U.S. rice acreage could drop 10 percent in 2003

The specialists, speaking at the annual Valent Rice Seminar, said low prices will be the major driving force behind the potential drop from 3.2 million to 2.86 million acres this spring, but the 2002 farm bill – and water availability in California – will also play a role.

The biggest percentage decline could occur in Louisiana where growers have been shaken by a combination of adversities that include a “Catch 22-like” wrinkle in the new farm bill and a lack of any meaningful help from the recently passed federal disaster assistance legislation.

“I think we could go down about 100,000 acres,” said Johnny Saichuk, Extension rice specialist with the LSU AgCenter’s Rice Research Station in Crowley, La. “Unfortunately, that’s 20 percent of our acres. I’m hearing everything from 15 percent down to 40 percent because of the economic conditions, but I feel it will be around 100,000.”

The last 12 months have not been kind to Louisiana rice growers, according to Saichuk.

“We had probably one of the best second crops ever, and it was ruined,” he said, referring to the hurricane (Lili) and tropical storm (Isidore) that destroyed much of the ratoon or second harvest rice along the Louisiana Gulf Coast in October.

As details began to emerge about last year’s farm bill, Louisiana farmers received another blow, he said. Many could not take advantage of the long-sought opportunity to update their program yields because they had not fully planted their rice acreage base under Freedom to Farm.

Meanwhile, growers have also lost the premium they often received from the average world price calculations and loan deficiency payments along with the decrease in domestic rice prices.

“Our growers have gradually increased their yields, but the price has taken a nose dive down to $3.85 to $4 per hundredweight,” says Saichuk. “In our Rice Research Verification Program, we started out with growers receiving $280 over variable costs a couple of years ago, and we’re down to $30 over variable costs.”

He said some farmers in northeast Louisiana have indicated they will plant “a little rice to keep their acreage base up. But that is where most of the change will occur with many of those growers switching to corn.

“We’re not sure what growers in south Louisiana will do because of the lack of alternatives. They’ve tried soybeans, wheat and milo with little success. Some who left their fences up may go back to cattle because that’s about all they have.”

Despite the total loss of their ratoon crop in 2002, many Louisiana growers won’t meet the 35 percent qualifying threshold in the new Agricultural Assistance Act of 2003, he noted. “We’re still hoping for an economic emergency assistance package.”

Arkansas could see a decline of 105,000 acres, or 7 percent of the state’s 1.5 million acres, says Chuck Wilson, Extension agronomist for rice with the University of Arkansas Division of Agriculture.

“I think our overall acreage will go down – maybe 7 percent or a little over 100,000 acres,” he said. “A lot of it will have to do with the choices in the farm bill and the $1.50 per bushel rice.

“Other factors dictate that we will still have a substantial amount of rice – landlords may insist on it, we have substantial investments in the rice infrastructure. I don’t think we will take as big a hit as what I’ve heard in recent weeks.”

Wilson said Arkansas farmers will probably benefit more from the new farm bill than Louisiana growers. “Ten years ago, we had 1.2 million to 1.3 million acres of rice, and we were up to 1.6 million in 2001. The farm bill gives us the ability to increase base, and I know our yields have gone up.”

Mississippi growers could decrease their rice acres by 10 to 15 percent or 25,000 to 38,000 acres from 2002’s 255,000, said Joe Street, rice specialist with the Delta Research and Extension Center at Stoneville, Miss.

“I’m closer to 15 percent today because of the price outlook, which isn’t good,” he noted. “I have some growers who tell me they’re planning to cut back because they can’t make it on rice and others who say they’re planning to double their acres.”

Street said Mississippi farmers appeared to be headed for record yields prior to the hurricane and tropical storm that moved through Louisiana and Mississippi last fall.

“One grower who got his rice out before Isidore hit averaged 186 bushels of rice across his whole farm,” he noted. “Those who only had 70 to 80 percent out lost a considerable amount of rice. A lot of acres went underwater; a lot stayed on the ground 30 days. What we thought was a bumper crop didn’t turn out to be.”

Street said the hope of higher soybean prices is putting pressure on rice acres in Mississippi, although some area buyers are offering contracts with premiums for certain types of rice. “This is encouraging and may help stabilize acreage,” he said.

Missouri growers, who missed both the hurricane and the tropical storm last fall, harvested a record average yield of 6,050 pounds per acre in 2002, said Bruce Beck, an agronomy specialist with the University of Missouri Extension Service in Poplar Bluff.

But the higher yields weren’t enough to offset low prices, and Beck expects farmers could plant 10 percent fewer acres of rice from last year’s 200,000 “as an emotional reaction to prices.”

Beck thinks most of those acres could go into cotton because of the stronger prices for the latter in recent weeks. But some of it could go to corn.

Farmers in the Texas Rice Belt could plant 10 percent fewer acres from 2002’s 206,000, in part, because their options are narrowing as rains continue to pound the Gulf Coast area.

“Corn planting time is already behind us, and rice planting time will be behind us if it doesn’t stop raining soon,” said Arlen Klosterboer, retired Extension specialist with Texas A&M University in Beaumont. “I think we could be down 10 percent. Some say it could down more, but, as of today, I think it could be 10 percent.

“A lot of farmers were unable to get in their fields to fix them back up last fall, so they can’t use stale seedbeds even if they wanted to,” he noted. “That’s another factor contributing to the acreage reduction.”

The new counter-cyclical payment in the farm bill could also have an impact, he said. Up to 78 percent of Texas rice farmers lease their land, and landlords are catching on to the new program. Some haven’t decided if they will let their growers plant rice or collect their $135,000 check and walk away from it.”

California growers could also plant 10 percent fewer acres in 2003 due to the prices of competing crops and uncertainty over water supplies, said David Cheetham, weed scientist with the University of California, based in Davis.

Such a decline would drop California’s rice acreage from 540,000 to under 490,000 in the Sacramento Valley where most of the state’s rice is planted. “Wheat prices and acreage are expected to be up and safflower prices are likely to attract some acres,” said Cheetham. “But water may be the deciding factor.”

Water supplies reportedly are highly variable in California this winter, he noted. “The snow pack is up in the northern part of the state where most of the rice is grown, but supplies are down in Southern California.”

The result is that up to 200,000 acre feet of water – enough for about 60,000 acres of rice – could be transferred to Los Angeles as part of an arrangement that would bring farmers about $100 per acre foot for their water.

“That’s why the rice acreage is so uncertain,” said Cheetham. “No one is sure about the impact of water transfers on the state’s plantings.”

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