This month, USDA fractionally lowered its 2017/18 U.S. rice production forecast to 178.4 million cwt due to a smaller yield. The crop reduction was offset by a higher long-grain import forecast, with total supplies nearly unchanged from the previous forecast.
On the use side, exports were lowered 2.0 million cwt to 104.0 million cwt, with rough-rice accounting for all of the decline. These revisions boosted the 2017/18 U.S. ending stocks forecast 2.1 million cwt to 29.9 million cwt. Season-average price forecasts for 2017/18 were lowered for both U.S. long-grain rice and southern medium- and short-grain rice.
U.S. 2017/18 Rice Crop Forecast Lowered Slightly; Import Forecast Increased
There were two nearly offsetting 2017/18 U.S. rice supply-side revisions this month. First, the 20017/18 U.S. rice crop forecast was lowered 0.2 million cwt to 178.4 million cwt, down 20 percent from a year earlier. The downward revision was due to a lower yield.
At 7,461 pounds per acre, the 2017/18 average field yield is 9 pounds below the October forecast but 3 percent larger than a year earlier. Harvested area remains estimated at 2.39 million acres, 23 percent below a year earlier and the lowest since 1987/88.
By class, the 2017/18 U.S. long-grain production forecast was lowered 144,000 cwt to 126.1 million cwt, a 24-percent decline from a year earlier and the smallest since 2011/12. The 2017/18 U.S. medium- and short-grain production forecast was lowered 60,000 cwt to 52.24 million cwt, down 9 percent from a year earlier and the smallest since 2008/09.
This month, USDA’s National Agricultural Statistics Service lowered its 2017/18 yield estimates in Louisiana and Texas, but raised its yield estimates in Arkansas and Missouri. For Texas, this is the second consecutive month for a yield reduction. At 6,300 pounds per acre, the Texas yield is down 500 pounds from the October estimate, down 700 pounds from the September estimate and 14 percent below a year earlier.
This is the lowest yield for Texas since 1999/2000. In late August, Hurricane Harvey struck much of the Texas rice growing areas. Although almost all of the Texas main rice crop was already harvested, many growers in the Texas Rice Belt also harvest a second crop, the ratoon crop, from the stubble remaining in the field of the first crop harvest. This additional rice production is included in the average yield.
Field conditions, input costs, and rice prices are the main factors behind the decision to harvest or not harvest a ratoon crop. Field conditions after the main crop harvest impact the ratoon crop yield as well.
Around half the growers in Southwest Louisiana will typically harvest a ratoon crop if prices and field conditions are favorable. This year, growers in Southwest Louisiana received heavy rainfall in August from Hurricane Harvey.
Much as with Texas, the bulk of the main crop was already harvested in Southwest Louisiana prior to Harvey’s arrival. Louisiana’s 2017/18 yield was lowered 100 pounds per acre to 6,900 pounds, up 4 percent from a year earlier. Missouri’s 2017/18 yield was raised 300 pounds to a record 7,400 pounds, up 11 percent from a year earlier.
The Arkansas 2017/18 yield was raised 50 pounds per acre to 7,400 pounds, 7 percent above a year earlier. In 2016/17, adverse weather reduced yields in both Arkansas and Missouri.
In contrast to the 2017/18 production forecast, the U.S. 2017/18 import forecast was raised 0.3 million cwt to 24.5 million cwt, up 4 percent from a year earlier and the highest on record. The upward revision was based on U.S. Census Bureau reported imports for August and September.
Long-grain accounted for all of the upward revision in U.S. imports. At a near-record 21.3 million cwt, U.S. 2017/18 long-grain rice imports are up 0.3 million cwt from the previous forecast and 5 percent larger than a year earlier. Medium- and short-grain imports remain forecast at 3.2 million cwt, nearly unchanged from a year earlier.
Through September 2017, U.S, imports of all rice on an actual shipment weight basis were 19 percent above a year earlier. At 68,116 tons, U.S. rice imports in September were the highest since March 2017 and the fourth consecutive month of increasing imports. Aromatics account for nearly all of the year-to-year increase through September.
Thailand, the largest supplier of U.S. rice imports, shipped 86,306 tons of rice to the U.S. through September 2017, up 24.5 percent from a year earlier. Nearly all of these imports were Thailand’s premium jasmine rice. India, typically the second largest U.S. supplier, shipped 33,047 tons of rice to the U.S. through September 2017, up 37 percent from a year ago.
The bulk of U.S. rice purchases from India are its premium basmati rice. Both aromatics are classified as long-grain. In contrast to the aromatic imports, U.S. imports of broken kernel rice through September 2017 were just 1,552 tons, 500 tons below a year earlier and the lowest since 2005/06.
U.S. 2017/18 Export Forecast Lowered 2.0 Million Cwt to 104 Million Cwt
A slow pace of shipments and sales through late October and expectations regarding sales and shipments the rest of the market year resulted in a 2-million cwt reduction in the 2017/18 U.S. all-rice export forecast to 104.0 million cwt. This is down 11 percent from a year ago, with both the long-grain and the medium- and short-grain export forecasts each lowered 1.0 million cwt.
At 74.0 million cwt, U.S. long-grain exports are forecast 6 percent below a year earlier. Based on U.S. Census trade data through September and shipment data from the weekly U.S. Export Sales report, U.S. exports of long-grain rice were well behind a year earlier to Central America, South America, and the Middle East.
In contrast, U.S. long-grain shipments to Mexico and Haiti were ahead of a year earlier. Shipments to Sub-Saharan Africa were also up slightly, but the volume remains very low.
U.S. medium- and short-grain exports are projected at 30.0 million cwt, 21 percent below a year earlier. U.S. shipments through late October were well behind a year earlier to both Northeast Asia and the Mediterranean, which together account for the bulk of U.S. medium- and short-grain rice exports.
While the U.S. is expected to achieve its typical level of World Trade Organization sales to Japan, South Korea, and Taiwan, U.S. sales to the Mediterranean are expected to be lower this year.
By type, U.S. rough-rice exports are projected at 38.0 million cwt, down 2.0 million cwt from the previous forecast and 11 percent below a year earlier. U.S. sales to South America, nearly all long-grain, and sales to North Africa, nearly all medium- and short-grain, are well behind a year earlier.
Milled rice exports (brown- and milled-rice exports on a rough-rice basis) remain projected at 66.0 million cwt, also 11 percent below a year earlier. The U.S. continues to face competition in the milled-rice market in both Sub-Saharan Africa and the Middle East. In addition, South American exporters have been increasing sales to U.S. milled rice markets in Latin America.
Total domestic and residual use of U.S. rice in 2017/18 remains projected at 115.0 million cwt, 12.5 percent smaller than a year earlier. The year-to-year decline in domestic and residual use is also largely driven by projections for a smaller crop and by higher prices.
Long-grain domestic and residual use remains projected at 88.0 million cwt, 12 percent below 2016/17. Medium- and short-grain domestic use remains projected at 27.0 million cwt, 15 percent below a year earlier and the lowest since 1988/89.
U.S. all-rice 2017/18 ending stocks are projected at 29.9 million cwt, up 2.1 million cwt from the previous forecast but 35 percent below a year earlier and the smallest since 2007/08. The ending stocks-to-use ratio is projected at 13.7 percent, down from 18.6 percent a year earlier.
Long-grain ending stocks are forecast at 16.5 million cwt, up 1.2 million cwt from the previous forecast but 47 percent below a year earlier. The long-grain stocks-to-use ratio is forecast at 10.2 percent, down from 17.4 percent a year earlier. Medium- and short-grain ending stocks are forecast at 9.9 million cwt, up 0.94 million cwt from the previous forecast but 14 percent below a year earlier.
These are the smallest U.S. medium- and short-grain stocks since 2008/09. The medium- and short-grain stocks-to-use ratio is forecast at 17.4 percent, up from 16.5 percent in 2016/17.
U.S. 2017/18 Long-Grain and Southern Medium- and Short-grain Season-Average Farm Prices Lowered
This month, USDA lowered its 2017/18 U.S. season-average farm price (SAFP) for both long-grain rice and for southern medium- and short-grain rice. In addition, NASS made small revisions for the 2016/17 SAFPs for both classes of rice in both regions.
The 2017/18 revisions were largely based on reported monthly cash prices and marketings through September and expectations regarding prices and marketings the remainder of the market year. The 2017/18 long-grain SAFP is projected at $11.80-$12.80 per cwt, down 20 cents on both ends of the forecast range from last month but well above the revised $9.64 in 2016/17.
The Southern medium- and short-grain 2017/18 SAFP is forecast at $12.00-$13.00 per cwt, also down 20 cents on both ends of the range from the previous forecast but up from a revised $10.10 in 2016/17. The California medium- and short-grain 2017/18 SAFP remains forecast at $15.50-$16.50, up from a revised $13.70 in 2016/17.
The 2017/18 U.S. medium- and short-grain SAFP is forecast at $14.60-$15.60 per cwt, down 10 cents on both ends of the forecast range from last month but above a revised $12.90 in 2016/17. The 2017/18 all rice SAFP is projected at $12.50-$13.50 per cwt, down 20 cents on both the high and low ends of the range from the previous forecast and higher than the revised $10.40 a year earlier.
In late October, USDA reported a long-grain monthly average cash price for September of $11.20 per cwt, up 60 cents from August and the highest since March 2016 and the fifth consecutive month of an increase.
The California September medium- and short-grain cash price was reported at $13.90 per cwt, down 30 cents from August. The September southern medium- and short-grain price was reported at $11.20 per cwt, up 20 cents from August and the highest since February 2016.
The September U.S. medium- and short-grain price was reported at $13.10 per cwt, down 70 cents from August. The all-rice September price was reported at $11.60 per cwt, up 50 cents from August and the highest since August 2016.