Rice Outlook: U.S. Supplies Forecasted 7% Smaller

©Debra L Ferguson Stock Photography

The only supply-side revision to the 2019/20 U.S. rice balance sheet this month was a 1.3-million cwt increase in the production forecast to 188.6 million cwt, still nearly 16 percent below a year earlier. Total supplies are now forecast at 263.1 million cwt, 7 percent below a year earlier. There were no revisions on the 2019/20 use side this month. The larger crop raised the 2019/20 ending stocks forecast 4 percent to 37.1 million cwt, still down 17 percent from a year earlier.

The long-grain and southern medium- and grain season-average farm price forecasts were both lowered this month, partly based on the August NASS reported cash prices.

Domestic Outlook

U.S. 2019/20 Rice Crop Forecast Raised to 188.6 Million Cwt

This month, USDA raised its 2019/20 U.S. rice production forecast 1.3 million cwt to 188.6 million cwt based on a slightly higher average yield. The 2019/20 area forecast was unchanged from September. The Texas 2019/20 yield was boosted 4 percent from the September forecast and the California yield and Arkansas yield were each increased around 1 percent. In contrast, Louisiana’s yield was lowered almost 1 percent from September.

If the forecasts are realized, 2019/20 U.S. rice production remains almost 16 percent lower than a year earlier; a result of a 15-percent drop in harvested area and a national average yield that still remains 1 percent below 2018/19. The substantial area decline in 2019/20 is largely due to excessive spring rainfall in most of the southern rice growing States, especially in the northern Mississippi River Delta, that prevented several hundred thousand acres of rice from being planted and slowed crop progress and operations throughout the market year.

By class, the U.S. 2019/20 long-grain crop is forecast at 127.5 million cwt, up 0.9 million cwt from the September forecast but still 22 percent smaller than a year earlier. This would be the smallest U.S. long-grain rice crop since 2011/12. The combined medium- and short-grain rice crop is forecast at 61.1 million cwt, up 0.4 million cwt from the September forecast and more than 1 percent above a year earlier.

Harvested area in 2019/20 is estimated to be lower than a year earlier in all reported rice producing States, with Arkansas accounting for 69 percent of the 438,000-acre decline. At 1.13 million acres, rice harvested area in Arkansas is estimated to be 21 percent below a year earlier. Missouri’s 2019/20 estimated rice harvested area of 173,000 acres is also 21 percent below a year earlier.

Both Delta rice growing States received substantial rains during most of the spring that delayed plantings, crop development, and operations. Mississippi’s 2019/20 harvested area is estimated at 116,000 acres, 16.5 percent below a year earlier.

In Texas, 2019/20 harvested area is estimated at 154,000 acres, 18.5 percent below a year earlier and the smallest harvested area since 2015/16. Louisiana’s 2019/20 harvested area is estimated at 415,000 acres, 5 percent below a year earlier, the smallest percentage decline in area of any southern State.

In California, harvested area is estimated at 493,000 acres, just 2 percent below a year earlier. In contrast to most of the South, growing conditions were quite favorable to producing rice all season in California.

The October average U.S. field yield projection of 7,616 pounds per acre in 2019/20 is 53 pounds higher than the September forecast but 76 pounds below the year earlier near-record. Yields are anticipated to be below 2018/19 in all reported States except California and Mississippi.

The average yield in Louisiana is projected to drop almost 7 percent from 2018/19 to 6,650 pounds per acre, the lowest since 2016/17. In nearby Texas, the 2019/20 average yield is forecast at 7,600 pounds per acre, almost 5 percent below a year earlier and the lowest since 2016/17.

Missouri’s yield of 7,500 pounds per acre is 3.5 percent below the 2018/19 record yield. At 7,500 pounds per acre, Arkansas’ 2019/20 average yield is down just 20 pounds from a year earlier. Mississippi’s 2019/20 average field yield of 7,350 pounds per acre is unchanged from 2018/19.

In contrast, California’s 2019/20 average yield of 8,800 pounds per acre is up 2 percent from 2018/19.

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Rice production in 2019/20 is projected to be smaller than a year earlier in all reported southern rice producing States, with Arkansas accounting for 64 percent of the 35.6 million cwt projected U.S. decline.

At 84.5 million cwt, the Arkansas 2019/20 rice crop is projected to be 21 percent below a year earlier, almost totally due to reduced harvested area. Missouri’s 2019/20 projected crop of 13.0 million cwt is 24 percent smaller than the 2018/19 crop, mostly due to smaller harvested area. Mississippi’s 2019/20 production is projected to decline nearly 17 percent to 8.5 million cwt, a result of reduced area.

The 2019/20 Texas rice crop of 11.7 million cwt is projected to be 22 percent smaller than a year earlier, with reduced harvested area accounting for the bulk of the decline. At 27.6 million cwt, Louisiana’s 2019/20 rice production is projected to be 11 percent below a year earlier, a result of both a lower yield and smaller harvested area.

In contrast, California’s projected rice production of 43.4 million cwt is almost unchanged from a year earlier as a 2-percent area drop is almost offset by a higher yield.

Pace of the 2019/20 U.S. rice harvest remains behind normal in most of the South and in California, despite generally favorable weather conditions over the past few weeks in both regions. By October 6, harvest was 97 or 98 percent complete in the Gulf Coast rice producing States, just 2 percentage points behind each States’ 5-year average. Except for the harvest of the partial second—or ratoon—crop, harvest of the main crop should be virtually over by now in Texas and Louisiana. Ratoon crops are not grown in the other, more northern, rice producing States.

In Arkansas, 82 percent of the 2019/20 rice crop was reported harvested by October 6, 4 percentage points behind a year earlier and 5 percentage points behind the State’s 5-year average. Mississippi’s 2019/20 harvest was reported 80 percent complete by October 6, well behind 91 percent a year ago and behind the State’s 5-year average of 88 percent.

In contrast, in nearby Missouri, 84 percent of the 2019/20 rice crop was reported harvested by October 6, up from 69 percent a year earlier and State’s 5-year average of 73 percent. About 40 percent of Missouri’s 2019/20 rice crop was harvested between September 23 and October 6, allowing the State’s harvest pace to surpass the pace of the other two Delta growing States, despite a delayed start to the harvest.

California’s 2019/20 rice crop was reported 30 percent harvested by October 6, 2 percentage points ahead of a year earlier but 8 percentage points behind the State’s 5-year average. With normal weather, California growers can quickly catch up with the State’s normal harvest pace.

U.S. 2019/20 Rice Imports Remain Projected Record High

The forecasts for beginning stocks and imports were not revised this month. Beginning stocks for 2019/20 remain estimated at 44.85 million cwt, 53 percent larger than a year earlier. Long-grain beginning stocks remain estimated at 32.6 million cwt, more than 60 percent higher than a year earlier. Combined medium- and short-grain beginning stocks remain estimated at 10.2 million cwt, up 33 percent from a year earlier. Stocks of brokens—not reported by length of grain—remain estimated at 2.1 million cwt, up 46 percent from a year earlier.

The 2019/20 U.S. all rice import forecast remains at a record 29.6 million cwt, up 2 percent from a year earlier. Through August 2019, total imports on a product-weight basis were reported at 76,569 tons, up 22 percent from a year earlier. Long-grain imports in 2019/20 remain forecast at a record 24.0 million cwt, up 2.5 percent from a year earlier. Aromatic varieties from Thailand, India, Pakistan, and Vietnam are expected to account for the bulk of U.S. long-grain rice imports.

Through August 2019, the U.S. imported 66,880 tons of long-grain rice, up 26 percent from August 2018, with Thailand accounting for almost all of the increase.

U.S. medium- and short-grain imports remain forecast at 5.6 million cwt, fractionally above a year earlier. The medium- and short-grain import forecast assumes continued large purchases by Puerto Rico of rice from China in 2019/20. In August, the U.S. imported 9,688 tons of medium- and short-grain rice, up 3.5 percent from a year earlier. Specialty rice from Thailand and India accounted for about 83 percent of U.S. medium- and short-grain imports in August, with shipments from China extremely small.

In total, the October production revision resulted in a 1.3-million cwt increase in the 2019/20 total U.S. supply forecast to 263.1 million cwt, 7 percent below a year earlier. The long-grain 2019/20 total supply forecast was increased 0.9 million cwt to 184.1 million cwt, 11 percent below a year earlier. The medium- and short-grain supply forecast was raised 0.4 million cwt to 76.9 million cwt, up almost 6 percent from a 2018/19.

Slight Growth Projected for U.S. Rice Exports in 2019/20

There were no revisions this month on the use side of the 2019/20 U.S. rice balance sheet.

Total domestic and residual use for 2019/20 remains forecast at 131.0 million cwt, 9 percent below a year earlier and the smallest since 2015/16. Long-grain domestic and residual use in 2019/20 remains forecast at 98.0 million cwt, more than 10 percent smaller than a year earlier. The substantial projected decline is based on much smaller supplies.

Medium- and short-grain domestic and residual use in 2019/20 remains forecast at 33.0 million cwt, 5 percent below a year earlier. The current forecast for medium- and short-grain domestic and residual use is nearly equal to the recent 5-year average.

All-rice 2019/20 exports remain forecast at 95.0 million cwt, just 1.5 percent above a year earlier. Long-grain exports in 2019/20 remain forecast at 66.0 million cwt, nearly unchanged from a year earlier, despite an abnormally large carryover of outstanding sales from 2018/19. Mexico, Iraq, and Haiti account for the bulk of the abnormally large carryover of long-grain sales.

Latin America is projected to remain the top market for U.S. long-grain rice in 2019/20. The Middle East and Canada are projected to account for most of the remaining U.S. long-grain exports, with sales to Sub-Saharan Africa expected to remain small.

U.S. medium- and short-grain exports in 2019/20 remain projected at 29.0 million cwt, up 4 percent from 2018/19. An abnormally large carryover of outstanding sales to Japan from the 2018/19 market and a likely increase in sales to North Africa are behind expectations for larger exports. Northeast Asia (primarily Japan, South Korea, and Taiwan) is expected to remain the top market for U.S. medium- and short-grain exports. All imports of rice by these three countries are made as part of World Trade Organization agreements.

U.S. 2019/20 rough rice exports remain forecast at 33.0 million cwt, nearly unchanged from a year earlier. Long-grain shipments to Latin America account for the bulk of U.S. rough rice exports, with Mexico and Central America the top markets. For more than half a decade, the United States has lost market share in these markets to South American exporters, with relative prices a major factor.

In 2018/19, the United States regained some market share in Mexico and returned as a major supplier to Nicaragua after 6 years of minimal sales to this former top U.S. rice export market. Currently, Libya and Mexico are the only markets for medium- and short-grain rough rice exports. Mexico has always been a small buyer of medium- and short-grain rice, with long-grain the dominant purchase.

Prior to 2017/18, Turkey was a regular large buyer of U.S. medium- and short-grain rough rice, but has not made any purchases since and is not expected to return as a buyer in 2019/20.

U.S. 2019/20 milled rice exports (combined milled and brown rice exports on a milled basis) remain projected at 62.0 million cwt, almost 2 percent above 2018/19. Haiti and Japan are expected to account for most of the increase in U.S. milled rice exports in 2019/20, with Japan’s increase due to a large carryover of sales from 2018/19. U.S. sales to Sub-Saharan Africa are projected to remain quite small as the U.S. is not price competitive in this huge and growing market.

U.S. 2019/20 Season-Average Farm Price Forecasts Lowered from September Forecasts

The larger October production forecast resulted in a 4-percent increase in projected 2019/20 U.S. ending stocks to 37.1 million cwt, still 17 percent below a year earlier. The 2019/20 stocks-to-use ratio is forecast at 16.4 percent, down from 18.9 percent a year earlier. The long-grain ending stocks forecast was raised 0.9 million cwt to 20.1 million cwt this month, 38 percent smaller than a year earlier.

The long-grain stocks-to-use ratio is forecast at 12.3 percent, down from 18.6 percent in 2018/19 and the smallest since 2013/14. The medium- and short-grain ending stocks forecast was raised 0.4 million cwt to 14.9 million cwt, up 46 percent from a year earlier. The medium- and short-grain stocks-to-use ratio is forecast at 24.0 percent, well above 16.3 percent in 2018/19.

This month, the 2019/20 U.S. long-grain season-average farm price (SAFP) was lowered 20 cents to $11.80 per cwt, still up $1.00 from a year earlier. The downward revision was based on reported cash prices in August and expectations regarding prices and marketings for the remainder of the market year. The August NASS reported cash price was $10.70 per cwt, unchanged from June and July.

The 2019/20 southern medium- and short-grain SAFP forecast was also lowered 20 cents, to $12.30 per cwt, unchanged from a year earlier. The downward revision was largely based on lower expected long-grain prices.

In contrast to the south, the California medium- and short-grain SAFP forecast is unchanged at $18.50 per cwt, up 50 cents from a year earlier. The U.S. medium- and short-grain SAFP was lowered 10 cents to $16.50 per cwt, still up 20 cents from a year earlier, a result of higher expected prices in California in 2019/20 than in 2018/19. The October estimate for the U.S. all-rice 2019/20 SAFP is $13.00 per cwt; down 20 cents from the September projection but $1.00 higher than the 2018/19 price.

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