Milling & Baking News - December 5, 2017 - 28

Data

U.S. rice prices advance sharply
amid steep production decrease

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Milling & Baking News

combined 2,103,000 acres in the six rice states of Arkansas, California, Louisiana, Mississippi, Missouri and Texas,
while harvested area for soybeans and cotton increased a
combined 2,015,000 acres, according to U.S.D.A. data.
Some rice acreage losses also resulted from heavy rains

178.4

224.1

193.1

222.2

190.0

199.9

184.9

243.1

219.9

203.7

198.4

222.8

194.6

U.S. rice production
in million cwts

KANSAS CITY - U.S. rice production is estimated down
20% from 2016 while nearby rough rice futures traded in Chicago were up nearly 30% from a year ago in late November.
The drastic reduction largely was the result of reduced
planted and harvested area as rice (as well as corn and sorghum) lost acreage mainly to soybeans and cotton due to
relative prices when planting decisions were made earlier
in the year. Slightly better national average rice yield provided some offset to lower acreage.
Rice prices were declining in March while soybean prices
were rising, Nathan Childs, Ph.D., an agricultural economist with the U.S. Department of Agriculture, said earlier
in the year, and U.S. rice carryout for 2017 at the time was
forecast at more than a 30-year high.
The U.S.D.A. in its November Crop Production report
estimated 2017 U.S. rice production at 178,382,000 cwts,
down 5% from its initial forecast in August, down 20%
from 224,145,000 cwts in 2016, down 13% from the recent
five-year average and the lowest since 1996. A record crop
of 243,104,000 cwts was harvested in 2010. Harvested area
was estimated at 2,391,000 acres, down 706,000 acres, or
23%, from 2016 and the lowest since 1987. Average yield
based on Nov. 1 conditions was estimated at 7,461 lbs per
acre, up 3% from last year.
Harvested area for rice, corn and sorghum declined a

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Source: U.S. Department of Agriculture

and flooding related to Hurricane Harvey in Texas and
Louisiana. Although much of the crop was harvested when
the hurricane hit, there were significant losses to the second harvest, known as the ratoon crop, the U.S.D.A. said
in its November Rice Outlook. Additional acreage was lost
to flooding earlier in the year in top-producing Arkansas,
which accounted for about 60% of the total reduced harvested area.
The nearby January rough rice future closed at $12.42 a
cwt on Nov. 24, up 29% from a year ago and up 20% from
the first of the year but below September highs above $13 a
cwt. Rice futures last week neared $13 a cwt in the July 2018
contract and didn't drop below $12 until the new 2018 crop
November contract.
In its November World Agricultural Supply and Demand
Estimates report, the U.S.D.A. forecast the average farm
price of all rice in 2017-18 (August-July) at $12.50 to $13.50 a
cwt, with the midpoint up $2.60 a cwt, or 25%, from $10.40 a
cwt a year earlier and compared with $12.20 a cwt in 2015-16.
The U.S.D.A. in its WASDE forecast carryover of rice on
Aug. 1, 2018, at 29.9 million cwts, down 35% from 46 million cwts in 2017 and the lowest since 2007-08.
Unlike wheat, corn and soybeans, the United States is not a
major producer of rice on the global stage, missing the top 10
by a couple of slots. Still, the United States exports about 55%
of its rice production (similar to wheat and soybean export
percentages). But the United States also imports a substantially larger share of its rice supply (about 10% of total supply
and about 20% of domestic consumption) than the other commodities mainly due to the classes of rice produced and the
varieties desired by consumers. The U.S.D.A. forecast U.S. rice
imports in 2017-18 at a record 24.5 million cwts.
Despite the sharp decline in U.S. rice production, global
supplies are ample after record outturn of 486.57 million
tonnes in 2016-17. Though forecast production for the
current year is down 1% from last year at 481.20 million
tonnes, 2017-18 ending stocks at 141.51 million tonnes are
the highest since a record 146.7 million tonnes in 2000-01.
Looking ahead, the U.S.D.A. in its preliminary longrange projections released last week forecast 2018 U.S. rice
planted area at 2,900,000 acres, up 17% from 2017, and harvested area at 2,878,000 acres, up 20%, though both still are
below 2016 acreage. Production next year was forecast at
220,200,000 cwts, up 23% from 2017. The average farm price
was forecast to decline 5% to $12.30 a cwt in 2018-19. MBN
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - December 5, 2017

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