 and the third highest since 1985, the 5-year average 23 million cwt. and the 10-year average 24 million cwt.
The U.S. long grain balance sheet suggests, assuming no new demand source or sources, currently slowing global growth, and ongoing global economic and political dynamics, that fewer U.S. long grain acres need to be plant in 2019.
Arkansas total (long and medium grain) rice harvested acres in 2018 is estimated by USDA at 1,422,000 acres, 318,000 acres or 29 percent greater than the 2017 acreage with an estimated yield per acre of 7500 lbs. (166.7 bus.), which is the third largest on record. Total 2018 production is estimated at 106.7 million cwt.; the previous 5-year average is 95.1 million cwt.
2018 Arkansas long grain rice acreage, yield and production
Arkansas long rice harvested acres in 2018 is estimated by USDA at 1,240,000 acres, 285,000 acres or 30 percent greater than 2017’s acreage of 955,000 acres. 2001 to 2010 averaged 1,364,000 acres and the previous 7-year average (2011 -2017) was 1,099,000 acres. Total 2018 production is estimated at 93 million cwt., third highest in the current eight production periods.
The top four Arkansas long grain rice counties by harvested acres in 2018 are: Poinsett County with 88,069 acres; Lawrence County, 86,666 acres; Lonoke County, 82,417; and Jackson County with 77,391 acres.
2018 Arkansas medium grain rice acreage and production
Arkansas medium grain rice harvested acres in 2018 is estimated by USDA at 181,000 acres. Between 2001 and 2017, the top 5 years (2009, 2010, 2011, 2014, and 2015) averaged 223,000 acres, while the remaining 12 years averaged 132,250 acres. 2018 production is estimated at 13.6 million cwt., or 25 percent above 2017 and 54 percent greater than 2016.
Top three Arkansas medium grain rice counties by harvested acres in 2018 are: Jackson County with 31,959 acres, Poinsett County with 29,488 acres, and Lawrence County with 20,780 acres.
2019 Arkansas long grain rice acreage and production outlook
Given U.S. long grain balance demand, my 2019 Arkansas long grain rice harvested acreage expectation is 1,128,400 acres (2018 = 1,240,000) or 9 percent below 2018 with a preliminary 2019 production estimate of 84.6 million cwt., which would still be the fourth largest in the current eight production periods.
Why fewer acres? First, global rice ending stocks are at record levels. Second, U.S. long grain rice ending stocks for the 2018/19 marketing period are estimated at 32.4 million cwt., 60 percent above 2017/18 and the third highest since 1985 with a 5-year average 23 million cwt. and the 10-year average 24 million cwt. The demand for U.S. long grain rice does not merit U.S. long grain rice farmers planting over 1,128,000 acres in 2018.
Third, assuming no new demand source or sources, fundamentals and the global economic setting will still likely weigh heavily on farm prices,
Fourth, currently slowing global growth weighs heavily on the commodity sector,
Fifth, global economic and political dynamics have global markets on edge.
Finally, given the above, fewer U.S. long grain rice acres need to be harvested in 2019.
Consider the Following:
2019 Arkansas Long Grain Rice. Rice specialists in each of the rice producing states presently expect the same or some expansion in rice acreage.
USDA NASS 2018 Arkansas Rice Crop Progress and Condition Report indicates a production season that exceeded the previous 4 seasons.
USDA NASS 2018 Arkansas Soybean Crop Progress and Condition Report indicates a very poor production season.
the last five years Arkansas producers averaged planting 1,363,000 total rice acres and 3,244,000 soybean acres.
In 2019 our producers would like to plant fewer acres of soybeans and more acres of rice.
Given the rice balance sheet that is not practical.
Two scenarios: expanding long grain acreage problematic
The following are two scenarios that indicate expanding just Arkansas long grain rice acreage is highly problematic without an additional demand source or sources.
Scenario 1. 2019 Arkansas long grain rice production expectation assuming 2019 harvested acres of 1,240,000 acres equals 93.0 million cwt. of production, the same production as 2018 long grain rice production and the third largest production in the current eight production periods.
Scenario 2. 2019 Arkansas Long Grain Rice production expectation assuming 2019 harvested acres of 1,390,000 acres equals 104.3 million cwt. of production, 12 percent long grain rice production increase over 2018 or potentially the largest production in Arkansas long grain rice production history.
U.S. long grain rice ending stocks 1982/83 – 2018/19
Neither Scenario 1 nor 2, assuming other states have similar acreage trends without significant new demand source or sources, would likely move the ending long grain rice stocks figure in the 2019/20 marketing period to the highest level since 1985 above 2010’s 35.6 million cwt.
2019 Arkansas medium grain rice outlook
My Arkansas medium grain rice 2019 harvested acreage expectation is 185,000 acres, 2.2 percent above 2018 with an expectation of 13.9 million cwt., 2.2 percent greater than 2018 and as always producers should study demand for medium grain rice and have a market located before planting.
In 2018, Arkansas long grain rice producers harvested 1,240,000 acres of rice. World rice ending stock are projected by USDA to be at record levels. 2018/19 U.S. long grain rice ending stocks increased from 20.3 million cwt. in the 2017/18 marketing period to 32.4 million cwt. in the current 2018/19 marketing period or a 60 percent increase and the third largest on record. Without an increase in U.S. long grain rice demand, Arkansas and U.S. long grain rice producers need to plant fewer — not more — long grain rice acres in 2018. At some point, residual long grain rice simply may not have a home.
A conservative 2019 Arkansas long grain planting season of 9 percent or 1,128,400 fewer acres could possibly be price supportive, assuming other states follow Arkansas’ lead.
2019 is a year for rice, cotton, soybean, wheat and feed grain producers to be super conservative.
Bobby Coats is a professor in the Department of Agricultural Economics and Agribusiness, University of Arkansas System, Division of Agriculture, Cooperative Extension Service. E-mail: [email protected]
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