The Latest

Rice Outlook: Smaller Production to Tighten Global Supplies

Ernst Undesser
From USDA February 12, 2016

Rice Outlook: Smaller Production to Tighten Global Supplies

There were no changes this month to the U.S. 2015/16 rice supply and use balance sheet. Total supplies are projected to contract 5 percent due to a smaller crop and weaker imports. A decrease in domestic and residual use is projected to more than offset a slight increase in exports, pulling total use down 3 percent. With supplies dropping faster than use, ending stocks are projected to decline 14 percent from 2014/15 to 41.9 million cwt.

The 2015/16 season-average price forecasts for both U.S. long-grain and combined medium- and short-grain rice were lowered this month, primarily based on reported cash prices through December. The largest reduction was for the California medium- and short-grain season-average farm price.

 

Domestic Outlook

U.S. 2015/16 Rice Supplies Are Projected 5 Percent Smaller than a Year Earlier

There were no supply and use changes this month to the U.S. 2015/16 U.S. rice balance sheet. Total production remains estimated at 192.3 million cwt, 13 percent below a year earlier. Planted area remains estimated at 2.614 million acres, down 11.5 percent from a year earlier.

At 7,470 pounds per acre, the U.S. 2015/16 average yield is 106 pounds below a year earlier and is the smallest since 2012/13. Long-grain production remains estimated at 133.0 million cwt, 18 percent smaller than a year earlier. The combined medium- and short-grain production crop remains estimated at 59.3 million cwt, almost unchanged from a year earlier.

The all-rice carryin remains estimated at 48.5 million cwt, 52 percent above a year earlier. The long-grain carryin remains estimated at 26.5 million cwt, 63 percent above a year earlier and the highest since 2011/12. The medium- and short-grain 2015/16 carryin remains estimated at 20.2 million tons, 51 percent above a year earlier and the highest since 1987/88. Stocks of brokens are included in the total stocks estimate but are not listed by class.

U.S. rice imports in 2015/16 remain forecast at 24.0 million cwt, 3 percent below a year earlier. Through December 2015, U.S. imports of rice were 8 percent below a year earlier, with smaller purchases from Australia, Thailand, and Vietnam accounting for most of this year’s slower pace. In contrast, U.S. purchases from Brazil, India, and Pakistan were ahead of a year earlier. The bulk of U.S. purchases from Thailand–the largest supplier of rice to the United States–are jasmine rice. India and Pakistan sell basmati rice to the United States.

U.S. 2015/16 long-grain imports remain forecast at 20.5 million cwt, 3 percent below a year earlier. Thailand, India, Vietnam, and Pakistan provide the bulk of U.S. long-grain imports. U.S. 2015/16 medium- and short-grain imports remain forecast at 3.5 million cwt, up 1 percent from a year earlier.

The bulk of this rice is specialty rice from Thailand that is classified as medium- and short-grain. Italy supplies a much smaller amount of medium- and short-grain rice to the United States.

The 2015/16 total U.S. rice supply forecast remains at 264.9 million cwt, 5 percent below a year earlier. The 2015/16 long-grain total supply forecast remains estimated at 180.0 million cwt, 10 percent below a year earlier. The combined medium- and short-grain total supply forecast remains at 83.0 million cwt, up 8 percent from a year earlier and the highest since 1982/83. The buildup and high level of U.S. medium- and short-grain supplies are primarily due to a substantial increase in the carryin.

U.S. Domestic Use of Rice Projected To Be Smaller in 2015/16

Total use of U.S. rice in 2015/16 remains forecast at 223.0 million cwt, 3 percent below a year earlier. Long-grain total use remains forecast at 157.0 million cwt, 9.5 percent below a year earlier. Combined medium- and short-grain total use in 2015/16 remains forecast at 66.0 million cwt, 16.5 percent above a year earlier and the highest since 2011/12.

Total 2015/16 domestic and residual use remains projected at 121.0 million cwt, 7 percent below a year earlier. Long-grain 2015/16 domestic and residual use remains projected at 88.0 million cwt, 14 percent below a year earlier. The decline is primarily due to a smaller long-grain crop.

Combined medium- and short-grain domestic and residual use remains projected at 33.0 million cwt, 22 percent larger than a year earlier and the highest since 2007/08. The increase is primarily due to larger supplies.

U.S. rice exports in 2015/16 remain forecast at 102.0 million cwt, almost 2 percent larger than a year earlier. Through late January, U.S. commercial shipments were especially ahead of those a year earlier to Central America and Northeast Asia, but well behind those to the Middle East. Much of the increase in the shipments to Northeast Asia was the result of sales made in 2014/15 that were not shipped until early 2015/16.

By type, U.S. rough-rice exports remain projected at 35.0 million cwt, 3 percent above a year earlier. Latin America is the largest market for U.S. rough-rice exports, with the region taking almost exclusively long-grain rice. Turkey and Libya account for the bulk of U.S. medium- and short-grain rough-rice exports.

Combined milled and brown rice exports (on a milled basis) remain projected at 67.0 million cwt, 1 percent larger than a year earlier. Northeast Asia, Haiti, the Middle East, and Canada are the main markets for U.S. milled rice exports.

U.S. long-grain exports in 2015/16 remain projected at 69.0 million cwt, 2.5 percent smaller than a year earlier. Latin America is the largest market for U.S. long-grain exports, with the Middle East, Canada, Sub-Saharan Africa, and Europe taking much smaller amounts. Medium- and short-grain exports remain forecast at 33.0 million cwt, 12 percent above a year earlier. Northeast Asia is the largest market for U.S. medium- and short-grain exports.

Much of the year-to-year increase in medium- and short-grain rice exports is based on several large sales–mostly to Japan–made in 2014/15 but not shipped until the 2015/16 market year. The Middle East accounts for most of the remaining sales of U.S. medium- and short-grain rice, with Oceania buying smaller amounts.

Through January 28, combined commercial exports and outstanding sales of U.S. rice reported in the Foreign Agricultural Service’s weekly U.S. Export Sales of 2.10 million tons (product-weight basis) were 2.5 percent ahead of a year earlier. Exports of all-rice were reported at 1.64 million tons, up 9 percent from a year earlier. In contrast, outstanding sales of all-rice on January 28 of 457,100 tons were 16 percent smaller than a year earlier.

Combined outstanding sales and exports of U.S. long-grain rough-rice on January 28 were reported at 833,500 tons, unchanged from a year earlier. Exports of long-grain rough-rice were reported at 713,300 tons, up 13 percent from a year earlier. Outstanding sales of long-grain rough-rice on January 28 of 120,200 tons were 40 percent behind a year earlier.

Combined outstanding sales and commercial shipments of long-grain rough-rice were ahead of a year earlier to Guatemala, Honduras, Mexico, and Panama but behind a year earlier to Mexico and Venezuela.

In contrast, combined outstanding sales and exports of medium- and short-grain rough-rice on January 28 of 59,600 tons were 69 percent behind a year earlier. Exports of medium- and short-grain rough-rice on January 28 were reported at 58,100 tons, 40 percent behind a year earlier. Libya and Turkey account for nearly all of these shipments. Outstanding sales of medium- and short-grain rough-rice on January 28 of 1,500 tons–all to Mexico–were 99 percent below a year earlier.

For long-grain milled rice, combined outstanding sales and shipments through January 28 were reported at 553,700 tons, down 15 percent from a year earlier. Combined sales and shipments were behind a year earlier to Sub-Saharan Africa and Colombia, but ahead of a year earlier to Haiti. Exports of U.S. long-grain milled rice on January 28 were reported at 473,300 tons, 7 percent behind last year. Outstanding sales of long-grain milled rice on January 28 of 80,400 tons were 43 percent behind a year ago.

Combined outstanding sales of medium- and short-grain milled rice on January 28 were reported at 555,400 tons, up 61 percent from a year earlier. Japan accounts for the bulk of this year’s faster pace of sales and shipments. U.S. exports of medium- and short-grain rice on January 28 were reported at 344,800 tons, up 37 percent from a year earlier.

Outstanding sales of medium- and short-grain rice on January 28 of 210,600 tons were 125 percent larger than a year earlier, with Japan accounting for most of the faster pace of sales.

The U.S. ending stocks forecast remains at 41.9 million cwt, 14 percent below a year earlier. The 2015/16 stocks-to-use ratio remains estimated at 18.8 percent, down from 21.1 percent a year earlier. U.S. 2015/16 long-grain ending stocks remain forecast at 23.0 million cwt, down 13 percent from a year earlier.

The long-grain 2015/16 stocks-to-use ratio remains estimated at 14.6 percent, down from 15.2 percent a year earlier. Combined medium- and short-grain ending stocks remain forecast at 17.0 million cwt, 16 percent below the year-earlier 28-year high.

The decline in medium- and short-grain ending stocks in 2015/16 is the result of expanded use more than offsetting a larger carryin. The medium- and short-grain stocks-to-use ratio remains forecast at 25.7 percent, well below the abnormally high 35.6 percent estimated for 2014/15.

Season-Average Farm Price Forecasts for 2015/16 Lowered Again for Both Classes of Rice

The 2015/16 season-average farm price (SAFP) for U.S. long-grain rice is projected at $11.00-$11.60 per cwt, down 40 cents on the high end from last month’s forecast and with the midpoint lowered 20 cents. The midpoint is below the 2014/15 SAFP of $11.90. The 2015/16 U.S. medium- and short-grain SAFP is projected at $16.10-$16.90, down 70 cents on the high end and down 50 cents on the low end from last month’s forecast.

The midpoint of the 2015/16 U.S. medium- and short-grain SAFP of $16.50 is well below the revised 2014/15 SAFP of $18.30 per cwt. Both downward revisions were primarily based on reported cash prices through December and expectations regarding prices the remainder of the year.

By region, the California 2015/16 medium- and short-grain SAFP is projected at $19.00-$20.00 per cwt, down $1.00 on both the high and low ends. This compares with a revised $21.60 SAFP in 2014/15.

In the South, the 2015/16 medium- and short-grain SAFP is projected at $11.70-$12.30 per cwt, with the range tightened 20 cents on both ends from last month’s forecast. The midpoint of $12.00 per cwt is $2.40 below the 2014/15 SAFP of $14.40. In addition to a larger 2015/16 crop, exports of southern medium- and short-grain rice have been weak this year.

The Middle East and Northern Africa account for almost all southern medium- and short-grain exports. The 2015/16 all-rice SAFP is projected at $12.50-$13.30 per cwt, down 40 cents on the high end and down 20 cents on the low end from the previous forecast. This compares with a revised $13.40 a year earlier.

In late December, the National Agricultural Statistics Service (NASS) reported a December U.S. long-grain rough-rice cash price of $11.40 per cwt, down 10 cents from November but up $1.00 from August. Virtually all U.S. long-grain rice is grown in the South. For U.S. combined medium- and short-grain rice, the December NASS price was reported at $16.20 per cwt, up 70 cents from the November price but down $2.00 from August.

By region, the California December medium- and short-grain rough-rice price was reported at $18.90 per cwt, up 30 cents from a month earlier but down $1.30 from the start of the California market year in October.

The December 2015 Southern medium- and short-grain rough-rice price is reported at $11.80 per cwt, down 10 cents from November and the lowest since NASS began reporting monthly medium- and short-grain prices by region in August 2013. U.S. growers expanded Southern medium-grain area in both 2014/15 and 2015/16, largely a response to higher price expectations resulting from declining production in California.

Full report.

Ernst Undesser
From USDA February 12, 2016