Rice Outlook: What size U.S. crop in 2007?

How big will the U.S. crop be in 2007?

Extension workers from the six rice producing states looked into their crystal balls during the 2006 USA Rice Outlook Conference in Las Vegas this week, offering an early indication about how plantings might run.

Several states will likely increase plantings in 2007 after a general decline in 2006. But Arkansas, which accounts for about half the nation’s crop, will likely reduce its plantings in 2007.

Higher production costs continue to be a factor. Higher prices for other commodities also might draw some acreage away from rice.

CALIFORNIA: “We expect the crop in 2007 to be very similar in size to this year’s, which was about 526,000 acres,” said Christopher A. Greer, University of California Extension Farm Advisor, Colusa. “Short of some major weather problem, I would say it could run about 550,000 acres for ’07, maybe a little higher. Hopefully, we won’t go back to having 590,000 acres.”

Medium grain prices continue to be high after two below-average crops in the state, plus a prolonged drought that has cut deeply into potential yields for Australia, one of California’s main competitors in the medium grain market.

ARKANSAS: Bobby Coats, Extension Ag Economist said that Arkansas would likely a 1.309-million-acre crop in 2007. That would be a 6.5% decrease from 2006 and a 20% decline from 2005. Long grain plantings will be down 6% from 2006 and medium grain acreage would decline 11% from 2006.

Arkansas produced about 49% of this country’s rice in 2006.

Overall, Coats was guardedly optimistic. World consumption remains strong and commodity prices, overall, are becoming more attractive to large investors and funds. North American ending stocks are below the previous two marketing periods and Latin American ending stocks are below the last three marketing periods. East Asian ending stocks are below three of the last four marketing periods, and south Asian and southeast Asian stocks “are dangerously low.”

“There remain pricing opportunities, I believe, for the 2006-07 year,” Coats said. “Uncertainty exists, as well. The rice biotech issue is a factor, and it will take time to identify its full impact.”

If speculators and funds start jumping in and out of the market, that will increase volatility. Coats emphasized the need for professional marketing assistance.

LOUSIANA: Johnny Saichuk, the state’s rice specialist, said that Louisiana’s plantings would be up in 2007. “I don’t believe they will reach 500,000 acres, though,” he said.

In 2006, the state had the smallest planted acreage since 1914. The economics of production reduced grower’s willingness to aggressively plant rice. Combined with that were the acres that couldn’t be cropped due to saltwater contamination after Hurricane Rita in 2005. In south Louisiana, where a large part of the rice is grown on rented land, many growers opted to reduce their plantings.

Louisiana also was the only state that didn’t post above-average yields in 2006. Cercospera hit the south Louisiana crop at levels not seen before, and herbicide drift also cut into averages.

One point that might limit plantings in 2007 is lack of a ready substitute for Cheniere, the variety pulled for 2007 due to biotech contamination. About 24% of the state’s crop was planted in Cheniere in 2006, mostly on lighter soils because of its resistance to straighthead.

MISSISSIPPI: For 2007, the state’s acreage will probably not fall below the 2006 level of 190,000 acres and could be as much as 220,000, which has been a fairly consistent crop size before reductions in 2006. That’s according to Steve Martin, Extension Economist.

Mississippi’s planted acreage for 2006, in fact, was down 25% from the 2005 plantings, compared to a 20% decrease for the U.S. rice crop during the same period, Martin noted.

One positive note is that rice prices are up, Martin pointed out. While U.S. rice exports are down, Martin said that overall production declined in 2006 due to reduced acreage. “In a relative comparison (of available rice to export history), we’re in relatively good shape,” he said. “Hopefully, some of these other issues (GMO rice restrictions) will be cleaned up and exports will expand.”

High prices for corn and other commodities might cut into Mississippi acreage some, he added. The state’s 2006 planting were probably down by 75,000 acres simply because of higher fuel and fertilizer costs, he said. The trend for urea prices seems to be down a bit, he said.

When he ran comparisons of other crops and rice at three different price levels, rice held up well, plus its yields tend to be more consistent than those for other crops.

MISSOURI: The state’s acreage has trended upward for years, but it’s too early to say whether that will continue in 2006, said Andy Kendig, a University of Missouri Extension weed scientist. There were indications that 2006 plantings would decline. But when all the acreage was added up, the state’s crop was about the same size as the one in 2005, he noted.

About 20% of the 2006 crop was planted in Cheniere, and the lack of a ready substitute for planting on lighter soils might swing some land out of rice, he speculated. But much of the state’s crop is grown on precision graded land

TEXAS: The state planted 148,000 acres in 2006, and the 2007 crop is expected to increase by 8% to 10%, said Ted Wilson, director of the Texas A&M at Beaumont. Based on early ratoon crop reports, the 2006 Texas crop could be one of the best on record, Wilson said.