Rice Outlook: U.S. Export Forecasts Lowered for Both 2019/20 and 2020/21

©Debra L Ferguson Stock Photography

There were several changes this month to both the 2019/20 and 2020/21 U.S. rice balance sheets. For 2019/20, imports were raised, domestic use increased, and exports were lowered, resulting in a 1.5-million-hundredweight (cwt) increase in the ending stocks forecast. For 2020/21, carryin, imports, and domestic use were revised up, while exports were lowered slightly.

On balance, these revisions resulted in a 2.5-million-cwt increase in the 2020/21 ending stocks forecast. The 2020/21 U.S. season-average farm prices were unchanged from a month earlier. In the global market, record production is projected for 2020/21 despite a reduction this month in Vietnam’s crop forecast.

The 2021 global rice trade forecast was lowered fractionally but is still 6 percent above a year earlier. Global ending rice stocks were revised higher and remain record high. Thailand’s trading prices have declined from early May, while U.S. prices are unchanged and Vietnam’s prices are up slightly.

Domestic Outlook

U.S. 2020/21 Total Rice Supply Forecast Raised 2.5 Million Cwt

There were two supply-side revisions this month to the 2020/21 U.S. all-rice balance sheet. First, the 2020/21 carryin was increased 1.5 million cwt to 32.0 million cwt, still down almost 29 percent from a year earlier. The increase was due to an upward revision—all for long-grain—in the 2019/20 import forecast.

By class, the long-grain 2020/21 carryin was raised 1.5 million cwt to 16.2 million cwt, down 50 percent from a year earlier and second-smallest since 2004/05. In contrast, the combined medium- and short-grain 2020/21 carryin remains forecast at 13.7 million cwt, up 35 percent from a year earlier.

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The 2020/21 all-rice import forecast was raised 1.0 million cwt to a record 33.6 million cwt, up just 0.1 million cwt from the 2019/20 revised import forecast. The 2020/21 import revision was also all for long-grain and was based on stronger-than-expected purchases in 2019/20 through April 2020 and expectations of continued large imports in 2020/21.

Specific Asia aromatic varieties not currently grown in the United States account for virtually all of the steady expansion in U.S. long-grain imports. At 27.0 million cwt, U.S. 2020/21 long-grain imports are up 1.0 million cwt from the previous forecast and unchanged from the year-earlier revised record.

U.S. medium- and short-grain imports in 2020/21 remain forecast at a record 6.6 million cwt, an increase of just 0.1 million cwt from 2019/20. U.S. medium- and short-grain imports have increased sharply since 2017/18 due to continued large purchases of China’s rice by Puerto Rico. This rice is sold at substantially discounted prices from multi-year Government-held stocks.

Since May 2018, China has sent three or four shipments of about 21,000 tons of milled medium- and short-grain rice to the United States every 12 months. These shipments are expected to continue in 2020/21. China and Thailand each now account for about a third of total U.S. medium- and short-grain rice imports. India supplies around 15 percent, with Italy a regular supplier of smaller quantities of its Arborio rice.

The 2020/21 U.S. rice crop remains projected at 216.2 million cwt, up 31.5 million cwt from a year earlier, a result of both larger area and a higher yield. The harvested area estimate of 2.81 million acres is based on the NASS March 31 Prospective Planting report and uses a 5-year Olympic average of planted-to-harvested ratio by class. The first survey of actual plantings of the 2020/21 U.S. rice crop will be reported by the National Agricultural Statistics Service (NASS) in the June Acreage report, scheduled for release on June 30.

The 2020/21 average rice yield remains projected at 7,699 pounds per acre, up 228 pounds from a year earlier and the highest on record. The yield is based on trend yield by class. The first survey yield forecast for the 2020/21 U.S. rice crop will be released on August 12 in the NASS Crop Production report.

By class, long-grain rice production in 2020/21 remains projected at 155.5 million cwt, up 24 percent from a year earlier. Almost all U.S. long-grain rice is grown in the South. The 2020/21 combined medium- and short-grain crop remains projected at 60.7 million cwt, up almost 3 percent from a year earlier and the largest since 2011/12. About 80 percent of the U.S. medium- and short-grain crop is grown in California.

Progress of the 2020/21 U.S. rice crop remains slightly behind normal in parts of the Delta, a result of persistent rain and wet conditions this Spring, similar to 2019/20 but not as severe. For the week ending June 7, 95 percent of the U.S. rice crop was reported planted, unchanged from last year’s rain-delayed crop but 3 percentage points behind the U.S. 5-year average. Progress varied by region and State.

On the Gulf Coast, planting was completed in Louisiana by June 7, just 1 percentage point ahead of a year earlier and even with the State’s 5-year average. Harvest should begin in Louisiana in early July. Planting was only slightly slower in Texas, with 98 percent of the crop reported planted by June 7, 1 percentage point ahead of both a year earlier and the Texas 5-year average. For both Gulf Coast States, early planting bodes well for a good yield and a successful ratoon crop.

In the Delta, the Arkansas crop was reported 93-percent planted by June 7, unchanged from a year earlier but behind the Arkansas 5-year average of 98 percent, a result of the persistent rain this Spring. Missouri’s crop was reported 86-percent planted by June 7, 2 percentage points ahead of a year earlier but behind the Missouri 5-year average of 95 percent, also a result of the continued rain and wet conditions. Mississippi’s crop was reported 98-percent planted by June 7, up 3 percentage points from a year earlier but unchanged from the State’s 5-year average.

Finally, in California, 100 percent of the rice crop was reported planted by June 6, 1 percentage point ahead of both a year earlier and the California 5-year average.

Emergence of the 2020/21 U.S. rice crop remains behind normal in much of the Delta as well, with the pace of emergence varying by State and region. For the week ending June 7, 88 percent of the U.S. 2020/21 rice crop had emerged, 4 percentage points ahead of a year earlier but behind the U.S. average of 93 percent.

On the Gulf Coast, 98 percent of the Texas crop had emerged by June 7, ahead of both 91 percent a year earlier and the Texas 5-year average of 94 percent. In Louisiana, 97 percent of the crop had emerged by June 7, 1 percentage point ahead of a year earlier and 2 percentage points ahead of the Louisiana 5-year average.

In the Delta, 87 percent of the Arkansas crop had emerged by June 7, 5 percentage points ahead of the year-earlier rain-delayed crop but behind the Arkansas 5-year average of 95 percent. In nearby Missouri, 78 percent of the rice crop had emerged by June 7, just 1 percentage point ahead of last year’s rain-delayed crop but well behind the Missouri 5-year average of 91 percent. Mississippi’s crop was reported 89 percent emerged by June 7, 4 percentage points ahead of a year earlier but behind the Mississippi 5-year average of 93 percent.

In California, 85 percent of the crop had emerged by June 7, 4 percentage points ahead of last year and 5 percentage points ahead of the California 5-year average.

Crop conditions for 2020/21 are much improved from a year earlier in most States, mostly due to more favorable weather in most areas, despite the persistent rainfall in parts of the Delta. For the week ending June 7, 70 percent of the U.S. 2020/21 rice crop was rated in good or excellent condition, compared with 61 percent a year earlier.

In Arkansas, 64 percent of the 2020/21 crop was rated in good or excellent condition for the week ending June 7, up from 56 percent a year earlier. In nearby Missouri, 54 percent of the 2020/21 rice crop was rated in good or excellent condition, up from 48 percent a year earlier. In contrast, 56 percent of Mississippi’s 2020/21 rice crop was rated good or excellent, down from 63 percent a year earlier.

In Louisiana, 83 percent of the 2020/21 rice crop was rated in good or excellent condition, up from 68 percent a year earlier. Similarly, in Texas, 62 percent of the 2020/21 rice crop was rated in good or excellent condition for the week ending June 7, well above just 35 percent a year earlier.

Finally, in California 85 percent of the 2020/21 rice was rated in good or excellent condition, unchanged from a year earlier.

This month’s upward revision in both carryin and imports boosted the 2020/21 U.S. total rice supply forecast 2.5 million cwt to 281.8 million cwt, 7 percent larger than in 2019/20. The expectation of larger supplies in 2020/21 is the result of a 17-percent increase in production more than offsetting a substantial decline in carryin, with imports just fractionally higher.

At 198.7 million cwt, the 2020/21 long-grain total supply forecast is up 2.5 million cwt from the previous forecast and more than 7 percent larger than in 2019/20. A much larger crop and slightly increased imports more than offset a substantial decline in carryin.

Combined medium- and short-grain total supplies remain forecast at 81.1 million cwt, also up 7 percent from 2019/20, mostly due to a larger carryin, with expected increases in production and imports much smaller.

2020/21 U.S. Export Forecast Lowered; Domestic Use Raised

Total use of U.S. rice in 2020/21 is projected at 238.5 million cwt, up 1.0 million cwt from the previous forecast and 3 percent larger than the year-earlier revised level, with forecasts for both exports and domestic and residual use projected to be higher in 2020/21. Long-grain total use is projected at 176.0 million cwt, an increase of 1.0 million cwt from the previous forecast and 4 percent larger than the year-earlier revised forecast. Medium- and short-grain total use in 2020/21 remains forecast at 62.5 million cwt, up less than 1 percent from a year earlier.

Total domestic and residual use in 2020/21 is projected at 139.5 million cwt, up 2.0 million cwt from the previous forecast, more than 3 percent larger than a year earlier and the second highest on record. This month’s upward revision in the total domestic and residual use forecast was primarily based on the higher import forecast. The year-to-year increase in total domestic and residual use is primarily based on increased supplies of rice in 2020/21 and expectations of greater post-harvest losses associated with a larger crop.

By class, long-grain domestic and residual use is projected at 105.0 million cwt, up 2.0 million cwt from the previous forecast and 4 percent larger than a year earlier. Combined medium- and short-grain domestic and residual use remains projected at 34.5 million cwt, up almost 1.5 percent from 2019/20.

Total U.S. rice exports in 2020/21 are projected at 99.0 million cwt, down 1.0 million cwt from the previous forecast but still 3 percent larger than the year-earlier revised estimate. Long-grain accounts for all of the expected increase in U.S. exports in 2020/21. At 71.0 million cwt, the U.S. 2020/21 long-grain export forecast is down 1.0 million cwt from the previous forecast but still up more than 4 percent from the year-earlier revised level.

This month’s slight reduction in the 2020/21 long-grain export forecast is based on expectations of continued strong competition from South American exporters in Latin American markets. Latin America is the largest market for U.S. long-grain rice. On an annual basis, the expected increase in long-grain exports is based on larger U.S. supplies and lower projected U.S. long-grain prices.

Similar to recent years, the United States is expected to ship little rice to Sub-Saharan Africa beyond food aid shipments—which account for less than 3 percent of total U.S. rice exports—and is likely to continue to sell almost no long-grain rice to Asia. U.S. prices are too high for these two price-sensitive markets.

U.S. medium- and short-grain rice exports in 2020/21 remain projected at 28.0 million cwt, unchanged from 2019/20. The United States is expected to again export little rice beyond its current six core markets.

First, the three major buyers in Northeast—Japan, South Korea, and Taiwan, whose purchases are all made as part of World Trade Organization agreements—are expected to again account for around two-thirds of U.S. medium- and short-grain exports (on a rough basis). Jordan typically imports around 3 million cwt, all milled rice. Mexico typically purchases a small amount of U.S. medium-grain rough rice.

Canada is also regular buyer of relatively small quantities U.S. medium-grain milled rice. Turkey, once a large regular buyer of U.S. medium- and short-grain rice, returned as small buyer of U.S. rice in 2019/20, purchasing less than a million cwt of California rough rice. Little, if any, growth in U.S. exports of medium- and short-grain exports to Turkey is expected in 2020/21.

By type, U.S. rough-rice exports are projected at 36.0 million cwt, down 1.0 million cwt from the previous forecast but up 2.0 million from the revised 2019/20 level. Most of the rough rice is expected to be sold to Latin American buyers, primarily Mexico, Central America, and northern South America. The bulk of these shipments will be rough rice. Milled-rice exports in 2020/21 remain projected at 63.0 million cwt, up 1.0 million cwt from 2019/20. Northeast Asia, Haiti, Canada, Iraq, and Saudi Arabia are expected to remain the largest markets for U.S. milled rice.

The above supply and use projections yield a 2020/21 ending stocks forecast of 43.3 million cwt, up 1.5 million cwt from the previous forecast and 35 percent larger than the year-earlier revised level. The 2020/21 stocks-to-use ratio of 18.2 percent is well above a revised abnormally low 13.9 percent for 2019/20.

By class, long-grain ending stocks in 2020/21 are projected at 22.7 million cwt, up 1.5 million cwt from the previous forecast and 40 percent higher than this year’s unusually low level. The long-grain stocks-to-use ratio is forecast at 12.9 percent, well above the abnormally low 9.6 percent a year earlier.

In contrast, medium- and short-grain ending stocks are projected to increase 35 percent in 2020/21 to 18.6 million cwt, unchanged from the previous forecast. The medium- and short-grain stocks-to-use ratio remains projected at 29.7 percent, up from 22.2 percent a year earlier and the highest since 2015/16.

U.S. 2019/20 Import Forecast Increased, Export Forecast Lowered, Domestic and Residual Use Forecast Raised

There were several revisions this month to the 2019/20 U.S. rice balance sheet, with revisions for both all rice and long-grain. On the supply side, the all-rice import forecast was raised 1.5 million cwt to 33.5 million cwt, up 17 percent from a year earlier. The substantial upward revision was based on monthly Census imports through April and expectations regarding imports the remainder of the 2019/20 market year.

In April, the United States imported a record 136,993 tons of rice (product-weight), up 65 percent from a month earlier. Thailand supplied more than 82,000 tons of rice in April, a record as well. The long-grain import forecast was raised 1.5 million cwt to a record 27.0 million cwt. In April, the United States imported almost 99,000 tons of long-grain rice, a record high, with Thailand supplying nearly 71,000 tons, also a record high. Almost all of Thailand’s long-grain exports to the United States are of its premium jasmine variety, an aromatic rice.

On the 2019/20 use side, the all-rice total domestic and residual use forecast was raised 2.0 million cwt to 135.0 million cwt, still 6 percent below a year earlier. The upward revision was based on the higher import forecast. The long-grain domestic and residual use forecast was raised 2.0 million cwt to 101.0 million cwt, still 7 percent below a year earlier.

The 2019/20 all-rice export forecast was lowered 2.0 million cwt to 96.0 million cwt, still almost 3 percent larger than a year earlier. The downward revision this month was based on Census export data through April, data from the weekly U.S. Export Sales report through May 28, and expectations regarding sales and shipments the remainder of the market year. In addition, U.S. prices are uncompetitive with South American exporters, as U.S. prices have remained firm in the face of extremely tight supplies as the market year comes to a close.

On balance, these supply and use revisions resulted in a 1.5-million-cwt increase in the 2019/20 ending stocks forecast to 32.0 million cwt, still nearly 29 percent below a year earlier. All of the revision in stocks was for long-grain stocks, which were raised 1.5 million cwt to 16.2 million cwt, 50 percent below a year earlier and the second-smallest since 2003/04.

There were no changes this month to the 2020/21 season-average farm-price forecasts (SAFP).

The long-grain 2020/21 SAFP remains projected at $11.80 per cwt in 2020/21, down 30 cents from the revised 2019/20 SAFP of $12.10. The decline in the long-grain SAFP that is projected for 2020/21 is based on larger U.S. supplies and lower global trading prices as restrictions and logistical limitations resulting from the COVID-19 ease.

The 2020/21 southern medium- and short-grain SAFP remains projected at $11.80 per cwt, up 10 cents from the revised 2019/20 SAFP. Little, if any, increase in exports of southern medium- and short-grain rice is projected for 2020/21, continuing the quite low level of 2019/20 exports, with North Africa and the Middle East not buying U.S. southern rice.

The California 2020/21 medium- and short-grain SAFP remains projected at $18.00 per cwt, down 10 cents from the revised 2019/20 SAFP. Both production and export of California medium- and short-grain rice are projected to be similar to the 2019/20 levels, with plantings indicated up slightly. In the global medium- and short-grain market, Australia is expected to increase exports next spring due to a projected crop recovery, likely pressuring prices lower toward the end of the 2020/21 market year.

The U.S. medium- and short-grain 2020/21 SAFP is projected at $16.00 per cwt, down 10 cents from the revised 2019/20 SAFP. The 2020/21 all- rice SAFP remains projected at $12.90 per cwt, down 20 cents from the revised 2019/20 all-rice SAFP.

There were small revisions this month to the 2019/20 U.S. SAFP for each class of rice and for all rice. The revisions were primarily based on NASS-reported cash prices through April and expectations regarding prices the remainder of the 2019/20 market year.

The long-grain 2019/20 SAFP was raised 10 cents to $12.10 per cwt, the southern medium- and short-grain SAFP was reduced 10 cents to $11.70 per cwt, and the California 2019/20 SAFP was raised 10 cents to $18.10 per cwt. These revisions raised the U.S. 2019/20 medium- and short-grain SAFP 10 cents to $16.10 per cwt and raised the all-rice 2019/20 SAFP 10 cents to $13.10 per cwt.

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