Rice: Look For Price Softening

Rice maturing near Beaumont. Photo: Kathleen Phillips, Texas AgriLife Extension

USDA released its much-anticipated June acreage report, and the results weren’t too surprising, with U.S. long-grain acres increasing 414,000 or 23% from last year. All the major rice-producing states increased acreage in 2020.

Arkansas increased long-grain acreage by 300,000 acres or 32% over 2019. The complete breakout by class for Arkansas is 1.25 million acres for long-grain, 180,000 acres for medium-grain and 1,000 acres for short-grain.

As we’ve talked about recently, the results of the June acreage survey will be used in the production estimates of the upcoming July 10 WASDE (ie. supply/demand report).

How will the June acreage impact the 2020 balance sheet for long-grain? Answering this question requires a look at the differences between the 2020 March Prospective Plantings and the June acreage report.

Likely due to the price disparities this spring between rice and competing crops, NASS indicated that long-grain acres increased a bit (92,000 acres) from the March intentions.

Arkansas added 60,000 acres. California, Missouri and Texas collectively added another 32,000 acres, bringing total long-grain planted acres to 2.192 million. Of this total, USDA anticipates that 2.156 million will actually be harvested.

Incorporating these acreage adjustments into the July WASDE will increase 2020 long-grain harvested acreage by 86,000. Applying the same U.S. average yield used in the prior two monthly S/D reports, one could anticipate USDA’s July production estimate to increase by 6.3 million to 161.8 million cwt.

Without any adjustments to demand, this increase in production would push projected ending stocks up to 27.5 million cwt.

Given that, expectations for 2020 average farm prices will likely begin to soften in the July WASDE from USDA’s June estimate of $11.80/cwt.

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