(05/07/20) CROWLEY, La. — Rice prices have rebounded, and the Louisiana 2020 crop is off to a good start.
LSU AgCenter economist Michael Deliberto said there are several reasons why the economic outlook for rice is positive.
“There is no doubt that supplies are tight and demand has been good. These are the highest U.S. prices in at least seven years,” he said.
AgCenter rice specialist Dustin Harrell said the south Louisiana rice crop is doing well.
“This year’s rice crop has had a tremendous start,” he said.
Early planted rice benefitted from a warm March, with the average March temperature 10 degrees higher than usual.
Rice has bounced back after a few cold days in April. Some areas have reported outbreaks of chinch bugs, but most of the crop has avoided any major challenges, Harrell said.
“It’s one of the best starts I’ve seen in a long time,” he said.
Heavy rainfall has interfered with planting in north Louisiana and Arkansas.
July rice is selling for roughly $23 a barrel, and September rice was priced north of $19 a barrel, which is 162 pounds.
“I think that number could go higher,” Deliberto said.
U.S. long-grain milled rice prices are currently being supported by continued large sales to Haiti, expectations of much tighter U.S. supplies later this market year and higher and rising global trading prices.
“Given the uncertainty of the pandemic, it’s hard to say just how high prices will go. Asian exporters are starting to relax some of the export restrictions,” Deliberto said.
Total rice acreage could affect pricing. Lower prices could be coming with an acreage shift in Arkansas, the largest rice-producing state, from soybeans to rice that exceeds projections.
“That’s why that June acreage report will be important for the market,” he said.
Rice planting has increased over last year, with Arkansas accounting for 78% of the projected 307,000-acre total U.S. expansion. Estimates have been made that Arkansas will have almost 1.4 million acres in rice, 21% higher than a year earlier.
Rice growers in Louisiana indicated in March they would expand total rice plantings more than 1% to 430,000 acres, with long-grain varieties accounting for all the 2020 intended expansion, Deliberto said. Louisiana’s medium-grain intended planting of 40,000 acres is down by 15,000 acres from 2019.
Ending stocks are down considerably. Long-grain ending stocks are 58% below last year, the lowest since 2003-2004.
“From market reports, there appears to be very little of old crop supplies left unsold. Attention now shifts to new crop dynamics from a marketing perspective,” Deliberto said.
U.S. exports are up. Through February 2020, U.S. exports of long-grain rice totaled 41.5 million hundredweight, up 11.5% from a year earlier, with U.S. shipments well ahead of last year to Colombia, Guatemala, Haiti, Mexico, Nicaragua and Venezuela, he said. Latin America is projected to remain the top market for U.S. long-grain rice in 2019, with most of its purchases for rough, unprocessed rice.
At the same time, export restrictions recently announced by some Southeast Asian countries and the effect of lockdown policies in numerous countries amid the COVID-19 pandemic have tightened the global rice market.
“Most notable among the rice export bans is Vietnam, the third-largest global exporter since 2013,” Deliberto said.
But he said Vietnam trade officials have started to relax export restrictions.