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For U.S. rice growers: Farm bill details top concern

The biggest concerns for rice producers and others attending the 2007 USA Rice Outlook Conference in Orlando in early December was what a new farm bill would look like and whether or not it would be in place by the time they're deciding on their crop mix for 2008.

Tunica, Miss., rice producer Nolen Canon was sure of one thing. “Southern agriculture is really getting picked on in this farm bill. I read a lot of press, and about 95 percent of it is negative about Southern agriculture. A lot of them don't understand what it takes, and that most of that money from subsidy programs is not going straight into a savings account.

“If they extend this farm bill debate into next year, I could have my crop planted and realize that my crop plan is no good. There is still a tremendous amount of work to go on in the FSA offices to get reorganized.

“Right now the battle for acres is upon us,” said Canon. “If it was tomorrow, I'd be pretty close to planting the same number of acres I planted last year. The price of a commodity might influence it a little bit, but in our area, we are down to the situation where the dedicated rice producers are back in their normal rotation. The non-dedicated rice farmers are going to corn, sorghum and wheat a lot quicker than they're coming back to rice.”

While rice producers have benefited from very good rice prices, those prices are needed to cover high costs of production, not only in the United States, but around the world. “The new plateau of rice prices is going to have to stay there in order to be an incentive to produce. You can't grow rice at a loss for very long.”

Costs for fuel and fertilizer comprised the biggest increases in costs for Canon over the last couple of years. “Last year, those costs were just sucking the life out of farmers. I talked to more people last year who were in the red after a pretty decent year than I've talked to since I've been farming. They made good crops and lost money.”

Canon said that he's produced excellent rice yields the last couple of years. In 2007, “a good planting season allowed rice to be planted early in April. Most of the rice had already flowered before the extremely high temperatures hit in August. Then we had an almost perfect harvest season in late August and September. And some of our hybrids have come in with some tremendous yields.

Hybrids are raising the bar for yield, according to Canon, who plants between a fourth and a third of his rice to them.

According to Jim Thompson, director of seed marketing for RiceTec, which develops and markets hybrid rice, some farmers are breaking the 200-250 bushel per acre threshold with hybrids on some fields. Because of their potential, marketshare for hybrids has doubled almost every year since 2003.

“In 2007, the percentage of hybrid rice planted ranged from 13 percent to 25 percent in the strongest state. There are some growers who have gone to 100 percent hybrid rice.”

Thompson said individual RiceTec growers produced as much as 250 bushels this season, dry weight. “Although those are exceptions, it's great to hear them, so you can know what the topside potential is. Yields have reached as high as 300 bushels per acre in ratoon areas, when the first and second crops are combined.”

Thompson said while yield is a top criteria for hybrids, the company is working on standability improvement and milling improvement. “We received a report recently from a large grain buyer and miller that indicates that each of our large acreage hybrids have had a milling yield above the average of all long grains milled for the year, including both varieties and hybrids.”

L.G. Raun, El Campo, Texas, was “a little disappointed” in his 2007 rice crop. “Yields were off from the year before, but we had good yields in 2006. But it was still an average year.”

Statewide, Texas rice yields could be as much as 10 percent lower than average due to wet weather along the Gulf Coast, according to Raun. “But we had problems with cotton, milo and rice, too. We had 20 inches of rain in July alone. That's normally our driest month, but the rains that really hurt the rice came in May and June.”

For Raun, the excessive rain reduced pumping costs for water from $100 to $60 per acre, but the decrease in yield far from offset the savings from reduced pumping. On the other hand, rice prices “are the highest we've had in 15-20 years, and that will hopefully help us keep with increased costs. Fertilizer, machinery, steel, diesel costs are really unbelievable.”

In the international markets, Raun says the rice industry “has turned it around on the GE issue. We're starting to move some rice into the EU. As world stocks of rice have gone down and continue to go down, perhaps that's having an impact on buying habits. And we're seeing not only U.S. prices come up, but world prices as well. So we're very optimistic on rice.”

Raun is concerned about the farm bill debate. Texas producers “would have increased acres for 2008 at today's rice prices, if we had a farm bill in place today. Without the farm bill in place and not knowing what the payment limits and adjusted gross income figures are going to be, farmers aren't going to add more risk by adding acres. So I think rice acres will be about the same here as they were in 2007.”

Raun says Texas farmers “need to have a farm bill in place by January at the latest to influence an increase in rice acres. We're also limited on rice seed. The GE event put some limitations on the market.”

Fred Zaunbrecher, Duson, La., and brothers Phillip, Paul and Bill, had some of their best rice yields ever in 2007, planting all conventional rice varieties on 2,100 acres. “We couldn't get the hybrids to yield any better than our Cypress, Cheniere or Cocodrie, and the milling is more consistent with the conventional varieties. To us, it wasn't worth the extra cost of the seed.”

Zaunbrecher said the prospect of prices moving higher during the season was dampened considerably by higher diesel and urea costs. “It gets you to thinking about what next year is going to cost. Last year, we averaged paying $380 a ton for urea. A week ago, I booked urea for $450 a ton, to hedge against it going higher. We started paying $2 a gallon for diesel at the start of last season and ended up paying $3 at the end of the season.

“Everything is going up and you hope that one season it's going to stabilize. We're thankful for the good crop. The markets are treating us right, but unfortunately, it's going to take a good crop and a good market just to pay the bills. We're going to do alright this year, but it would be nice if we could do great for a year or two.”

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