Arkansas growers could plant nearly 1.5 million acres of rice in 2014 if more normal weather conditions return and corn and soybean prices and production costs continue to soften over the next three or four months.
If that forecast pans out, U.S. rice acreage could rise by about 400,000 acres to 2.8 million in the coming year because of the dominant position Arkansas occupies in the Southern Rice Belt and in total U.S. rice plantings, according to speakers at the USA Rice Outlook Conference in St. Louis.
“Corn prices are currently basing, and the basing process is likely to continue beyond most planting decisions,” said Robert Coats, Extension economist and professor — economics with the University of Arkansas. Coats, who gave the state outlook report for Arkansas, was referring to a chart showing monthly corn futures prices dating back to 1970.
Coats said old crop corn prices are likely to remain volatile with the potential of moving back to $6 per bushel. “It’s more likely that prices will go lower before moving higher and that the new crop year marketing range will be between $3.50 and $6.00 per bushel.”
Soybean prices are also likely to move lower before moving higher in the coming months, with new crop soybeans possibly trading in a range between $10 and $16 per hundredweight.
Higher corn and soybean prices over the last five seasons have led to dramatic shifts in Mid-South crop acreage out of cotton and rice to corn and, to a lesser extent, soybeans. At this time last year, corn was selling for more than $7 per bushel due to the 1012 drought in the Midwest.
Arkansas growers finished with a harvested rice acreage of 1.07 million in 2013. Not all of that was due to high corn prices. An unusually wet spring resulted in more than 300,000 acres either failed or prevented from being planted. Under more normal conditions, Arkansas could have planted 1.358 million acres of rice, Coats said.
Given the demand outlook for higher quality rice, lower corn futures and lower fertilizer and fuel costs, Arkansas growers could plant 1.319 million acres of long grain rice and 133,000 acres of medium grain in 2014. That would be up 412,000 acres or 36 percent above 2013.
“The U.S. rice industry cannot be competitive in the global low quality rice market,” says Coats, “but can compete in the high quality market through rice identity preservation. Producing rice with world class physical and chemical grain properties and priced accordingly — this is needed to turn the U.S. rice industry to a growth industry.”
Despite the unusual weather conditions that delayed and prevented planting, Arkansas farmers produced record rice yields in 2013 with an estimated state average of 7,550 pounds per acre. That would be 80 pounds per acre or about 1 percent more than in 2012 and 780 pounds or 10 percent more than in 2011.
Louisiana growers also produced record yields in 2013, harvesting an estimated statewide yield average of 7,200 pounds per acre. That would be up from the previous high of 6,600 pounds.
“We think we have set a real, significant record in Louisiana this year,” said Johnny Saichuk, Extension rice specialist with the LSU AgCenter. “From the conversations we’ve had with our farmers we think we may be around 7,200, second crop included, well above anything before.”
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Louisiana’s second crop acreage also expanded,” he said. “We had over 130,000 acres of second crop rice, which is one of our highest totals in a number of years. Someone asked me if we were through harvesting for the year, and I don’t know. I do know we cut our last verification field on Nov. 30, the latest we’ve ever done.”
Saichuk said he believes Louisiana’s rice acreage will be about the same in 2014 as it was in 2013 with the possible exception of an increase in hybrid rice, which appears to be gaining ground in Louisiana because of its higher yield potential.
Another development he reported at the Rice Outlook Conference was the growth in special purpose rice in 2013. Louisiana growers harvested 30,000 acres, most of it the Jazzman 2 line of aromatic rice. Growers also planted the Jazzman, Sabine and Hidalgo varieties.
Mississippi’s rice acreage could recover to about 200,000 in 2014 because of a projected decline in fertilizer and fuel prices and rice prices becoming more competitive with those offered for corn and soybeans.
“We’re seeing a much more favorable price outlook for rice compared to corn and soybeans than what we’ve seen in the last several years,” said Larry Falconer, Extension agricultural economist with Mississippi State University.
“Of course, prices are only part of the equation. When you look at cost of production estimates, our fertilizer estimates are down about $30 an acre and $7 or $8 for diesel fuel for pumping costs. With rice yields 6 percent to 7 percent higher this year, it looks like rice could be much more competitive than with the cost projections we were using last year.
“Based on decreases in fertilizer and fuel costs and the futures prices we have now and talking to Dr. (Tim) Walker, Extension rice specialist with Mississippi State, and to producers, we think it’s possible rice acres could recover back to the 200,000 mark that we saw prior to the last two or three years (from 2013’s 130,000 acres).”
Missouri’s rice acres are “expected to be level to slightly higher” in 2014, according to Trent Haggard, director of the University of Missouri’s Fisher Delta Research Center in Portageville, Mo.
Missouri farmers also struggled with weather delays during planting and harvesting, finally finishing with an estimated 150,000 harvested acres of rice for 2013. “On Oct. 5, we were only 50 percent harvested,” said Haggard. “That is unusually late for our growers.”
Over the years, the trend-line for yield increases in the Missouri Bootheel has been 62 pounds per acre. Farmers will probably average 6,950 pounds per acre in 2013 or only a little above 2012. “We probably will fall short of that 62-pound per acre trend line in 2013 because of all the weather problems we encountered in 2013.”
Growers in Texas did not experience the planting delays those in the Mid-South did, but they were impacted by weather. And the situation shows little sign of improving.
A few days before the Rice Outlook Conference, the Lower Colorado River Authority, the agency which oversees the delivery of water from reservoirs around Austin, Texas, to the Texas Rice Belt announced new regulations.
Texas producers planted about 130,000 acres of rice in 2012 and 2013, down 170,000 acres from their peak, because of the reduced water allocations for rice. The new regulation, which lowers the trigger for release of water to the rice area to 850,000 acre feet, could mean even less water.
“The outlook for rice in Texas is rather dim for 2014,” said Mo Way, Extension entomologist with the Texas A&M University Rice Research Station in Beaumont, Texas.
Water availability could also be an issue in California, according to Chris Greer, Extension advisor with the University of California. 2013’s harvested acreage was almost the same as 2012, 556,000 acres. 2014 could be from 450,000 to 550,000 depending on water availability.
“It’s obvious water is important to all of us, whether in California or Texas or Mississippi,” he said. “Basically, the state of California is not in a great shape for water. Looking to 2014, we’re going to have to cross our fingers and hope we get something.
“I realize 450,000 to 550,000 acres is a broad range, but we don’t know how much snow we may get so we don’t know what we’re going to be looking at as far as water allocations. We could have water sales. If rice prices are low, farmers may decide it’s more attractive to sell their water than to plant rice.”