Marketing and efficiency survival skills for rice farmers

Last year, Arkansas farmers harvested a record 1.635 million acres of rice, a new state record. The statewide average yield was second best ever. But that was last year.

Soaring fuel and fertilizer prices will reduce Arkansas rice acreage in 2006. How much is anybody's guess, but Chuck Wilson, University of Arkansas Extension rice specialist, is estimating 10 to 15 percent based on the market price for rice.

“There will be a few less farmers, and the acreage will go down,” he said. “I've heard predictions ranging from a 7 percent to a 25 percent reduction in acreage. If you had asked me in September, I would have said we're going to lose 20 or 25 percent of our acreage because of price. The thing that has changed is that the price began going up in January.”

Wilson said the biggest questions on farmers' minds are how to make ends meet, how to make their farms cash flow and where to cut costs and expenses.

He said it's critical that farmers do as good a job as possible managing crop inputs. This includes managing fertilizer for maximum benefits.

“Growers need to be scouting for diseases and spraying when needed rather than making blanket applications,” he said.

Farmers can cut back by reducing seeding rates some, using plastic tubing to increase irrigation efficiency and leveling fields, he advised.

Before applying fertilizer, make sure you do a good job of soil sampling and put the fertilizer only where it's needed, he said. When applying pre-flood nitrogen fertilizer, put it on dry soil and flood it as quickly as possible, he advised. Use Agrotain on fields that require more than three days to flood.

Wilson also recommends using multiple-inlet irrigation. “We're using it on probably 25 percent of the rice acreage already,” he said. “It increases efficiency and reduces water use and pumping time. It can be a real benefit, especially in a drought situation.”

The specialist said the Extension service has been recommending the most economical methods to produce a crop for years.

“These are things producers have all heard. It's just that now, more than ever before, is the time when they really have to apply these recommendations.

“When it's all said and done, I still think the best way to make a sizeable difference is by marketing.

“If I sell my rice in September, I get $3 or $3.30 a bushel. If I sell it now, with the market up, I can hedge and book and sell it at about $4 a bushel.”

At $3.30 a bushel, farmers need to average 170 bushels an acre to break even, if they have silt-loam soil and a 75/25 percent crop-share rent. “The state average is 148, so most farmers won't average 170,” he said.

At $4 a bushel, farmers can break even at 135 to 140 bushels an acre, which is a much more achievable yield.

“Marketing is the key. Farmers need to spend time watching the markets.

“They know what their farm averages are and what they're capable of producing. They have a history of what it costs to produce a crop.

“So it becomes a question of what price they need to receive to make money. When the market gets to that price, they should start thinking about booking some of that crop.”

Lamar James is an Extension communications specialist with the University of Arkansas.

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