Rice Outlook: U.S. 2018/19 Crop Forecast Lowered 1%

Rice harvest. ©Debra L Ferguson Stock Photography

The 2018/19 U.S. rice crop is projected at 210.9 million cwt, down less than 1 percent from the previous forecast but 18 percent above a year earlier. The downward revision is based on a slightly lower yield—the first survey-based yield forecast of the 2018/19 crop—reported by NASS. The smaller crop was more than offset by a 2.5-million cwt increase in the 2018/19 carryin to 34.8 million cwt, leaving total supplies nearly unchanged.

Total domestic and residual use in 2018/19 was raised 3.0 million cwt to 131.0 million cwt, while exports were lowered 4.0 million cwt to 98.0 million cwt. On balance, these revisions raised the 2018/19 ending stocks forecast 1.4 million cwt to 43.6 million cwt.

The season-average farm price forecasts for 2018/19 both classes of rice were lowered this month.

Domestic Outlook

U.S. 2018/19 Rice Crop Projected at 210.9 million Cwt

The 2018/19 U.S. rice production forecast was lowered 2.1 million cwt to 210.9 million cwt due to a slight drop in the yield. At 7,523 pounds per acre, the 2018/19 field yield is 76 pounds below the previous forecast but 16 pounds above a year earlier. This is the first survey-based yield forecast for the 2018/19 rice crop. Despite this month’s downward revision, the 2018/19 U.S. rice crop is forecast 18 percent larger than a year earlier, a result of an 18-percent expansion in harvested area to 2.8 million acres. Harvested area is unchanged from the previous forecast.

By class, the 2018/19 U.S. long-grain crop is projected at 153.7 million cwt, down 2.8 million cwt from the previous forecast but 20 percent larger than a year earlier. The 2018/19 combined medium- and short-grain U.S. crop is projected at 57.2 million cwt, up 0.7 million cwt from the previous forecast and 13 percent larger than a year earlier.

Rice harvested area is projected to be higher than a year ago in all reported States, with Arkansas accounting for 63 percent of the 429,000-acre expansion. At 1.38 million acres, Arkansas’ 2018/19 harvested area is up 25 percent from a year earlier, with long-grain accounting for the bulk of the expected expansion. At 149,000 acres, Mississippi’s 2018/19 harvested area is up 31 percent from a year earlier. Long-grain accounts for all of the State’s rice production.

Texas’ harvested area is forecast at 197,000 acres, up 25 percent from a year earlier, with long-grain accounting for all of the increase and most of the State’s rice area. Harvested area in Missouri is forecast at 194,000 acres, an increase of 21 percent from a year earlier, with long-grain accounting for all of the increase and the bulk of the State’s rice production. In Louisiana, harvested area is projected to increase 2 percent to 404,000 acres, with long-grain accounting for all of the increase. Long-grain typically accounts for more than 90 percent of Louisiana’s rice acreage.

At 483,000 acres, California’s 2018/19 rice harvested area is 9 percent larger than a year earlier, with medium- and short-grain accounting for all of the expansion and nearly all of California’s rice acreage.

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Yields in 2018/19 are forecast to be higher than a year earlier in California and Louisiana; lower than a year earlier in Mississippi, Missouri, and Texas; and nearly unchanged in Arkansas. At 6,900 pounds per acre, Louisiana’s 2018/19 average rice yield is up 3 percent from a year earlier but still well below the 2013/14 record of 7,300 pounds. California’s 2018/19 projected yield of 8,600 pounds per acre is up 2 percent from below-trend yield of a year earlier but still below the 2015/16 record yield of 8,890 pounds per acre.

In contrast, Missouri’s 2018/19 projected rice yield of 7,000 pounds per acre is down 6 percent from the year earlier record. Yields in Texas are projected to drop 4 percent in 2018/19 to 7,000 pounds per acre. At 7,300 pounds per acre, Mississippi’s 2018/19 rice yields are projected to be 1 percent below the year-earlier near-record. At 7,500 pounds per acre, the Arkansas rice yield is just 10 pounds above a year earlier but 60 pounds below the 2013 and 2014 record.

Rice crops in 2018/19 are forecast to be larger than a year earlier in all reported States, with Arkansas accounting for the bulk of the 32,633-cwt U.S. rice production increase. No State is projected to harvest a record crop in 2018/19.

At 103.2 million cwt, Arkansas’ 2018/19 rice crop is projected up 25 percent from a year earlier, largely a result of expanded area. At 10.9 million cwt, Mississippi’s 2018/19 rice crop is projected up 29 percent from a year earlier, also due to expanded area. The Texas 2018/19 rice crop is projected at 13.8 million cwt, a 20-percent increase from a year earlier, also due to expanded area.

Missouri’s projected production of 13.6 million cwt, up 14 percent from a year earlier, is also due to an area expansion. Louisiana’s 2018/19 projected production of 27.9 million cwt is up 5 percent from a year earlier, also due to expanded area and a higher yield.

In California, production is projected at 41.5 million cwt, up 11 percent from a year earlier, a result of both expanded area and a higher yield.

Progress of Southern Rice Crop Remains Ahead of Normal

Despite getting off to a slow start in some areas, progress of the 2018/19 rice crop in the South is ahead of normal. Through August 5, 82 percent of the U.S. 2018/19 rice crop had headed, nearly unchanged from a year earlier but well ahead of the U.S. 5-year average of 70 percent. Progress was ahead of normal in all five reported southern States.

Progress was most advanced on the Gulf Coast, the southern-most U.S. rice producing region. Louisiana’s 2018/19 rice crop was reported 97 percent headed through August 5, nearly unchanged from a year earlier but up 4 percentage points from the State’s 5-year average. Similarly, the Texas 2018/19 rice crop was reported 99 percent headed, nearly unchanged from a year earlier but up 4 percentage points from the State’s 5-year average.

In the Delta, Arkansas’s 2018/19 rice crop was reported headed by August 5, up 4 percentage points from a year earlier and well above the State’s 5-year average of 68 percent. The Missouri 2018/19 rice crop was reported 78 percent headed by August 5, 2 percentage points ahead of a year earlier and well ahead of the State’s 5-year average of 62 percent. Mississippi’s 2018/19 rice crop was reported 90 percent headed by August 5, unchanged from a year earlier but well ahead of the State’s 5-year average of 76 percent.

In California, 50 percent of the 2018/19 rice crop was reported headed by August 5, 6 percentage points behind a year earlier but nearly unchanged from the State’s 5-year average.

Harvest of the 2018/19 rice crop began last month on the Gulf Coast and is expected to begin this month in much of the Delta. California will begin harvest after mid-September. For the week ending August 5, 6 percent of the U.S rice crop had been harvested, down 2 percentage points from last year but up 1 percentage point from a year earlier.

Harvest in Louisiana was the most advanced. Through August 5, 32 percent of Louisiana’s 2018/19 crop had been harvested, behind last year’s 41 percent but well ahead of the State 5-year average of 26 percent.

In nearby Texas, 23 percent of the 2018/19 rice crop was harvested by August 5, well behind 34 percent a year ago but well ahead of the State’s 5-year average of 18 percent.

U.S. 2018/19 Total Rice Supplies Up 8 Percent from 2017/18

There were several supply side revisions to the 2018/19 U.S. rice balance sheet this month, a result of both the revised crop forecast and revisions to the 2017/18 rice balance sheet.

First, the 2018/19 U.S. rice carryin was increased 2.5 million cwt to 34.8 million cwt due to another month of revisions to the 2017/18 export and domestic and residual use forecasts. Despite the upward revision, the 2018/19 carryin is 24.5 percent below a year earlier.

By class, long-grain carryin is forecast at 23.4 million cwt, up 3.0 million cwt from the previous forecast but 25 percent below a year earlier. Combined medium- and short-grain carryin is forecast at 7.9 million cwt, down 0.5 million cwt from the previous forecast but 31 percent below a year earlier and the smallest since 1999/2000.

Second, the 2018/19 U.S. rice crop forecast was decreased 1 percent to 210.9 million cwt due to a lower yield. The long-grain 2018/19 crop projection was decreased 2 percent while the medium- and short-grain crop forecast was increased 1 percent.

Imports in 2018/19 remain forecast at 27.0 million cwt, unchanged from the year-earlier record. Long-grain 2018/19 imports remain forecast at 23.5 million cwt, also unchanged from the earlier record. Thailand, India, and Pakistan are expected to again account for the bulk of U.S. long-grain rice imports, shipping almost exclusively aromatic rice varieties. Medium- and short-grain imports remain projected at 3.5 million cwt, also unchanged from a year earlier. Specialty rice from Thailand accounts for most of U.S. medium- and short-grain rice imports.

Total U.S. rice supplies in 2018/19 are projected at 272.6 million cwt, nearly unchanged from the previous forecast—as a larger carryin was nearly offset by a smaller crop projection—but 8 percent larger than a year earlier. The year-to-year supply increase is the result of a much larger crop more than offsetting a big decline in carryin.

Long-grain supplies are projected at 200.6 million cwt, nearly unchanged from the previous forecast but up 10 percent from a year earlier. Medium- and short-grain supplies are forecast at 68.5 million cwt, also nearly unchanged from last month but up almost 5 percent from a year earlier.

Forecasts for 2018/19 Domestic Use Raised, Exports Lowered

Total domestic and residual use of rice in 2018/19 is projected at 131.0 million cwt, up 3.0 million cwt from the previous forecast and almost 1 percent larger than the year-earlier revised forecast. This is the second consecutive month of an upward revision in the 2018/19 domestic and residual use forecast.

The upward revision was primarily based on higher estimated domestic and residual use in 2017/18. In addition to food and industrial uses of rice—primarily as pet food and beer—domestic and residual use accounts for post-harvest losses, including unreported losses in processing, marketing, and transporting. These losses are typically proportional to the crop size.

Long-grain domestic and residual use is projected at 102.0 million cwt, an increase of 3.0 million cwt from the previous forecast and 8 percent larger than in 2017/18. Medium- and short-grain domestic and residual use remains projected at 29.0 million cwt, almost 15 percent below the abnormally high level estimated for 2017/18.

Total U.S. rice exports in 2018/19 are projected at 98.0 million cwt, down 4.0 million cwt from the previous forecast but up 13 percent from the year earlier revised forecast. This month’s downward revision in U.S. exports is based on expectations of continued strong price competition in key U.S. markets in Latin America, mostly from South American suppliers.

On an annual basis, the expected all-rice export increase in 2018/19 is based on larger supplies, slightly lower U.S. prices, and weaker shipments from Australia and Egypt—top competitors in the global medium- and short-grain market.

U.S. rough rice exports in 2018/19 remain projected at 34.0 million cwt, up 17 percent from the revised 2017/18 forecast, with expanded shipments to Latin America accounting for most of the expected increase. U.S. sales to the Mediterranean are expected to be higher as well, largely due to a smaller crop in Egypt, a major supplier to the region, as well as tighter supplies in Australia.

Latin America accounts for the bulk of U.S. rough-rice exports, taking almost exclusively long-grain rice. Markets in the Mediterranean account for most of the remaining U.S. rough-rice exports, purchasing mostly medium-grain rice, typically from the South.

U.S. milled rice exports (combined milled and brown rice exports on a rough basis) in 2018/19 are projected at 64.0 million cwt, down 4.0 million cwt from the previous forecast but 11 percent above a year earlier. The downward revision is largely based on a recent slow pace of sales, especially to the Middle East and Sub-Saharan Africa, as well as some markets in Latin America.

On an annual basis, Latin America (especially Haiti) and Northeast Asia are likely to import more U.S. milled-rice in 2018/19, with the expected growth in Northeast Asia mostly accounted for by shipments purchased in 2017/18. Haiti is expected to remain the largest market for U.S. long-grain milled rice.

U.S. long-grain exports in 2018/19 are projected at 68.0 million cwt, down 4.0 million cwt from the previous forecast but 8 percent above the year-earlier revised forecast. Latin America, the largest market for U.S. long-grain rice exports, is expected to account for most of the increase, primarily due to lower U.S. prices and larger supplies.

In recent years, the United States has lost market shares in both Mexico and Central America, mostly to South American exporters and, to a lesser extent, some Asian exporters. The U.S. remains the largest supplier to both of these substantial rice-importing markets, but its share continues to decline—especially to Mexico, mostly due to improved quality and more competitive prices from South American exporters.

In addition, Mexico has provided 150,000 tons of duty-free import access to non-NAFTA rice suppliers for the past 2 years. In 2017/18, the U.S. lost substantial market share in Venezuela as well, also mostly to South American competitors.

Combined medium- and short-grain exports remain projected at 30.0 million cwt, up 28 percent from the 2017/18 abnormally low level. Much of the expected increase is due to shipments to Northeast Asia that were purchased in 2017/18. In addition, the U.S. is likely to pick-up additional sales in the Middle East due to Egypt’s tight supply situation and decision to import rice and a second consecutive weak crop in Australia.

Total use of U.S. rice in 2018/19 is projected at 229.0 million cwt, down 1.0 million cwt from the previous forecast but 6 percent larger than a year earlier. Long-grain total use is projected at 170.0 million cwt, down 1.0 million cwt from the previous forecast but 7 percent larger than in 2017/18. Medium- and short-grain total use in 2018/19 is projected at 59.0 million cwt, unchanged from the previous forecast but almost 3 percent larger than a year earlier, a result of increased exports.

U.S. Ending Stocks Projected To Increase 25 Percent in 2018/19

U.S. ending stocks of all rice in 2018/19 are projected at 43.6 million cwt, an increase of 3 percent from the previous forecast and 25 percent larger than a year earlier. The substantial rise in ending stocks in 2018/19, despite stronger total use, is due to an 18-percent increase in production. The 2018/19 stocks-to-use ratio is projected at 19 percent, well above 16 percent in 2017/18.

The stocks situation varies by class. Long-grain 2018/19 ending stocks are projected at 30.6 million cwt, an increase of 4 percent from the previous forecast and 31 percent larger than a year earlier. The long-grain stocks-to-use ratio is projected at 18.0 percent, up from 14.7 percent in 2017/18. An ending-stocks projection and stocks-to-use ratio of these levels will likely put downward pressure on long-grain prices during the 2018/19 market year.

For medium- and short-grain rice, 2018/19 ending stocks are projected at 9.5 million cwt, up almost 2 percent from the previous forecast and almost 21 percent larger than a year earlier. The medium- and short-grain stocks-to-use ratio is projected at 16.2 percent, up from 13.7 percent in 2017/18.

U.S. 2017/18 Export Forecast Lowered, Domestic Use Raised

For the second consecutive month, forecasts for U.S. 2017/18 rice exports were lowered and forecasts for domestic and residual use were revised up. First, total domestic and residual use for 2017/18 was raised 1.0 million cwt to 130.0 million cwt, 2 percent below a year earlier. The slight upward revision in the 2017/18 total domestic and residual use forecast is largely based on implied domestic use through May and the slow pace of exports in June and July.

By class, long-grain domestic use was increased 1.0 million cwt to 96.0 million cwt, down 6 percent from a year earlier. Medium- and short-grain domestic and residual use in 2017/18 remains forecast at 34.0 million cwt, up 8 percent from 2016/17 and the highest since 2006/07, also a year of abnormally low exports.

Second, the 2017/18 total U.S. export forecast was lowered 3.5 million cwt to 86.5 million cwt based on monthly Census trade data through June and shipment and sales data reported in the weekly U.S. Export Sales through July 31. Milled rice accounted for most of the downward revision in the U.S. 2017/18 export forecast. At 57.5.0 million cwt, milled-rice exports are 2.5 million cwt below the previous forecast and 22 percent below a year earlier and the lowest since 1975/76.

U.S. 2017/18 rough-rice exports are forecast at 29.0 million cwt, down 1.0 million cwt from the previous forecast, and 28 percent below the year-earlier near-record. Venezuela and Libya account for much of the decline in U.S. rough-rice exports in 2017/18.

By class, long-grain 2017/18 exports are forecast at 63.0 million cwt, 4.0 million cwt below the previous forecast and almost 18 percent below a year earlier. The downward revision was largely based on weaker than expected shipments to core U.S. markets in Latin America. On a year-to-year basis, Venezuela accounts for much of the decline in U.S. long-grain exports.

The U.S. medium- and short-grain 2017/18 export forecast was raised 0.5 million cwt to 23.5 million cwt, down 38 percent from a year earlier and the lowest since 2006/07. Shipments to Northeast Asia in June and July were slightly stronger than expected.

On balance, these partially offsetting domestic use and export revisions raised 2017/18 all rice ending stocks 2.5 million cwt to 34.8 million cwt, 24.5 percent below a year earlier. Long-grain ending stocks were raised 3.0 million cwt to 23.4 million cwt, 25 percent below a year earlier. The combined medium- and short-grain 2017/18 ending stocks forecast was lowered 0.5 million cwt to just 7.9 million cwt, 31.5 percent below a year ago and the lowest since 1998/99.

U.S. 2018/19 Season-Average Farm Prices Lowered

This month, USDA lowered its forecasts for 2018/19 season-average farm prices for both classes of rice, mostly based on recent price movements. The 2018/19 long-grain SAFP is projected at $10.50-$11.50 per cwt, down 20 cents on the high and low end of last month’s range. The midpoint is down 70 cents from 2017/18. The Southern 2018/19 medium- and short-grain season-average farm price is projected at $10.80-$11.80 per cwt, down 20 cents on both the high and low ends of last month’s range.

The 2018/19 midpoint is 70 cents below a year earlier. The California 2018/19 medium- and short-grain season-average price remains projected at $16.00-$17.00 per cwt, with the midpoint just 10 cents below the 2017/18 SAFP.

The U.S. 2018/19 medium- and short-grain season-average farm price is projected at $14.40-$15.40 per cwt, down 10 cents on both ends of the previous range. The 2018/19 mid-point is 10 cents below a year earlier. The all-rice 2018/19 season-average farm price is projected at $11.40-$12.40 per cwt, down 20 cents on both ends of the previous range. The midpoint of the 2018/19 all rice SAFP is 60 cents below a year earlier.

There were small revisions this month to the 2017/18 U.S. SAFP forecasts. The California 2017/18 SAFP was lowered to $16.60 per cwt from last month’s $16.70, well above $14.10 in 2016/17. The slight downward revision was based on reported prices and marketings through June and expectations regarding prices and marketings in July.

The U.S. 2017/18 medium- and short-grain SAFP was revised to $15.00 from the previous forecast of $15.10 per cwt, well above $13.10 in 2016/17. Finally, the 2017/18 all-rice SAFP was lowered 10 cents to $12.50 per cwt, well above $10.40 in 201/17. The 2017/18 long-grain SAFP remains forecast at $11.70 per cwt, up from $9.61 in 2016/17.

Full report.


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