Louisiana rice crop better than expected

The 2014 Louisiana rice crop is better than we expected "but not as good as last year," said Johnny Saichuk, LSU AgCenter rice specialist.

The crop had its hurdles with a cool spring and a wet, muddy harvest. But Steve Linscombe, director of the LSU AgCenter Rice Research Station said the summer nights were not excessively hot, and that probably resulted in good yields and outstanding grain quality.

Linscombe said the 2013 crop year had perfect weather throughout the growing season, but the 2014 crop was challenged by weather at the start with a cool, wet spring, and a wet, muddy harvest. "In spite of that, our 2014 is going to be a good crop," he said.

Disease was not bad this year, even with heavy rainfall. The Rice Research Station recorded 33.6 inches of rain between May and August, compared to 13.2 inches for the same time period last year.

Linscombe said a large amount of south Louisiana acreage will be grown for a second crop, even though much of it was cut after the recommended Aug. 15 cutoff. "Some of the ratoon looks extremely good," he said.

Linscombe said more medium-grain rice was planted this year, in the range of 60,000-65,000 acres, because of the 150,000-acre reduction in California where drought resulted in a water shortage.

Linscombe said the usual decline in yields toward the late part of the harvest in south Louisiana was not as striking as usual. "The rice we were cutting in late August and early September was still yielding well. In the first week of September, we still had farmers cutting more than 60 barrels with good quality," he said.

Keith Collins, LSU AgCenter county agent in Richland Parish, said he first thought this year's crop in north Louisiana would be average. But as the harvest progressed, he has changed his mind.

"I think we're going to have an above-average crop," he said, adding that yields could be as good as last year's record crop.

He said many varieties are yielding just under 200 bushels with few reports of low quality milling.

But, he said, getting the crop out of the fields has been difficult with muddy conditions.

Keith Fontenot, LSU AgCenter county agent in Evangeline Parish, said the crop in his area has been good.

"We have had some producers who exceeded last year's crop," he said.

Fontenot said farmers are facing a stagnant market with low prices and not much rice being bought. "There's no movement of rice right now," he said.

Andrew Granger, LSU AgCenter county agent in Vermilion Parish, said the crop there resulted in above-average yields, but not quite as good as last year. But, he said, the wet harvest conditions have reduced the second crop for many farmers.

Rice prices are becoming an issue, making it difficult for some farmers to get financing for next year's crop, he said.

Rice Market: More Medium Grain Planted if California Stays Dry

Export sales are picking up, with this week’s postings totaling 65,100 tons. Long grain took the lion’s share.

There were also 2,000 tons of medium/short milled sold to Jordan and 600 tons sold to Australia out of the 2014/15 crop. This is the second time we have seen very early sales of medium/short sold out of next year’s production, and we wonder if these are buyers trying to assure supplies out of next year’s potentially water-deficient planting in California.

India's wheat, rice exports raise hackles at WTO

The US, Canada and Pakistan have questioned India's export of wheat and rice, suggesting that subsidized grains have been shipped out providing gains to local traders.

The queries at the World Trade Organization (WTO) come weeks after these countries reluctantly agreed to India's demand for renegotiating the agreement related to food subsidies that turned into a make-or-break issue at the Bali ministerial meeting in December.

The government has denied the suggestions and said that India is complying with all international norms. "We are on the right track," said a top government official, dismissing the charges.

California rice crop will suffer from drought

Pat Kennedy is not a popular man.

As the water operations superintendent for Glenn-Colusa Irrigation District, Kennedy had the displeasure Monday of reinforcing what rice farmers already knew — that the 2014 drought could be the worst natural disaster for California crops in history.

The lack of rain and snow this winter in Northern California is worse than the dry times of 1976 and 1977, when another long ridge of high pressure kept winter storms from reaching the state.

"When the well's dry, the well's dry," said Kennedy, referring to Lake Shasta, from which water flows to irrigate a variety of crops under GCID contracts.

As of Sunday, Lake Shasta was at 54 percent of average, and 36 percent of capacity, and suffering the most will be rice, alfalfa and irrigated pasture land, Kennedy said.

About 45 Northern Sacramento Valley rice farmers gathered Monday in Glenn for their annual growers meeting, one of four sponsored by the University of California Cooperative Extension.

Two remaining meetings will be held Friday in Colusa and Yuba City.

Without sufficient rainfall in February and March, Kennedy said farmers could face more than just the 25 percent reduction in water required by their settlement contracts during dry years.

Even now, Kennedy said the Bureau of Reclamation is being "tight-lipped" about exactly how much water might be available.

At best, GCID is looking at delivering about 618,750 acre-feet of water to this season's crops, down from 770,000 in 2013 and 696,000 in 2012.

Farmers say even with the pool of rain expected in from Hawaii this week, they are not optimist that there will be sufficient water to plant even 75 percent of their fields.

The needs of irrigated crops fall behind those for fish, wildlife refuges and other social and environmental concerns, and competition for water is far greater than what water users had to compete with in the 1970s, said Willows farmer John Amaro.

"I will be lucky if I get 50 percent of my water," Amaro said after the meeting.

Amaro, a former Glenn County supervisor, expects the 2014 drought to have far-reaching effects, and could be devastating to the state and the community, which relies so heavily on an agriculture economy.

GM rice importers arrested in Turkey

Turkish media reports that individuals from three companies in the rice import business have been arrested for failure to comply with Turkey's biosafety law, alleging that rice imported by these firms and placed on the Turkish market contains unapproved genetically modified (GM) traits. Two of the companies are involved because of imports of U.S. medium-grain paddy rice from the Mid-South.

No GM rice is produced commercially in the U.S.; the Liberty Link GM trait found in the commercial long-grain supply in 2006 has been effectively eliminated; and no GM traits have ever been detected in U.S. medium-grain rice. The U.S. embassy in Turkey has communicated to senior levels of the Turkish government the lack of GM rice production in the U.S. and the embassy's great concern over the lack of rigor in the sampling and testing of imported U.S. rice for GM presence. Several of the U.S. rice cargoes in question have undergone multiple GM tests, with legal action being taken following a positive test result. Turkey's biosafety law prohibits importing and placing on the market agricultural goods containing unapproved GM traits, even if those traits are at low levels and caused by in-transit contamination from a previous cargo containing a GM product.

Turkey imported 147,757 metric tons of U.S. rice in 2012, valued at $63 million. Consumers in Turkey prefer medium-grain rice, and importers source from the mid-South and California. Paddy rice predominates, and accounted for 72 percent of total imports from the U.S. last year.

USA Rice will continue to assist the Office of Agricultural Affairs at the U.S. embassy and to educate customers and consumers in Turkey about U.S. rice's high quality, safety and lack of GM presence.

Rice prices set to ease on record rabi output

India, the second largest producer of rice, accounts for 19.70 per cent of global production. Wi­thin India, rice occupies one-quarter of the total cultivated area and accounts for about 40 to 43 per cent of total foodgrain production. The average retail price of rice h­a­s shot up by around 48 per cent in the past two years to Rs 1,942 per q­u­­in­tal. In the south, it has surged by ap­­­p­­roximately 60 per cent over the sa­­me period. Ashish Kapur, chief ex­ec­utive officer of Invest Shoppe, says altho­u­g­h rice prices have witnessed strong growth in the recent past, one ca­n expect prices to ease in the near term on the back of record rabi crop production. Earlier, rice production had slu­mped around 10 million ton­nes in the kharif season as drought plagued over one-third of the country, prompting the government to bo­ost the public di­stribution system a­n­d intervene in the market to check the price rise. The go­vernment also said that if required, it would undertake an open-market intervention, w­­h­­ich means that the government m­­­­ay buy more to build adequate res­erves and strengthen the public distribution system for any contingencies. According to latest estimates, India is the world’s fifth largest rice exporter. The country is likely to ex­p­ort 20 lakh tonnes of rice in 2009-2010, which is the same as last year. Th­ailand, which is world’s lar­gest rice ex­porter, acc­ounts for aro­und 85-100 l­akh tonnes of shipme­nts per year, followed by Vi­etnam (55 lakh tonnes), the US (31.50 lakh to­n­­nes) and Pa­kistan (around 38 lakh tonnes). Since the beginning of the year, the price of rice has plunged more than 19 per cent on the Chicago Board of Tra­de (CBOT). Anand James, chief analyst, Geojit Comtrade, said, “The US dep­artme­nt of agriculture’s forecast for incr­eased 2010 plantings is seen as one of the reasons for the steep fall in ri­ce prices in CBOT since January. Ho­w­ever, prices have already been under pressure for some time also due to the rise in supply from the world’s top two exporters — Thailand and Vietnam. Thailand is about to har­vest the se­c­ond crop, which, as per Thailand’s agriculture ministry, cou­ld produce roughly 7 million tonnes.” Expectations of a further rise in supply has brought prices of Th­a­ila­nd’s B-grade white rice to as low as $510, a drastic fall when compa­red with the record of $1,080 per tonne quoted in April 2008. Recently, prices have found some respite from sharp falls due to stockpiling by the governments of Thailand and Vietnam. Short covering in CBOT was also seen in the past few sessions as margins were eased on rice futures, am­o­­ng some other commodities. Rice procurement by the Indian go­v­ernment has crossed 25 million to­n­­nes in the ongoing 2009-10 kh­arif marketing season, nearly 2.9 mi­llion tonnes short of target. According to official data, total rice purchased by the Food Cor­poration of India (FCI) and state ag­encies stood at 25.13 million tonnes so far this season, against 25.57 million tonnes in the previous season. The world’s total trade in rice is estimated aro­und 30,845,000 tonnes for 2009-10, wh­ich is 7 per cent higher than last ye­ar’s 29,029,000 tonnes. The ban on exports of non-basmati rice may continue indefinitely and sc­rap duty on imports will enc­ourage pr­ivate imports of the grain. The area planted with rice in the South Asian nation this year is 7 million hectares, less th­­an a year earlier, and may lead to a drop of 16 to 18 million tonnes of mo­nsoon-sown rice output. Rice ranks as the third principal st­aple food in the world after wheat and maize. The country’s rice demand is projected at 128 million tonnes by 20­12, which requires a production level of 3,000 kg per hectares, much higher than the present average of 1,930 kg per hectares. So, in the medium to long run, we ma­y face a demand and supply mismatch that continues to support prices at lo­wer levels. CBOT benchmark May rice contract continued to fall from a high of $16.45 per hundred pounds on Dec­ember 14, 2009 to a low of $12.12 on Ma­rch 31, 2010. “This pressure is seen amid te­c­h­nical selling and the US departm­ent of agriculture’s fore­cast for inc­reased 2010 plantings in Am­erica. St­r­ong support was seen at $11.90 and $11.20. May futures are likely to rem­ain under pressure as long as resistan­ce is seen at $12.90,” Vibhu Ratand­hara, assistant vice-president at Bon­anza Commodity, said. At present, rice futures are not tr­a­ded on any of the Indian commodity exchanges.

Opportunities for U.S. rice exports

The current rice market is cramped, with more rice in projected carry-over than in previous years. “We are still in a very tight situation. We’re in a bubble and if there are any problems in any of the major rice-producing countries, things could change rapidly,” said Riceland Foods’ Carl Brothers. Regarding international politics and economics, rice remains king — the food staple of the world. Rice production worldwide is at 439 million metric tons, with the U.S. producing 2 percent of that total. However, U.S. rice producers play a far greater role in the rice trade than the 2 percent tag implies. U.S. rice significance carries tremendous weight in regard to the export market — as the third largest rice exporter in the world. As recently as 1980, the U.S. was the No. 1 rice exporter globally, but is now ranked behind Thailand and Vietnam. Despite ever-increasing tons of rice produced, only a small percent is traded internationally. As glaring examples: China and India are the two largest world rice producers, yet their domestic consumption leaves little for export. Speaking at the Mid-South Farm & Gin Show, Memphis, Tenn., Carl Brothers presented an update on the condition of the world rice market, and detailed opportunities for U.S. rice producers. Brothers, senior vice president, Riceland Foods, Inc., Stuttgart, Ark., says the current rice market is cramped, with more rice in projected carry-over than in previous years. “We are still in a very tight situation. We’re in a bubble and if there are any problems in any of the major rice-producing countries, things could change rapidly, as happened in 2008, when concerns took prices to over $1,000 per ton.” The outlook for U.S. rice continues to be brighter for medium-grain. Despite overall planted rice acres in 2009 up 5 percent, long-grain acreage dipped 3 percent, and Brothers says medium-grain compensated for the long-grain drop. “Total U.S. long-grain acres were down 3 percent. If you turn and look at medium-grain acres, the picture is quite different. We doubled our medium-grain acreage in 2009 — going from 101,000 up to 226,000 — a 124 percent increase.” Louisiana played a significant role in the medium-grain gains, with acreage increasing 267 percent. Despite Southern medium-grain increases, California medium-grain quality continues to dominate the U.S. market. California’s 2009 medium-grain crop, while not a record, was substantial and continues to draw high prices when matched up against the South’s product. Why? “They’ve got a better product than we have ... I really hate to say that, but if you compare the California Calrose with the Southern medium-grains being produced, there is a big difference. “If you were going in and buying them yourself, I think you would choose the Calrose. We’re working with experiment stations to address that, and would like to get closer to California quality with the product that we produce in the South,” says Brothers. The high-quality Calrose allows California entrance to foreign markets not accessible to Southern medium-grain. “The Japanese are not interested in Southern medium-grain. The Taiwanese, although we got a small amount in there this year, are not very happy with it. I think they mostly bought trying to break the California market.” Even with California dominance, the increased Southern medium-grain acres have found a buyer in close proximity — Puerto Rico. “We will supply Puerto Rico this year and that’s going to be the savior of the almost doubling of the size of the Southern crop. Puerto Rico will return to the South for their medium-grain needs and that will pretty much clean up the Southern crop, although there will be medium-grain carried over, but principally in California.” Brothers noted that Puerto Rico consistently buys its rice from the cheapest source available. But with the vagaries of the global rice trade — a prolonged Australian drought, an Egyptian export ban, and a Chinese pullback — the Puerto Ricans have turned to the U.S. for rice. “Most of that rice is coming out the Southern United States and not California.” Rice opportunities • Iraq remains a key for U.S. rice exports, according to Brothers. In January, the Iraqis balked after Thailand overvalued its rice crop, resulting in an Iraqi purchase of 100,000 metric tons from the U.S. Iraq is currently looking to buy again. Brothers says prices have been offered to the Iraqis and a response is forthcoming. He is not confident of a spring rice sale to the Iraqis. “We’re probably not quite as optimistic about Iraqi business as we were the time before. The time before was right in the period when the Philippines was buying up rice for their shortfall and excited the Asian rice crop. The Thais got pie-in-the-sky ideas about what the value of their rice was, and they let us slip in. “I think that will be one of the best U.S. sales all year — the previous one to Iraq. But this time the feeling is the Thais have woken up.” • In addition to Iraq, Nigeria is a strong focus of the U.S. rice industry. During the 1980s, Nigeria was a strong importer of U.S. parboiled rice. With incessant political instability and a population of over 150 million, domestic rice demands march in tune with Nigeria’s economic pulse. Higher rice prices in Asia have factored heavily on Nigerian import decisions. “Nigeria has been a welcome return for us ... We lost that market to the Asians. With the Asian price run-up in recent months, they’ve returned to the U.S. and I hope we can catch them on our quality — seeing a difference — and we can take over the Nigerian market.” • In Europe, the hurdles for U.S. rice continue to revolve around the GE controversy. Brothers says a reasonable tolerance policy is needed when testing for GE identification. With common conveyance and shared harvesting equipment (rice, corn, wheat and cotton fiber) the probability of positive GE readings remains high. “These tests are so sensitive they are going to pick that up. So we need a low-level presence policy, which basically I would call it a tolerance. They don’t call it a tolerance — no GE being allowed in Europe — so they call it a low-level presence policy,” details Brothers. A low-level presence policy would afford the U.S. valid latitude in accounting for traces of genetically engineered products. For U.S. rice producers, it would offer a variance from Europe’s zero tolerance of GE products — essentially interpreting zero as 0.1 or higher. “The first thing they’ve suggested they would do would be to find a technical answer ... What they’re suggesting is to further define zero as 0.1, 0.2, 0.3. If we could get that type of low-level presence, I think we would have a greater opportunity to get our product into the European Union. So we are going to keep pushing on that.” • As for Cuba, diplomatic channels continue to clog. Despite rumors of agreements and relaxations, no benefit to U.S. rice growers appears imminent. “Cuba is slower moving than we’d like. There are several deals in Congress suggesting a relaxing of the situation, mostly about travel and payment. The Cubans got really irritated with us when we typed up the payment restrictions about a year and a half ago, and they haven’t bought anything from us since. “They are just upset with us and our politics. We think the atmosphere is the best that it can be to see something happen with Cuba,” states Brothers. • Regarding Brazil, Brothers says weather, similar to what U.S. growers dealt with last year, had a heavy impact on the 2009 Brazilian crop. He believes Brazil will curtail exports and hold rice for domestic consumption — a boon to U.S. traders. “They’ll empty out Argentina, Uruguay, and then lastly they’ll come to the United States for rice. If that were to happen, I’d expect it to happen in mid to late summer. That one is worth watching.” Questions always linger in the global rice market, but U.S. growers have confidence in their product. Rice continues as a bellwether crop, unique in its relation to political climates. Brothers believes U.S. producers must be vigilant and continue moving forward. “No one stands still, and we’ve got to keep getting better; keep increasing our yields, lowering our costs, doing everything we can to stay competitive. The Asians are after our business and we’re going to have to fight as we go along. If we relax at any time, then I think we get run over. “The numbers that I see from the rice industry look very promising for continuing to grow rice, protecting our infrastructure, and employing people. We’ve seen some other industries struggle in that respect.”

Iraq purchases U.S.-grown rice

The USA Rice Federation reports that Iraq recently purchased 100,000 metric tons of U.S. long-grain rice in its latest tender.

Historically, Iraq has been a sporadic but rather large market for U.S. rice. From a high of 385,000 metric tons in 2005-06 to 121,000 metric tons last marketing year, this 100,000 metric tons sale, said USA Rice, “demonstrates that this is a market that must be taken seriously.”

USA Rice is building relationships with the Iraqi Grain Board and the Ministry of Trade.

Almost all the imported rice is distributed through a ration system administered by the Iraqi government and all purchase decisions are made by the government.

Due to the security situation, USA Rice does not have an active promotions program in Iraq.

The U.S. Embassy in Baghdad plans to take a contingent of Iraqis to the Gulfood Show in Dubai, United Arab Emirates on Feb. 21-24. USA Rice is exhibiting at the event and “will interact with the members of the U.S. Embassy-sponsored team to promote more purchases of U.S.-grown rice.”

US promoting Calrose in Japan

Japan opened its rice market only in 1995, and the government still tightly controls the inflow of foreign rice, keeping tariffs for rice at 770%.

Most of the 770,000 tons of rice Japan imports a year end up as foreign aid, processed for crackers or sitting in storage. Only a small amount reaches consumers in restaurants and supermarkets.

Recently, U.S. rice has been losing to cheaper Chinese rice, tumbling in market share from 70% of Japan's foreign rice a decade ago to 20%, according to the federation. "If given a fair opportunity in the Japanese market, Calrose rice will be accepted and successful," said USA Rice Federation official Christopher Crutchfield.