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Articles from 2004 In July


Corn+Soybean Digest

August 1, 2004

Ginners see widely variable cotton crops

LAFAYETTE, La. – Despite all the early-season roadblocks thrown up for Mid-South farmers by the weather gods, this year’s cotton crop still has potential for good to above average yields, according to area ginners.

Incessant, record-setting rains in June, followed by more rain in early July, had a lot of farmers singing the blues, and resulted in a lot of shallow-rooted cotton plants, members of the Southern Cotton Ginners Association reported at their summer conference at Lafayette.

But wet fields soon dried out under a hot July sun, and crops in many areas were being irrigated as the month moved along.

Among the brightest prospects for 2004 are for the Missouri Bootheel, according to David Blakemore. “We had 388,000 planted acres,” he says, “and 105 percent of that is good to excellent.

“I’ve never seen a crop looking this good this early. A lot of the cotton is two weeks early, and we may be ginning some of it in August. The Bootheel is showing prospects for good crops across the board. Everyone’s looking forward to a good fall harvest season.”

Chris Clegg echoed much the same situation for West Tennessee. “We’ve got a good crop so far. We’ve had very timely rains, and it looks like we have potential for average to above-average cotton yields.

“A lot of the crop has shallow root systems, and if it gets a lot of drought stress, that can show up in reduced yields this fall. But as things look right now, we’re hoping for a bit above average crop.”

In Arkansas, says John Stuckey, farmers in the northeast area planted three to four weeks earlier than last year, with only a small amount of replanting required. “It’s a relatively clean crop, with a two-bale potential.”

Unfortunately, Stuckey says, crops in other areas of the state were significantly hurt by the heavy rains. “Overall, those growers are probably looking at a good to average crop.”

Louisiana growers are “cautiously optimistic” about cotton prospects, according to John T. Carroll. “Recent weather has been good, a lot of people managed to get nitrogen applications made, and the crop is looking better. When all’s said and done, I think we’re looking at an average crop statewide.”

Many areas of Mississippi got 20-plus inches of rain the last three weeks of June, says George King. “Some areas were hurt, but the last few weeks have brought favorable weather over most of the region. With no more weather adversities from here on out, I think we have potential for an average crop.”

e-mail: hbrandon@primediabusiness.com

Livestock hedging strategies make use of options

Price risk contributes a major source of revenue and cost variability and may be a determining factor in whether a livestock enterprise is viable or not.

Price risk may be addressed by several tools at the operator's disposal. Among the tools are futures hedges and options. Futures hedges were discussed in our column in the March 26, 2004, issue of Delta Farm Press; option hedges and option strategies will be discussed here.

An option is the right but not obligation to buy (call) or sell (put) a commodity futures contract at a specific price (strike) for a specific cost (premium) on or before a certain expiration date.

The premium of an option is made up of two components: (1) time value — a combination of time to option expiration and market volatility, and (2) intrinsic value — any positive difference between the strike price and current price of the underlying or related futures contract.

There are a number of key points to consider using options for price protection and these are:

  1. The operator must know his breakeven costs to determine if pricing is occurring at a profit or a loss. Hedging deals only with the producer's revenues, and while costs have nothing to do with hedging, if a producer is going to hedge (lock-in) a loss, he should be aware of it, in our opinion.

  2. Basis is used to translate a futures or options price quote into a price that is meaningful to the operator.

  3. Puts are used by short hedgers to protect against falling prices. Calls are used by long hedgers to protect against rising prices.

  4. There is no one strike price that is right for every operator. The level of protection or insurance each person wants or needs is a direct result of his ability to bear risk.

  5. After you buy an option, you then have the following alternatives:

  • Sell it back to the market or liquidate it (the price may be more or less than initial purchase).
  • Let it expire with no value.
  • Exercise the option [require the writer (seller) of the option to create a futures position for you in the stipulated direction and price].

Prices in the cattle market now are in both a short-term and intermediate-term uptrend. All strategies will be considered with rising prices. Current cash price in Arkansas for large to medium frame No. 1 600- to 700-pound steers are $105 to $115 per hundredweight. As a producer, you are concerned prices might fall between now and Oct. 1, when you plan to market your calves.

Some strategies for marketing alternatives are:

  1. Establish a minimum sales price: Buy a put.

    This is a simple, straightforward strategy. The operator could buy a slightly “out-of-the-money” October '04 feeder put option at $106 strike for a premium of $5.20 per hundredweight (premiums for different strike prices are quoted daily). An “out-of-the-money” put option has a strike price that is below the current futures market, and a premium that is less than an “at-the-money strike price.”

    “At-the-money” means a put or call option that is the same as the current futures market price. The operator would have effective price protection at the strike price $106 minus the put premium $5.20 or an effective net sales price of $100.80 per hundredweight, less the broker's commission.

    In other words, the minimum return is $100.80 per hundredweight. There is no price risk.

  2. Establish a minimum sales price and take advantage of rising market prices: Forward contract and buy a call.

If the operator is concerned that prices may continue to rise but wants the security of a sales price already locked in, the cattle can be forward contracted for sale on or before Oct. 1 at a price specified by the buyer. Then the operator could buy an at-the-money call for Oct. 1 selling the call back to the market on or before Oct. 1 if it has any intrinsic value.

The maximum return of this strategy would be the contracted price of the cattle plus the call option's intrinsic value (if any) at sale time minus the broker's commission.

The minimum return if prices fall before Oct. 1 will be the forward contracted price minus the option premium and broker's commission.

Transactions in options carry a high degree of risk and possible financial loss. Buyers and sellers of options should familiarize themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances.


Rob Hogan, Scott Stiles, Kelly Bryant, and James Marshall are University of Arkansas Extension economists. Comments or questions? Call 870-460-1091 or e-mail bryantk@uamont.edu.

Will U.S. export 12.5 million bales?

The amount of raw cotton the United States has to export this year to keep cotton stocks fairly tight looms as large as the Great Wall of China. Or should we say the great wall of China cotton production?

According to Ed Jernigan, president and CEO of Globecot, Inc., one thing in the way of U.S. cotton export prospects this year is the huge crop the world is expected to produce in 2004-05, including a potential record-breaking crop in China.

“Even though prices have collapsed into the dirt as the season has progressed, the price rally last fall and early this year did lead to increased acreage in many parts of the world, said Jernigan, speaking at the fifth annual Cotton Roundtable at the New York Board of Trade in New York City.

Jernigan forecasts world production of 106 million bales in 2004-05, compared to USDA's July projection of 104.7 million bales. Either figure would be a world record and much more than the world will need.

Jernigan expects world consumption of 100.15 million bales will increase world ending stocks by 4.5 million bales and create tall challenges for U.S. cotton production.

“The mechanism of global world trade and prices has changed dramatically since U.S. cotton consumption has collapsed,” he explained. “Several years ago, the United States consumed 10.5 million bales, produced 18 million bales and had to export 7.5 million bales to stay even. When we exported more than this, stocks tightened and prices rallied.

“Now with domestic consumption forecast next season at 5.5 million bales, if we produce 18 million bales or more, we have to export 12.5 million bales to stay square.”

And to affect prices in a positive way, the United States would have to export even more. Jernigan noted that in 1995-96, “U.S. cotton stocks dropped to 2.6 million bales, but domestic use was above 10.6 million bales, so stocks were only about 26 percent of domestic use.

“Last year, we got excited because stocks dropped to 3.6 million bales. That 3.6 million bales was small, but it was almost 50 percent of domestic cotton use. We will have to get stocks to 1.5 million bales to get where we used to be at 3.6 million bales (in terms of stocks to use).

“The United States has a major burden to export,” Jernigan said. “This hangs over the price in a major way. We have to export almost 14 million bales for stocks to be tight again, and that's something we've never done before.”

On the other hand, Jernigan does expect some volatility in the market, “because China has 35 percent of the world cotton use and 30 percent of the world production. So I'm not married to the bear side.”

Despite government attempts to reel in China's expanding economy, consumption in China is expected to continue at a fast pace, according to Jernigan, who has visited the region three times in the last month. For 2004-05, “we see cotton use in China at 35.35 million bales, with half of that going to domestic demand.”

Meanwhile, cotton use in India is also expected to increase about 5 percent to 14 million bales, up almost 700,000 bales from USDA's estimate. In the rest of Asia outside of China, retail sales “are growing and will increase slightly, driven by demand in Thailand, Indonesia and Vietnam. Meanwhile cotton consumption is slowing in South Korea, Japan and Taiwan.”

Here's more of Jernigan's observations on the major cotton-producing countries outside the United States.

  • China is now the center of the global cotton universe for both consuming and producing cotton. It's the most important component of the supply and demand picture but is often the most misunderstood as well, according to Jernigan.

    Last year, Chinese prices for cotton neared a dollar a pound at mills for higher grades throughout most of the country, although Chinese cotton producers sold their cotton for somewhere around 75 cents per pound.

    At the beginning of this season, China provided incentives for growers to plant more grain, “but it didn't work,” Jernigan said. “The large grain-producing areas in China are north of the cotton belt, so the two crops don't necessarily compete directly.”

    Jernigan noted that in late May, expectations were that China would increase cotton acreage by 10 percent to 12 percent. “The reality is that growers increased acreage more than anyone thought, overall about 16 percent.”

    Jernigan noted that the Xinjiang Province, the largest cotton-producing area of China, increased acreage by 16 percent to 17 percent over last year. The increase “has major implications to total output. The crop is also off to an excellent start and could produce almost 10 million bales of cotton.”

    On the other hand, too much rain is causing some concern in the north China crop. “The next 60 to 90 days will be crucial in China. Last year, during this time, the typhoon season brought in abnormally heavy rains and set off a wet season that hurt the crop.”

    Jernigan is forecasting a Chinese crop of 29 million bales to 31.5 million bales, compared to USDA's forecast of a record 30 million bales. “China will produce 30 percent or more of the world's cotton under this scenario. So you can see how important its role is going to be.”

  • For the last five seasons, India has produced from 10.6 million to 13.2 million bales on the largest cotton acreage in the world. India's internal cotton market appears insulated from international markets, according to Jernigan. “Prices there have actually rallied over the last several months. Growers have been getting good returns on cotton and are excited about it.

    “Planting is still under way in India, and my feeling is we could have the same level of shock at the acreage increase as we did in China. Acreage is up 15.7 percent in the northern zone.”

    The coming monsoon is the big factor for the rain-fed regions of India, source of 80 percent of India's production. The monsoon this year has been very irregular, causing some concern over whether the Indian crop can reach its full potential.

    If a normal monsoon does occur, “Indian production could reach 13 million bales,” according to Jernigan. That's slightly above USDA projections of 12.5 million bales. While dry weather could scale these projections back 2 million bales, perfect weather could result in a crop of nearly 14 million bales.

  • USDA is forecasting an 8.75 million bale crop in Pakistan, “but we don't see that. Growers did increase acreage, but only 7 percent to 8 percent. We have Pakistan at a half million bales below USDA.”

  • Brazil's harvest of its 2003-04 crop, still in progress in July, appears to be on its way to a record. Record exports are also expected. “There is a lot of enthusiasm for the 2004-05 crop. Current prices are 36 cents to 37 cents a pound. But as prices rallied last year, there was a lot of forward contracting for the 2004-05 crop. We have the crop at 6.2 million bales.”

  • “The central Asian crop has gotten off to an excellent start. USDA has the crop at 7.4 million bales, up almost 600,000 bales from last year. We agree with that assessment.”

  • “Last year, the African Franc Zone produced about 4.2 million bales. This year, I think they will produce 4.6 million to 4.7 million bales.”

  • The forecast is for about 2 million bales from Australia, down from USDA expectations.

  • No changes are expected for Greek cotton production, while Turkey cotton production is up slightly.

The Cotton Roundtable is sponsored by Ag Market Network, New York Board of Trade, Certified FiberMax, Cotton Incorporated and Farm Press Publications.


e-mail: erobinson@primediabusiness.com

Gulf Coast crop has been a survivor in 2004

The cotton crop in south Texas reminds you of the old Timex watch slogan: “Takes a licking and keeps on ticking.”

This year's crop in southern Texas, and in Louisiana and parts of Mississippi, is unusual in that, rather than being starved for water as has often been the case in recent years, it has received far more moisture than normal.

By the end of June, most of the Lower Rio Grande Valley, the Coastal Bend, the Brazos Bottoms, the Blacklands and much of Louisiana had received the equivalent of their average annual rainfall — in the first six months of the year.

Since then, much of the region has turned dry. Clay soils in some fields have cracks more than an inch wide. But some areas have cotton that appears to have the potential for making the best yields in years.

Cotton traders, some of who believe USDA's August crop report could raise total U.S. production to 19 million bales or 1 million bales more than the July estimate, are taking all of this into consideration.

Not that the condition of the U.S. crop has as much bearing on cotton futures these days. The attention of cotton traders seems fixated on reports that China, which is believed to have increased plantings significantly after last year's weather-reduced crop, is enjoying much more favorable weather conditions.

Growers in Texas and Louisiana would remind you that their crop is far from made. The heavy rains across Texas and into Louisiana and the lower Delta of Mississippi in May and June did not encourage the development of a taproot in many fields.

With dry weather occurring now, growers and consultants report the crop is deteriorating, particularly on heavy clay soils that are stingy about giving up water.

The Texas Gulf Coast crop is also late — either from delayed planting or because cotton sat in water for extended periods — and growers are becoming concerned about harvesting the crop before the beginning of September, which typically is the wettest month for the region.

Any shortfall in south Texas could have a greater bearing on futures prices this year because of efforts by one of the major seed companies to promote the region's cotton as a higher quality fiber.

The fact that south Texas has a crop at all may be a testament to plant breeders for all of the seed companies who have been working to develop varieties that produces higher quality fiber — and yields — under a wide range of growing conditions such as those that threatened to inundate the region earlier this season.

At this stage, the last thing growers want to hear is that they should have forward contracted or hedged their crop when prices were considerably higher last winter and even into the spring. For now, we'll just say thank goodness that the U.S. cotton program has remained whole this far into the Farm Security and Rural Investment Act of 2002.


e-mail: flaws@primediabusiness.com

WTO prosposal could be give-away

The latest effort to restart the stalled Doha Round of World Trade Organization negotiations could easily be the end of the three years of talks rather than a new beginning, the chairman of the National Cotton Council said.

A draft WTO framework document released in Geneva July 16 contained several references to the U.S. cotton program with no accompanying comments on other subsidies or language that would improve market access in foreign markets.

“In many ways, the Doha Round is moving backwards for U.S. agriculture,” said Woody Anderson, a Colorado City, Texas, producer. “This most recent draft document is vague and general in too many respects, except in its references to U.S. programs that are being targeted by other countries.

“It is too much of a one-way document that may be the final gasp of the Doha Round if it is not significantly changed.”

Rep. Charlie Stenholm, D-Texas, ranking member of the House Agriculture Committee, said the draft document's market access provisions were not ambitious enough and that it singled out cotton unfairly.

“An analysis of this language indicates that it could allow as much as a quarter of the European Union's and 30 percent of Japanese tariff lines to be considered ‘sensitive products,’ which are shielded from aggressive tariff cuts,” Stenholm told U.S. Agricultural Ambassador Allen Johnson. “From the U.S. perspective, this approach would not produce the ‘substantial improvements in market access’ called for elsewhere in the draft.”

No other agricultural commodity is mentioned in the draft document, Anderson noted, but it includes four specific references to cotton and at least two other indirect references.

“It is stunning to us that the General Council of the WTO would issue such a draft and would continue to provide credence to the attempt to single out one U.S. agricultural commodity program for destruction,” Anderson said.

Charity groups such as London-based OxFam have led an international campaign seeking to fix blame on U.S. and European agricultural subsidy programs for lower commodity prices in African countries, including Burkina Faso and Mali.

The U.S. Environmental Working Group, a pseudo-environmental group, has also attacked U.S. commodity programs, obtaining lists of farm program payment recipients and displaying them on its Web site with no explanation of why the payments are received.

“The WTO draft unnecessarily singles out cotton,” Stenholm noted. “The United States has correctly insisted that cotton only be considered in the context of the wider agriculture talks or as a part of an initiative involving all competitive products. The fact that no other agricultural commodity is singled out in the draft highlights just how inappropriate it is that multiple references are made to cotton.”

Anderson said the Doha Round agricultural negotiations have degenerated into a blame game, with almost every paragraph in the draft document laced with efforts to punish the United States and exempt countries like Brazil, India and China from real changes, real increases in market access and real reforms.”

The Doha Round negotiations are stalled because participating countries left a Doha Round meeting in Cancun Mexico last September without being able to reach agreement on a proposal by a group of countries led by Brazil to force the dismantling of the U.S. cotton program.

Despite the claims of OxFam and the EWG, recent university studies show the U.S. cotton program has little impact on cotton prices. USDA and International Cotton Advisory Committee forecasts show China and Brazil are dramatically increasing their cotton acreage while that in the United States is declining.

A study by Texas Tech University indicates the U.S. cotton program has had only a marginal impact on cotton prices, while a complaint filed by Brazil with the WTO claimed it had caused production to increase by 35 percent and prices to fall by 40 percent.

“Efforts in the WTO negotiations to target U.S. cotton are unfair and threaten the round,” said Anderson. “At least the Derbez text tabled in Cancun contained formulas and gave the world an idea of which direction the negotiations were headed. This document makes little headway down the road toward a real agreement. We believe this process has swerved significantly away from the interests of the United States.”

In noting there have been several proposals with more detail than this text, Anderson said (1) the United States has signaled a willingness to be specific with respect to reductions in domestic support and (2) the European Union has committed to the elimination of export subsidies.

“What is missing is any specific statement from developing countries concerning real increases in market access,” Anderson said. “They have not put forward concrete proposals, and the process could grind to a halt as a result.”

According to Stenholm, the draft framework also calls for disciplines to insure that food aid is not used as a mechanism for surplus disposal.

“It is widely accepted that food aid is surplus, since it is not counted as part of domestic or international commercial sales,” Stenholm said. “This is why the Food and Agriculture Organization has established ‘Principles of Surplus Disposal’ that food aid countries must follow. The goal should be to prevent displacement of commercial sales by food aid, not to prevent food aid.”

“When confronted with such a vague document, it is easy for some to find good parts and a few words that support a particular position,” said Anderson. “But, when this attempt at a trade agreement is read in its entirety, it is clear it contains little in the way of equivalent commitments on market access for U.S. agriculture and takes this negotiation closer and closer to a give-away by the United States.”


e-mail: flaws@primediabusiness.com

23 years at helm: Richard Bell retiring from Riceland

Richard E. “Dick” Bell, under whose leadership the Stuttgart, Ark.-based Riceland Foods Inc. became an international powerhouse in processing and marketing of rice, has announced his retirement at the end of July.

He will be succeeded by K. Daniel Kennedy, now serving as Riceland's executive vice president and chief operating officer.

For the past 23 years of his 27 years of service, Bell has been the 9,000-member cooperative's president and chief executive officer.

During his tenure, Riceland became the world's largest processor and marketer of rice and Arkansas became the nation's largest rice-producing state, accounting for nearly one-half of U.S. rice production.

Riceland is also a major marketer of soybeans, soybean products, and other grains produced in the Mid-South.

“Dick Bell has guided Riceland through a period of tremendous growth,” says Tommy Hoskyn, Stuttgart farmer and chairman of Riceland's board of directors. “Since he joined us in 1977, the volume of rice we handle for our farmer members on an annual basis has doubled. His attention to business management and policy development have been a good combination, not only for Riceland but for the entire rice industry.

“If you grow rice anywhere in the United States, you have benefited from Dick Bell's experience and understanding of how policy is developed in Washington, D.C. We appreciate the work he has done on behalf of our members, as well as the entire rice industry.”

Before joining Riceland, Bell served as assistant secretary of agriculture for international affairs and commodity programs. He also had served as president of the U.S. Department of Agriculture's Commodity Credit Corporation and as chairman of the Federal Crop Insurance Corporation.

Bell's knowledge of commodity marketing, agricultural policy, and international affairs has made him much in demand as a speaker, and his crop outlooks have been a tradition at the Mid-South Farm & Gin Show at Memphis.

His early career was as a foreign service officer at American embassies in Ottawa, Canada; Brussels, Belgium; and Dublin, Ireland.

A native of Illinois, he holds degrees in agricultural economics from the University of Illinois.

Bell will continue to be available to Riceland in an advisory capacity on strategic issues, particularly those related to farm legislation, international trade, and agricultural-related research.

He also expects to continue a number of outside activities, including service on the boards of Arkansas State University, the University of Arkansas for Medical Sciences Foundation Fund, the Stuttgart Regional Medical Center, Easter Seals Arkansas, Museum of the Arkansas Grand Prairie, and as chairman of the Grand Prairie Early Childhood Development Council.

Bell's successor, K. Daniel Kennedy, joined Riceland in August 2000, after 16 years with Monsanto Company, where he held positions in domestic and international marketing/strategic planning.

A Louisiana native, he holds a bachelor's degree in agricultural economics from Mississippi State University and a Master of Business Administration degree from Northwestern University.

“In the four years Danny Kennedy has been at Riceland, he has brought a different dimension to the company as a result of his work at Monsanto,” Hoskyn says. “With his extensive experience and the management team in place at Riceland, the board of directors believes we're well-positioned to meet the grain marketing needs of our members.”

During the 2003-04 fiscal year ending July 31, Riceland expects annual sales and revenues to hit a record $951.1 million, up 9 percent from the previous year. It will also set records for earnings and payments to its farmer members and will have record total assets and member equity at year's end.

Stink bugs feeding on all Delta crops

Stink bugs are showing up in Delta crops, including rice, soybeans and cotton. The insects have slipped up on many producers, causing substantial yield losses over the last several years. The losses have many growers seeking ways to detect and avoid encounters with stink bugs.

A soybean producer told me last year that he had hired a consultant to watch his beans because the $30 to $40 per acre loss to stink bugs was too large. Since bean prices have increased, the detection of stink bugs is more important.

In soybeans and cotton, we have three primary types of stink bugs — brown stink bug, green stink bug and southern green stink bug. Of these, the brown stink bug is the most difficult to control.

In rice, the only stink bug of significance is the rice stink bug that feeds primarily on grains such as rice, grain sorghum and wheat and on wild species of grass with seed heads.

The brown stink bug and the two green stink bugs feed primarily on larger seed crops such as cotton and soybeans. They are also found in rice but do not cause any significant injury.

An excellent publication on the identification of stink bugs is available from the University of Arkansas Web site at http://publications.uaex.edu/.

Stink bug identification is especially important in soybeans and cotton, where the brown stink bug occurs primarily. A similar predaceous stink bug, the spined soldier bug, is often confused with the brown stink bug. Because the predator is a very effective enemy of many caterpillars that feed on crops, it is important to conserve it.

How do you control stink bugs?

First, you should know the treatment level for each crop. Those vary from state to state, but in general are very similar.

In soybeans, Arkansas recommends one per row foot or nine per 25 sweeps.

For cotton, one stink bug per 6 row feet or when 20 percent of medium size bolls show internal injury is the treatment level.

In rice, the treatment level is five bugs per 10 sweeps the first two weeks of heading and 10 per 10 sweeps the second two weeks of heading.

The level of control for stink bugs using various insecticides may differ. Most pyrethroids will control all stink bugs except the brown stink bug. The brown stink bug is most effectively controlled using Bidrin and methyl parathion. In cotton, bifenthrin or Capture and Discipline, is the most effective pyrethroid for controlling brown stink bugs, according to the ratings in the University of Arkansas insecticide recommendations.


Donald R. Johnson is a retired Arkansas Extension entomologist who consults on rice and cotton production in Arkansas.

RiceTec, BASF announce new products

A new herbicide option for Clearfield rice and more RiceTec hybrids to choose from — including medium grain hybrids — were highlights of a field day at RiceTec's headquarters in Alvin, Texas.

RiceTec hybrids include XL8 and XL7, two high-yielding, long-grain hybrids with excellent disease packages, according to Jim Thompson, seed sales and marketing manager for RiceTec.

BASF, which markets Clearfield rice, announced the 24-C registration of Beyond herbicide for Clearfield XL-8 and CL 161 only at the field day. CL 161 is a traditional rice variety with resistance to Newpath herbicide. Clearfield XL8 is a hybrid with Newpath resistance.

Beyond has the same mode of action as Newpath, but is a different compound, according to BASF. The label requires that it be used after two Newpath applications have been made. It is basically for use as a rescue treatment for red rice. It controls larger red rice than Newpath, but has less residual. The timing for application is between rice tillering and up to panicle initiation.

Both new technologies bring a lot of benefits to the market, noted Thompson.

“On the hybrid side, there is consistency of yield, reduced risk from diseases and other environmental factors that can affect standard varieties more than they affect hybrids,” Thompson said. “On the Clearfield side, Newpath and Beyond herbicides provide excellent red rice control and overall weed control. Put them together (in Clearfield XL8) and it's just a dynamite combination.”

Thompson said RiceTec has enjoyed good annual growth in hybrid rice sales since the company first entered the market several years ago, especially with Clearfield XL8. “Obviously, we're still in the early stages of developing an overall market, but we've had a multi-fold increase in market share from last year and expect to double market share again next year.”

When RiceTec hybrids were introduced, RiceTec recommended that growers limit the number of acres planted in hybrids. “But with our newer hybrids combining excellent standability, disease resistance and good milling characteristics, we're past that stage.

“Some growers plant 100 percent hybrids. Some are at 50 percent. Some are still in the initiation stage, just getting comfortable with hybrids. Our average acreage per customer has increased significantly.”

RiceTec also introduced several new grain hybrids, including two medium grains.

XP712 is the first medium grain hybrid in the U.S. market. Standability has been equal to Bengal, with milling yield slightly less than Bengal.

XP716 is a medium grain advanced experimental hybrid similar to Bengal in maturity, milling and standability

New long grain hybrids include XP723, which has milling yield and standability similar to Wells, and XP710, an extremely high-yielding, early-maturing hybrid with excellent grain yield, disease tolerance, standability and milling yield. Limited supplies of XP710 were available through special purchase agreements for 2004.

Michael Skalicky, who farms rice in Ganado, Texas, is raising two medium grain hybrids this year, XP712 and XP716, on 160 acres. “Coming from Bengal with blast, stem rot and sheath blight, I was looking for a better disease package and milling quality, said Michael, who raises 400 total acres of rice.

“We'll see how it works when the combine runs through, but so far it looks real good. It has a little sheath blight in it.”

Michael's father, Gary, raises 900 acres of rice, including 128 acres of Clearfield XL-8 “for the disease package and yield. Conventional varieties will get close to it, but it will outdo conventional.”

Gary also raises 275 acres of CL 161 to improve his red rice control. “Without a herbicide-resistance rice line, we have to go with a corn, grain sorghum rice rotation.”

Research targets Mexican rice borer

The Mexican rice borer, a serious pest of rice and sugarcane, is rapidly moving east through the Texas rice belt toward Louisiana's high-dollar sugarcane industry.

Migrating up from Mexico, the Mexican rice borer was first discovered in Rio Grande Valley sugarcane in 1980. It quickly became a devastating pest, causing some farmers to forego harvesting entire fields. Over the next two decades, the insect gradually moved northeast, and during the 1990s, it became a serious threat to rice.

Mo Way at the Texas A&M University System Agricultural Research and Extension Center in Beaumont and Gene Reagan with the LSU AgCenter have teamed up to help farmers in both states combat the pest.

The collaborative research project began in 2000. According to Way, only a portion of the work has involved insecticides.

“The main research focus has been toward development of cultural and production practices, together with varietal resistance, to reduce pest problems with the Mexican rice borer,” Way said.

Another factor, which emphasizes integrated pest management, balances the use of diverse control tactics.

“If any single control tactic can be reduced, the selection pressure on the pest population is also reduced,” explained Way, “and this enhances the long-term success in controlling the pest.”

This system often includes biological controls to conserve beneficial insects, such as predators and parasites, which frequently contain pest populations below damaging levels.

The researchers also are seeking to develop a Mexican rice borer- resistant variety that would be less attractive to the adult female for egg-laying.

Researchers at the Texas A&M University System Research and Extension Center in Weslaco are conducting greenhouse studies to determine the insect's egg-laying preferences in certain varieties of rice and sugarcane.

Varieties of rice have been tested in the field to assess differences in stem borer resistance with respect to planting dates. Early research indicates that modifying the planting date may lessen the insect's impact.

The initial emphasis of collaborative studies on the Mexican rice borer was to determine the pest movement through Texas rice acres. In 2000, yield losses of more than 50 percent in treated and untreated experimental plots in Ganado underscored the seriousness of the problem.

With the help of Extension agents, farmers and the Texas Department of Agriculture, researchers have recorded insect movement into several Texas counties. For example, in Galveston County, 2,069 insects were collected in 2002, and 3,755 in 2003.

“Even though our trapping did not reveal any newly-infested counties in 2003, the increase in numbers can be interpreted as a signal that the pest continues to build populations and spread into new areas,” Way said.

As the Mexican rice borer spreads into new areas and new cropping systems, multi-state interdisciplinary collaborative work will become more important.

Since its inception in 2000, the collaborative effort between Way and Reagan has brought in more than $500,000 in national funding through the U.S. Department of Agriculture Cooperative State Research, Education and Extension Service.

“This stem borer respects neither commodity nor political boundaries,” Way said, “and successful management of the pest must emphasize an area-wide approach. To provide the greatest benefit to our producers, we want to develop and implement practices that not only protect the host crops, but also reduce pest populations throughout the region.”


Jay Cockrell writes for the Texas A&M University System Agricultural Research and Extension Center.