Agricultural and Food Policy
Agri Outlook
Radio
Number 44
USDA’s initial assessment of U.S. rice crop supply and demand prospects released. (4:57 minutes)
Audio/Video Script:
Dr. Bobby Coats
Extension Economist
University of Arkansas, Division of Agriculture
USDA’s initial assessment of U.S. rice crop supply and demand prospects
released. I’m Bobby Coats Extension
Economist University of Arkansas Division of Agriculture.
USDA’s initial assessment of U.S. rice crop supply and demand prospects
shows 2007 all rice production projections
of 183 million cwt. This is 5 percent below the 2006 marketing period, 18
percent below the 2005 marketing period and the smallest all rice production
since the 1997 marketing period.
Reduced 2007 all rice production is due to the added cost of production, lack
of long grain pricing opportunities, crop alternatives for Mississippi River
Valley Delta producers, trade barriers, and the biotech rice issues.
On imports: The 2007 marketing period all rice imports are expected to continue
problematic with a record 21.0 million cwt projected to be imported. This is up
2 percent from the previous marketing period and up 23 percent from the 2005
marketing period. Rice imports in the 2007 marketing period will represent 8.7
percent of our U.S. total rice supply.
On farm price for rice: With tighter domestic supplies and higher global price expectations USDA
raised its 2007/08 U.S. all rice season average price for 2007/08 to $10.25 to
$10.75 per cwt ($4.61 per bushel or $4.84 per bushel).
Turning to U.S. long grain rice production, long grain production is
projected the lowest since 2000 marketing period. It is projected down 8.3
percent from the 2006 marketing period at 134 million cwt. and down 24.5 percent
from the record set in the 2005 marketing period. Total long grain rice
production still is the 9th largest on record.
On long grain supply: Total long grain rice supply is estimated at 177 million cwt, which is down
9 percent from 2006 marketing period. Total supply is still the 6th largest on
record.
On long grain rice exports: 2007 marketing period U.S. long grain rice exports at 71 million cwt are
estimated down 7 percent from 2006 marketing period and down 24 percent from
2005 marketing period. The 2007/08 projected volume of U.S. long grain rice
exports resembles the 1997 to the 2001 marketing periods, which actually represents a more
normal level of export activity.
On long grain ending stocks: 2007 marketing period U.S. long grain rice ending stocks at 17 million cwt
are estimated down 40% from the 2006 marketing period and down 49% from the 2005
marketing period. Long grain rice ending stocks are the 11th lowest since the 1982 marketing
period but only the sixth lowest since the 1988 marketing period.
Bottom line: Until recently I was more concerned with U.S. long grain rice
price weakness than with price strength. Presently, I give the edge to the
upside given the bullish U.S. and global long grain fundamentals. That said, the
commodities making up the commodity market continues to display a significant
amount of price volatility and uncertainty, due to the dynamics of the global
economic setting. I continue to believe professional marketing assistance is
advisable from co-ops or individual marketing professionals.
This has been Bobby Coats Extension Economist University of Arkansas Division
of Agriculture.
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