USDA U.S. Department of Agriculture - December 13, 2004
Rice YEARBOOK -- TEXT December 10, 2004
November 2004, ERS-RCS-2004
Approved by the World Agricultural Outlook Board
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This TEXT is published by the Economic Research Service, U.S. Department of
Agriculture, Washington, DC 20036-5831.
The summary was released on November 30, 2004. The complete report will be
available electronically in about a month.
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Rice Situation and Outlook Yearbook. Market and Trade Economics
Division, Economic Research Service, U.S. Department of
Agriculture, November 2004, RCS-2004.
Contents
Summary
U.S. Outlook for 2004/05
Bumper Crop, Record U.S. Supplies Projected for 2004/05
U.S. 2004/05 Ending Stocks Projected To Be the Highest Since
1986/87
U.S. Rice Market Faces Record Supplies and Higher Global
Prices
Recap of 2003/04 U.S. Rice Market
U.S. Season-Average Farm Prices Climbed 67 Percent on
Smaller Supplies
International Outlook for 2004/05
Global Trading Prices Rise on Tight Supplies, Thai
Intervention Purchases
Thailand, Vietnam, and India Are Projected To Ship Less Rice
in 2005
Global Rice Imports Are Projected To Decline 4 Percent in
2005
Report Coordinator
Nathan Childs (202) 694-5292
Economic Contributor
Nathan Childs (202) 694-5292
Managing Editor
Martha Evans (202) 694-5118
Layout, Text Design, and Graphics
Wynnice Pointer-Napper (202) 694-5130
Approved by the World Agricultural Outlook Board. Summary
released November 30, 2004. The Rice Outlook and the text of the
Rice Yearbook may be accessed electronically. For details, call
ERS Customer Service (202) 694-5050.
Rice Conversions
1 cwt = 100 pounds = 2.22 bushels = .0453 metric ton
1 metric ton = 2,204.6 pounds = 22.046 cwt = 48.992 bushels
1 cwt rough rice = .032 metric ton milled
1 metric ton milled = 31 cwt rough
Summary
Bumper Crop, Record Supplies
Projected for 2004/05 U.S. Rice Market
U.S. rice supplies are projected to increase 10 percent in
2004/05 to a record 265.8 million hundredweight (cwt) (rough
basis), as a record harvest more than offsets a smaller carryin
and a decline in imports. Long grain supplies are projected at
187.5 million cwt, up 7 percent from a year earlier. Combined
medium/short grain supplies are projected at 77.4 million cwt, an
increase of 17 percent and the largest since 1983/84.
At 23.7 million cwt, beginning stocks of all rice are nearly 12
percent below a year earlier and the smallest since 1999/2000.
Arkansas accounts for the bulk of the decline in beginning stocks
in 2004/05. Imports are projected at 14.5 million cwt, 7 percent
smaller than the year-earlier record. Medium/short grain accounts
for all of the projected decline in 2004/05 U.S. rice imports.
The 2004/05 (August-July) U.S. rice crop is forecast at a record
227.65 million cwt (rough basis), up 14 percent from a year
earlier, a result of both increased plantings and a record yield.
At 3.36 million acres, rice plantings are up more than 11 percent
from a year earlier and are the largest since 1999/2000. The
average yield is projected at 6,828 pounds per acre, up 3 percent
from a year earlier and the fifth consecutive year of a record
U.S. average field yield. Production is projected to be larger in
2004/05 for all three classes of U.S. rice--long, medium, and
short grain.
Rice acreage is projected larger in 2004/05 in all reporting U.S.
rice growing States except Mississippi where area is virtually
unchanged from a year earlier. Arkansas, California, and
Louisiana account for the bulk of this year’s 11-percent increase
in total rice harvested area, with California’s plantings one of
the highest on record. Strong prices at planting were behind the
2004 U.S. rice area expansion. Field yields are projected higher
for all reporting States in 2004 except Louisiana and Texas, with
record yields projected for Arkansas, Mississippi, and Missouri.
Rice production is projected larger this year in all reported
States, with record crops projected for Arkansas and California.
These two States account for the bulk of the projected increase
in U.S. rice production in 2004.
The 2004/05 U.S. season-average farm price (SAFP) is projected at
$7.00 to $7.50 per cwt, compared with $7.49 a year earlier. The
2003/04 SAFP was up 67 percent from a year earlier and the
highest since 1998/99. The price strength in 2003/04 was the
result of a 9-percent decrease in U.S. supplies and slightly
higher global trading prices. In 2004/05, downward price pressure
from a bumper crop and record U.S. supplies will be somewhat
offset by another year of stronger global trading prices. In
2004/05, the combination of tighter world rice supplies and
higher prices for Thailand’s intervention purchases of rough rice
from its growers are expected to push global trading prices
higher than a year earlier.
U.S. 2004/05 Ending Stocks Projected
To Be the Largest Since 1986/87
Total U.S. rice use in 2004/05 is projected at 224 million cwt,
up 3 percent from a year earlier and the second highest on
record. Domestic use (consumption plus the residual which
includes unreported losses in handling, processing, and marketing
and any statistical errors) accounts for the bulk of the
increase. Total domestic and residual use is projected to
increase more than 4 percent to 119 million cwt. Although still
increasing, the rate of growth in domestic consumption of rice
(food uses, beer, and pet food) has slowed since the mid-1990s.
Since 2001/02, growth in consumption has averaged less than 2
percent a year, down from 5 percent in the 1980s and 4 percent in
the 1990s.
U.S. rice exports in 2004/05 are projected at 105 million cwt
(rough-equivalent of both rough and milled rice exports), up 1
percent from a year earlier. Exports are second only to the
record 124.6 million cwt shipped in 2002/03. Record U.S. supplies
and a much smaller price difference over Asian competitors are
behind projections for increased U.S. rice exports in 2004/05. By
type of rice, U.S. rough rice exports are projected to decline
while combined milled and brown rice exports are projected to
increase. By class, a fractional decline in long grain exports is
projected to be more than offset by stronger medium/short grain
exports.
U.S. rough rice exports for 2004/05 are projected at 32 million
cwt, down 7 percent from a year earlier and more than 25 percent
below the 2002/03 record. Brazil accounts for most of the
expected decline in U.S. rough rice exports in 2004/05. Combined
milled and brown rice exports (on a rough basis) are projected at
73 million cwt in 2004/05, up more than 5 percent from a year
earlier. A big boost in U.S. supplies, a much smaller price
difference over Asian competitors, and a decline in exportable
supplies in several major Asian rice exporting countries--as well
as in Australia--are behind the projected increase in U.S. milled
rice exports.
U.S. ending stocks of all rice for 2004/05 are projected at 41.8
million cwt, up 77 percent from a year earlier and the largest
since 1986/87. A 10-percent boost in total supplies is projected
to more than offset a 3-percent increase in total use. A
carryover of this magnitude will keep U.S. rice prices under
substantial downward pressure for the remainder of the 2004/05
market year. The resulting stocks-to-use ratio is projected at
18.7 percent, up from 10.9 percent a year earlier and the highest
since 1992/93.
Long grain accounts for the bulk of the build-up in U.S. ending
stocks. Long grain ending stocks are projected to increase 127
percent to 23.4 million cwt, the largest since 2001/02. The long
grain stocks-to-use ratio is projected at 14.3 percent, up from
6.3 percent a year earlier. For medium/short rice, ending stocks
for 2004/05 are projected at 17.4 million cwt, up 41 percent from
a year earlier and the largest since 1986/87. The resulting
medium/short grain stocks-to-use ratio is projected at 26
percent, up from 23 percent a year earlier and the largest since
1992/93.
Tighter World Rice Supplies Push
Global Trading Prices Higher in 2004/05
Global trading prices have increased 7 percent since the start of
the 2004/05 market year in August and are the highest since
March. In mid-November 2004, Thailand’s 100 percent Grade B (FOB
vessel, Bangkok) was quoted at $262 per ton, up $12-$15 from a
month earlier and $26 higher than prices quoted in June. The
price increases this fall are due to tight exportable supplies in
Asia and higher prices for Thailand’s intervention purchases of
rough rice from its growers. Thailand began its intervention
purchases of its 2004 main-crop on November 1, and purchases will
continue through February when the main-crop harvest is over.
Quotes for Vietnam’s rice have recently increased as well, a
result of tight supplies and a full commitment to buyers of its
2004 export quota.
From late 2000 through 2003 Thailand’s export prices were the
lowest since the early 1970s. Not until China made large
purchases of non-fragrant rice in early 2004 did global prices
begin to rise. Prices declined during the spring as China delayed
delivery of the purchased rice and renegotiated some contracts to
stipulate a lower price. However, by mid-October 2004 trading
prices began to rise on tighter global exportable supplies and
announced higher prices for Thailand’s intervention purchases of
rough rice.
World rice production is projected at 398.3 million tons (milled
basis) in 2004/05, up 2 percent from a year earlier, but still 3
percent below the 1999/2000 record of 408.7 million tons. China
accounts for the largest share of the 2004/05 global production
expansion. Despite the larger production, global rice supplies
are projected to decline 3 percent in 2004/05, the third
consecutive year of smaller global rice supplies.
Global area harvested is projected at 149.7 million hectares,
virtually unchanged from a year earlier, but 5.5 million hectares
below the 1999/2000 record. Larger plantings in China are nearly
offset by smaller plantings in South Asia and South America. At
3.96 tons per hectare, the average global rough rice yield is
projected to be 2 percent above a year earlier and the highest on
record. Despite this year’s projected record average field yield,
yield growth since 1999/2000 has been negligible.
Among the major rice exporters, production is projected to be
higher in 2004/05 in China, the United States, and Pakistan. In
contrast, production is projected to decline in Thailand,
Vietnam, and India. Among the top Asian rice importers--
Indonesia, the Philippines, Malaysia, and Bangladesh--only the
Philippines is projected to increase production in 2004/05, with
a record rice crop forecast. For major non-Asian rice importers,
record crops are projected in 2004/05 for Nigeria and Iran.
Although Brazil’s 2004/05 production is projected to drop 9
percent from the year-earlier record, supplies are projected to
be the highest on record.
World rice consumption is projected at 412.4 million tons in
2004/05, fractionally below the year-earlier record. India
accounts for most of the decrease. In addition, rice consumption
is projected to slightly decline in 2004/05 in Japan, South
Korea, and Taiwan--a long term trend in all three countries, a
result of income-driven diet diversification. In contrast, record
levels of consumption--including the residual, or unreported
losses in processing and handling--are projected for China, the
Philippines, Bangladesh, Thailand, Vietnam, and Brazil. Both
Latin America (including Brazil) and Sub-Saharan Africa are
projected to consume record amounts of rice in 2004/05 as well.
With consumption exceeding production in 2004/05 by 14.1 million
tons, global ending stocks are projected to drop nearly 17
percent to 71.4 million tons. This is the fourth consecutive year
of declining global ending stocks and the lowest ending stocks
since 1983/84. The global stocks-to-use ratio is projected at
17.3 percent, down from 20.7 percent a year earlier and the
smallest since 1976/77. China accounts for the largest share of
this year’s expected reduction in global ending stocks. China’s
ending stocks have declined each year since 1999/2000 and are
projected to be the lowest in more than 20 years in 2004/05.
Global Rice Trade Is Projected
To Decline 4 Percent in 2005
Global rice trade in 2005 is projected to decline 4 percent from
a year earlier, the third consecutive year of declining global
rice trade. Rice trade would be the smallest since 2000 and 12
percent below the 2002 record of 27.8 million tons. Declining
Asian imports have accounted for the bulk of the weaker global
rice trade since 2004. Record and near-record crops in major
importing countries account for the decline in Asian rice
imports. In 2005, weaker imports by China, the Philippines, Saudi
Arabia, and South Africa are projected to more than offset larger
imports by Indonesia, Nigeria, and Turkey.
Among the top six rice exporting countries--Thailand, Vietnam,
India, China, the United States, and Pakistan--only the United
States and Pakistan are projected to increase shipments in 2005.
Thailand’s exports are projected to drop sharply from the 2004
record. India and Vietnam are projected to export less rice in
2005 as well. Among the medium-sized exporters, Argentina,
Australia, Burma, and Uruguay are projected to expand exports in
2005.
Global rice trade in 2004 is forecast at 25.4 million tons, down
almost 8 percent from 2003. In 2004, weaker imports by
Bangladesh, Brazil, Indonesia, Nigeria, the Philippines, and
Turkey more than offset greater imports by China, markets in the
Caribbean, Iraq, Malaysia, Saudi Arabia, South Africa, and Sri
Lanka. On the export side, big declines in exports from India,
China, and the United States more than offset record exports from
Thailand and larger shipments from Vietnam.
U.S. Outlook for 2004/05
Bumper Crop, Record U.S. Supplies Projected for 2004/05
U.S. rice supplies are projected to increase 10 percent to a
record 265.8 million hundredweight (cwt) in 2004/05, as record
production more than offsets a smaller carryin and a decline in
imports. At 23.7 million cwt, beginning stocks are nearly 12
percent below a year earlier and the smallest since 1999/2000.
The total rice harvest of 227.65 million cwt is 14 percent larger
than a year earlier, a result of both increased plantings and a
record yield. At 14.5 million cwt, imports are 7 percent smaller
than the year-earlier record. Long grain supplies, projected at
187.5 million cwt, are up 7 percent. Combined medium/short grain
supplies are projected to increase 17 percent to 77.4 million
cwt, the largest since 1983/84.
U.S. 2004 Rice Crop Projected
At a Record 227.7 Million Cwt
The 2004/05 (August-July) U.S. rice crop is forecast at a record
227.65 million cwt (rough basis), up 14 percent from a year
earlier, a result of both increased plantings and a record yield.
At 3.36 million acres, rice plantings are up more than 11 percent
from a year earlier and the largest since 1999/2000. The average
yield, projected at 6,828 pounds per acre, is up 3 percent from a
year earlier and is the fifth consecutive year of a record U.S.
average field yield.
Long grain accounts for the largest share of this year’s increase
in rice production. U.S. long grain production is projected at
166.9 million cwt, up 12 percent from a year earlier and the
second highest on record. Nearly all U.S. long grain rice is
grown in the South. Medium grain production is projected at 57.4
million cwt, an increase of 21 percent from a year earlier, with
California--where most of the U.S. medium grain crop is grown--
accounting for nearly all of the increase. Short grain
production, accounting for 1-2 percent of the total U.S. rice
crop, is projected at 3.39 million cwt, up 25 percent from
2003/04. California produces nearly all U.S. short grain rice,
and much of this crop is exported to Japan.
Strong prices at planting--especially for California medium grain
rice--and generally good weather across most producing regions in
the United States were responsible for the 342,000-acre increase
in U.S. rice plantings in 2004/05. In 2003/04, a 9-percent
decrease in total rice supplies--a result of a smaller crop and
big decline in beginning stocks--boosted U.S. prices
substantially, driving the 2004 area expansion.
U.S. Average Field Yield Projected
At Record 6,828 Pounds Per Acre
In early November, the U.S. Department of Agriculture’s (USDA)
National Agricultural Statistics Service (NASS) forecasted
average field yields for 2004/05 at a record 6,828 pounds per
acre, up 183 pounds from a year earlier and the fifth consecutive
year of a record average yield. Expanded plantings of new, higher
yielding long grain varieties in the South, plus generally
favorable weather across most U.S. rice growing regions--
especially the Mississippi Delta and California--during critical
growing months are behind the 2004 record U.S. yield.
Annual yield growth has averaged about 2 percent since 2000/01,
after being virtually stagnant from 1988/89 to 1999/2000. Several
new higher-yielding varieties have been released for commercial
use in the South over the past half-decade. These new long grain
varieties include: Cocodrie, Wells, Francis, Priscilla, Lagrue,
and Arhent. More recently, herbicide-resistant Clearfield
varieties have been released in the South as an effective means
to fight red rice problems. Red rice is weed that competes with
rice for sunshine and nutrients. Except for the Clearfield
varieties, most herbicides that kill red rice will kill the
commercially planted rice as well.
Field yields are projected higher this year for all reporting
States except Louisiana and Texas, with record yields projected
for Arkansas, Mississippi, and Missouri. The Arkansas average
field yield is projected at 6,800 pounds per acre, up 3 percent
from last year. Mississippi’s average yield is forecast at 6,900
pounds, an increase of almost 2 percent from 2003. At 6,400
pounds per acre, Missouri’s rice yield is up 4 percent from a
year earlier. California’s 2004 field yield is estimated at 8,400
pounds per acre, an increase of 10 percent from a year earlier
and the highest in a decade. Fields yields in California are
projected to fractionally below the record 8,500 pounds per acre
achieved in 1991, 1992, and 1994.
For Louisiana, field yields for 2004 are forecast at 5,350 pounds
per acre, down 9 percent from the year earlier record and the
lowest since 2000. The average yield in Texas is forecast at
6,600 pounds per acre, although unchanged from 2003, the yield is
500 pounds below the 2002 record. Both Louisiana and Texas
experienced severe rain and wind at planting this year that
adversely affected field yields.
Rice Production Projected To Increase
In 2004 in All Reporting States
Rice acreage is projected larger in 2004/05 in all reporting U.S.
rice growing States except Mississippi where area is virtually
unchanged from a year earlier. Arkansas, California, and
Louisiana account for the bulk of this year’s 11-percent increase
in total rice harvested area, with California’s plantings one of
the highest on record.
In Arkansas--the largest rice growing State in the United States-
-harvested area is projected at 1.56 million acres, up 105,000
acres from a year earlier. Area is still below the 1999 record of
1.63 million acres. California’s harvested area is projected at
600,000 acres, an increase of 93,000 acres from a year earlier.
In Louisiana, harvested area increased 80,000 acres to 530,000
acres. Despite the 18-percent increase, harvested acreage in
Louisiana remains below levels reported in 2001 and 2002. In
2003, extremely low prices led to a 16-percent reduction in
Louisiana rice acreage to 450,000 acres, the smallest since 1987.
At 217,000 acres, harvested area in Texas is up 21 percent from a
year earlier and the largest since 1999. Despite the increase,
rice acreage in Texas remains below the record of almost 600,000
acres reported in 1968. Missouri’s rice acreage is projected at
194,000 acres, an increase of 23,000 acres from a year earlier
and the second highest on record. High soybean prices at planting
and some red rice problems in major growing areas keep Missouri’s
rice acreage below the 2002 record of 206,000 acres. In contrast,
Mississippi’s rice acreage declined 1,000 acres to 233,000 acres
in 2004. High soybean prices at planting kept rice acreage
virtually flat in Mississippi in 2004.
Rice production is projected larger this year in all reported
States, with record crops projected for Arkansas and California.
Arkansas and California account for the bulk of the projected
increase in U.S. rice production in 2004. Production increases in
other States are much smaller. The 2004 Arkansas crop is
projected to increase 11 percent to a record 106.1 million cwt, a
result of both the larger plantings and a record yield.
California’s rice crop is projected at a record 50.4 million cwt,
up 31 percent from a year earlier, a result of both increased
plantings and a record yield. California’s rice crop was impacted
by adverse weather in 2003--a cold, wet spring followed by an
extremely hot summer--that cut production 10 percent from a year
earlier.
Louisiana’s rice production is projected at 28.4 million cwt, an
increase of more than 7 percent from a year earlier, a result of
an 18-percent increase in acreage. In Mississippi, rice
production is projected at 16.1 million cwt, up 1 percent from a
year earlier, a result of a record yield. At a record 12.4
million cwt, Missouri’s rice production is more than 18 percent
larger than a year earlier and just fractionally below the 2001
record. Expanded plantings are responsible for most of the
increase this year.
Total U.S. Rice Supplies Projected
To Increase to a Record 265.8 Million Cwt
Total U.S. rice supplies in 2004/05 are projected at a record
265.8 million cwt, up 10 percent from a year earlier. A record
harvest more than offset a smaller carryin and a projected
decrease in imports. Based on data from NASS reported in the
August 2004 Rice Stocks, beginning stocks for 2004/05 are
estimated at 23.7 million cwt, down almost 12 percent from a year
earlier and the smallest since 1999/2000. Arkansas accounted for
the bulk of the decline in beginning stocks in 2004/05. In
contrast, beginning stocks in California on August 1 were up 22
percent from a year earlier, despite the substantial decline in
production in 2003.
U.S. rice imports for 2004/05 are projected at 14.5 million cwt,
down 7 percent from the year earlier record and first decline
since 1999/2000. Combined medium/short grain rice accounts for
all of the expected decline in 2004/05 U.S. rice imports. Puerto
Rico--the largest U.S. territory--purchases the bulk of U.S.
medium/short grain imports. China supplied nearly all of this
rice in 2003/04 when it sold about 114,000 tons of medium/short
grain rice to Puerto Rico. In 2002/03 China and Australia
together shipped a total of 77,500 tons of medium/short grain
rice to Puerto Rico, about evenly split between the two
exporters. In 2001/02 Australia shipped more than 62,000 tons of
medium/short grain rice to Puerto Rico. Neither China nor
Australia supplied much rice to the United States or its
territories prior to 2001/02. Italy regularly exports small
quantities of Arborio rice--a high-quality medium/grain specialty
rice--to the United States. Egypt ships extremely small amounts
of its high-quality medium/short grain rice to the United States
as well.
Excluding the medium/short grain shipments, nearly all U.S. rice
imports are specific aromatic (or fragrant) varieties not
currently grown in the United States. Nearly all are long grain
varieties. More than 80 percent of U.S. long grain imports come
from Thailand--mostly jasmine rice--and the bulk of the remainder
is basmati rice from India and Pakistan. U.S. rice breeders are
currently trying to develop substitutes for these specific Asian
aromatic varieties.
Total U.S. rice imports have increased sharply since 1980/81 and
have more than doubled since 1993/94. Imports now account for 12-
14 percent of total domestic use (excluding seed use) of rice.
Much of this growth has been driven by increases in the Asian-
American population over the past 25 years. USDA’s long-term
baseline forecast for rice projects imports to continue to
increase at a faster pace than domestic consumption, thus
accounting for a growing share of the U.S. market.
Total supply of long grain rice--the dominant class of rice grown
in the United States--is projected to increase more than 7
percent in 2004/05 to 187.5 million cwt. A larger crop and record
imports are projected to more than offset a big decline in
carryin. Long grain imports are projected at a record 10.25
million cwt, an increase of almost 5 percent from 2003/04. The
166.9-million-cwt long grain crop is 17.9 million cwt larger than
a year earlier and the second largest on record. In contrast,
data from the August 2004 Rice Stocks report indicated long grain
stocks at the beginning of the 2004/05 market year at 10.3
million cwt, more than 34 percent below a year earlier.
For medium/short grain rice, supplies in 2004/05 are projected to
increase 17 percent to 77.4 million cwt, the largest since
1983/84. A larger crop and a big increase in beginning stocks
more than offset the decline in imports. Data from the August
2004 Rice Stocks report indicate beginning stocks of medium/short
grain rice at 12.4 million cwt, up 33 percent from a year
earlier. At 60.8 million cwt, the combined medium/short grain
crop is 21 percent above a year earlier and the largest since
2000/01. In contrast, imports of medium/short grain rice are
projected to decline nearly 27 percent from the year-earlier
record to 4.25 million cwt. Reduced shipments from China to
Puerto Rico are expected to account for nearly all of the decline
in U.S. medium/short grain imports.
U.S. 2004/05 Ending Stocks Projected To Be the Highest Since
1986/87
Total U.S. rice use in 2004/05 is projected at 224 million cwt,
up 3 percent from a year earlier and the second highest on
record. Domestic use (including the residual or unreported losses
and statistical errors) accounts for the bulk of the increase.
Total domestic and residual use is projected to increase more
than 4 percent to 119 million cwt. U.S. exports are projected at
105 million cwt, up 1 percent from a year earlier and the second
highest on record. A 7-percent decline in rough rice exports is
projected to be offset by increased exports of milled and brown
rice. Medium/short grain accounts for all of the increase in
total use. Combined medium/short grain total use is projected to
increase 12 percent to 60 million cwt. Total long grain use is
projected at 164 million cwt, virtually unchanged from 2003/04.
Ending stocks of total rice are projected at 41.7 million cwt, an
increase of 77 percent from a year earlier and the largest since
1986/87. Long grain accounts for the bulk of the increase in
ending stocks.
Total Rice Use in 2004/05
Is Projected To Increase 3 Percent
Total rice use--domestic and residual plus exports--in 2004/05 is
projected at 224 million cwt, up 6.2 million cwt from a year
earlier and the second highest on record. Domestic and residual
use accounts for most of the projected increase. Total domestic
use--including the residual, or unreported losses in
transporting, processing, and marketing plus any statistical
errors--is projected to increase more than 4 percent to 119
million cwt in 2004/05. Food, industrial, and residual is
projected at 115 million cwt, up nearly 5 percent from 2003/04.
Seed use is projected to decline more than 3 percent to 4 million
cwt.
Annual rice consumption in the United States increased sharply
from the late 1970s through the mid-1990s. From 1980/81 through
1995/96, growth in total U.S. rice consumption (including
consumption by U.S. territories but excluding seed use) averaged
almost 5 percent a year. A big increase in the Asian-American and
Hispanic-American populations, introduction of several new rice-
based food products, and marketing efforts by the rice industry
were behind much of this growth. Although still increasing, the
rate of growth has slowed since the mid-1990s. From 1995/96
through 2000/01, growth in U.S. rice consumption averaged about 3
percent a year. Since 2001/02, annual growth has averaged less
than 2 percent a year.
Fewer meals fixed at home, and a premium on meal preparation
time, have contributed to the slowing of the growth in U.S. rice
consumption that began nearly a decade ago. More recently, a
shift to protein diets and away from carbohydrates--such as
bread, rice, and pasta--by some consumers also contributed to the
weaker expansion in rice consumption.
Per capita rice consumption--including direct food use, processed
foods, pet foods, and beer--has nearly doubled since the early
1980s and is currently estimated at almost 27 pounds (not
including U.S. territories). Since 2000/01, per capita
consumption has grown about one-third pound a year, down from a
half pound a year in the 1990s and nearly a pound a year in the
1980s.
U.S. Rough Rice Exports
Projected To Decline in 2004/05…
U.S. rice exports in 2004/05 are projected at 105 million cwt
(rough equivalent of both rough and milled rice exports), up 1
percent from a year earlier. Exports are second only to the
record 124.6 million cwt shipped in 2002/03. In 2002/03, Brazil
imported almost 328,000 tons of U.S. rice, almost all long grain
rough rice. Record U.S. supplies and a much smaller price
difference over Asian competitors are behind expectations of
increased U.S. rice exports in 2004/05. By type of rice, U.S.
rough rice exports are projected to decline while combined milled
and brown rice exports are projected to increase in 2004/05. By
class, a fractional decline in long grain exports is projected to
be offset by stronger medium/short grain exports.
U.S. rough rice exports for 2004/05 are projected at 32 million
cwt, down 7 percent from a year earlier and more than 25 percent
below the 2002/03 record. Brazil accounts for most of the
expected decline in U.S. rough rice exports in 2004/05. Brazil
imported 214,600 tons of U.S. rough rice in 2003/04 and imported
more than 325,000 tons in 2002/03, all southern long grain in
both years. The United States is not expected to ship much rice
to Brazil in 2004/05, a result of ample supplies within the
MERCOSUR trading region. It is unlikely that the United States
can fully offset the loss of rough rice shipments to Brazil with
greater shipments to its core rough rice markets of Mexico and
Central America.
Southern long grain accounts for the bulk of U.S. rough rice
exports, with most of this rice going to Latin America, with
Mexico and Central America the largest buyers. Shipments to these
two regular buyers typically increase each year. The United
States supplies nearly all rice imports to both Mexico and
Central America. These two importers typically buy very small
amounts of U.S. milled rice as well as U.S. rough rice.
In addition, when rice supplies are tight in South America,
Brazil will typically import substantial amounts of U.S. southern
long grain rough rice. Brazil will then exit the U.S. market when
rice supplies are plentiful in South America. Some of the Andean
countries will also import large amounts of U.S. rice, nearly all
southern long grain rough rice, when South American supplies are
tight. Like Brazil, the Andean countries buy very little U.S.
rice in years of strong South American harvests.
Since 2001/02, Cuba has imported significant amounts of U.S. rice
as well, often taking rough rice. However, in 2003/04 Cuba’s
imports from the Unite States were mostly milled rice. Price
competitiveness of U.S. rice, the level of Cuba’s rice needs, and
Cuba’s ability to finance purchases of U.S. rice are major
factors behind Cuba’s decisions to purchases U.S. rice. The
European Union--mostly Spain and Italy--typically import small
amounts of U.S. rough rice each year, mostly long grain.
Turkey is the only other large market for U.S. rough rice. Turkey
typically imports California medium grain rice but will take
southern medium grain if California supplies are tight. Turkey’s
imports of U.S. rice declined sharply in 2003/04 when Turkey
instituted a ban on imports in September 2003. In the summer of
2004 Turkey replaced the outright ban on imports with an
‘absorption policy’ whereby for every ton of rice imported one
ton of rice had to be purchased from domestic stocks. This
restriction is expected to remain in effect through December
2004.
The Unite States is the only major rice exporter that allows
rough rice exports. Rough rice has become a much larger share of
U.S. exports over the past 15 years, and now accounts for more
than a third of total exports (on a rough basis). U.S. rough rice
exports have expanded substantially since 1990/91, when many
Latin American countries began to open their markets to imported
rice and reduced government support to their producers. Most
countries in Latin America prefer to import rough rice instead of
milled rice to keep their mills operating at full capacity
(lowest per-unit cost) and to avoid competition with domestic
milled rice. Many Latin American countries have rice milling
capacity that exceeds current rough rice production levels. To
encourage rough rice imports, most countries in the region
maintain a lower tariff on rough rice imports than on milled rice
imports.
Prior to 1990/91, rough rice accounted for a very small share of
U.S. rice exports, with the EU accounting for most of the
purchases. Occasionally South America--mostly Brazil--imported
larger quantities of U.S. rough rice when regional supplies were
tight.
While none of the large Asian exporting countries allows rough
rice exports, a few smaller exporters do. Argentina, Uruguay, and
Guyana typically ship some rough rice within Latin America, and
Australia has, in some years, shipped rough rice to Turkey.
…While Milled Rice Exports
Are Projected To Increase
Combined milled and brown rice exports (on a rough basis) are
projected at 73 million cwt in 2004/05, up more than 5 percent
from a year earlier. A big boost in U.S. supplies, a much smaller
price difference over Asian competitors, and a decline in
exportable supplies in several Asian exporting countries--as
well as in Australia--are behind the projected increase in U.S.
milled rice exports.
The price difference over similar grades of rice from Thailand--a
major competitor of the United States in Sub-Saharan Africa and
parts of the Middle East--has declined from about $180 per ton in
June to less than $70 by mid-November. U.S. rice has historically
been competitive with Thailand’s rice when the premium did not
exceed $50 per ton. Among major competitors, China, India, and
Australia all had relatively tight exportable supplies going into
the 2004/05 market year. In calendar year 2005, Thailand will
face tighter supplies due to record shipments in 2004. Supply
constraints will limit Vietnam’s exports in 2005 as well.
Northeast Asia and the EU are the top export markets for U.S.
milled rice (including brown rice). Nearly all U.S. shipments to
Northeast Asia--Japan, South Korea, and Taiwan--are purchased as
part of the importers’ World Trade Organization (WTO)
commitments. The United States is likely to increase exports and
raise its market share in this region in 2004/05. Its main
competitors--China and Australia--have tight exportable supplies,
especially Australia. None of the three Northeast Asian importers
is expected to purchase more than their minimum WTO import
requirements.
The EU purchases mostly brown rice from the United States that is
fully milled in Europe. The EU also purchases much smaller
quantities of fully milled rice from the United States, mostly
under a tariff-rate quota (TRQ) to compensate suppliers for the
accession of Finland, Austria, and Sweden into the EU in 1995.
The EU changed its rice policy on September 1, 2004. It
eliminated using a ‘margin of preference’ for calculating duties
on imported brown and milled rice and instead will assess fixed
duties on all forms of imported rice. Both India and Pakistan--
who export mostly basmati brown rice to the EU--were granted duty
abatements under the new policy. It is not clear yet how this new
policy will affect EU import levels or U.S. competitiveness in
the market.
The Middle East and Sub-Saharan Africa are also major markets for
U.S. milled rice. Over the past decade, the United States has
lost substantial market share in this region--especially in Saudi
Arabia and the Republic of South Africa--to Asian suppliers.
Thailand and India have substantially increased market share in
these two countries, mostly due to lower prices. Both countries
purchase high-quality parboiled rice, all long grain. The United
States is expected to be more price competitive in these two
high-quality markets in 2004/05.
The Caribbean--mostly Haiti--is another major market for U.S.
milled rice. The Dominican Republic and Jamaica are also
important markets for the United States in this region. Cuba
sometimes imports U.S. milled rice, although more often purchases
rough rice. U.S. shipments to the Caribbean increased 28 percent
in 2004/05, and were the highest on record. The region
experienced weather-related production difficulties in 2003/04,
necessitating large imports. Despite a locational advantage for
the United States, Thailand has successfully competed in the
Caribbean when the U.S. price difference is wide. South American
exporters often ship small amounts of rice into the Caribbean as
well.
The United States is the largest supplier of rice to Canada,
accounting for more than two-thirds of Canada’s annual rice
imports, all milled or brown rice. Aromatic rice accounts for the
bulk of Canada’s imports of Asian rice. In some years, Southeast
Asia--primarily the Philippines and Indonesia--imports U.S.
milled rice. These shipments are almost all non-commercial sales,
including Title I of the PL 480 Program. The United States
occasionally ships some milled rice--nearly all food aid--to
Central Asia as well. Eastern Europe and non-EU Western Europe
import small amounts of U.S. milled rice also. These two regions
are relatively minor rice consumers and are expected to have
little impact on global or U.S. export levels.
Although a relatively small import market, this year Oceania has
substantially increased its purchases of U.S. rice, nearly all
medium/short grain milled rice. Australia has typically supplied
this market, with the United States shipping very small amounts
to the region. However, Australia’s rice supplies are extremely
tight after consecutive weak harvests since 2002/03. This is the
main factor behind the strong growth in U.S. sales and shipments
to this small import market in 2004/05. Top buyers in Oceania
include Papua New Guinea, Micronesia, and Samoa.
U.S. Medium Grain Exports Are
Projected To Increase in 2004/05
Medium/short grain accounts for all of the projected increase in
total rice use in 2004/05. Total use of medium/short grain rice
is projected at 60 million cwt, up 12 percent from a year earlier
and the largest since 1996/97. Both exports and domestic use are
projected higher in 2004/05.
Domestic use of medium/short grain rice--including the residual--
is projected to increase 14 percent to 35 million cwt in 2004/05.
It is expected that some industrial and processed food users will
switch to medium/short grain rice from long grain as medium/short
grain prices drop substantially in 2004/05. Substitution among
classes of rice for direct food use (also called table rice) is
unlikely. In addition, the California rice industry is expected
to re-take some of the Puerto Rican market lost to China, a
result of lower U.S. rice prices and very high Asian freight
rates.
Medium/short grain exports in 2004/05 are projected to increase 9
percent from a year earlier to a near-record 25 million cwt.
Japan, South Korea, Taiwan, and Turkey are expected to account
for the bulk of U.S. medium grain exports in 2004/05. Jordan and
Oceania are expected to import smaller amounts. Tight supplies in
Australia--a major competitor of the United States in the global
medium/short grain market, lower U.S. prices, and much larger
U.S. supplies are behind the expectation of stronger U.S.
shipments in 2004/05.
Japan, Turkey, and Jordan have been major buyers of U.S.
medium/short grain rice each year since at least the mid-1990s.
South Korea returned as a buyer of U.S. rice in 2001 and Taiwan
began buying U.S. rice in 2002. Except for Japan’s 1994 emergency
imports, all rice imports by the three Northeast Asian countries
have been part of their WTO commitments. Japan and South Korea
began importing rice under the WTO in 1995. Taiwan began
importing under the WTO in 2002.
Japan is the largest global importer of medium/short grain rice
and the biggest market for U.S. medium/short grain rice. In fact,
more than half of California’s annual rice exports typically go
to Japan. The United States supplies about half of Japan’s annual
rice imports. China, Australia, and Thailand supply most of the
rest. Virtually all of Japan’s rice imports are purchased under a
tariff-rate quota agreed to under the WTO. Extremely high tariffs
on any over-quota rice imports virtually preclude any above quota
purchases. Japan’s WTO rice imports are not scheduled to increase
beyond the current level of 682,000 tons (milled basis) until
another WTO agreement is reached.
Similar to Japan, both South Korea’s and Taiwan’s rice imports
are solely the result of agreements under the WTO. South Korea’s
minimum access imports increased annually from 51,000 tons
(milled basis) in 1995 to 205,000 tons in 2004. South Korea’s
minimum access imports will remain at the 2004 level until a new
agreement is reached. Taiwan agreed to a minimum access import
level for rice in 2002 of 127,400 tons (milled basis) as a
requirement for joining the WTO. In 2003, Taiwan imported about
the same amount of rice as a year earlier, this time as part of a
TRQ. Taiwan will likely take the same amount of rice in 2004.
Taiwan and South Korea’s future import requirements are being
negotiated.
Turkey has been a major market for U.S. medium grain rice since
the mid-1980s. Over the last decade, Turkey has shifted from
being mostly a milled rice market for the United States to being
nearly a total rough rice market. Turkey is currently protecting
its producers--who just harvested a record crop--from imported
rice. Jordan, a market for U.S. rice for nearly 25 years, is the
smallest of the regular commercial markets for U.S. medium grain
rice. Jordan imports nearly all milled rice. The country does not
grow rice.
The United States will likely pick up sales in 2004/05 to various
countries in Oceania, a region typically supplied by Australia.
As of mid-November, U.S. sales and shipments to the region--a
very minor global importer of rice--were up considerably from a
year earlier. Central Asia has occasionally imported medium grain
U.S. rice, virtually all under U.S. food aid programs. In both
2001/02 and 2002/03, Uzbekistan imported 55,000-60,000 tons of
U.S. medium rice. None was shipped in 2004/05. Uzbekistan is
unlikely to purchase any U.S. rice in commercial markets.
Total long grain use is projected at 164 million cwt, virtually
unchanged from a year earlier. Stronger domestic use (including
the residual) is expected to be offset by a fractional drop in
exports. Total domestic use (including residual) of long grain
rice is projected at 84 million cwt, up almost 1 percent from a
year earlier. In contrast, long grain exports are projected to
decline 1 percent to 80 million cwt in 2004/05. A decline in U.S.
long grain rough rice exports is projected to more than offset
increased shipments of U.S. long grain milled rice. Expectations
that Brazil will not purchase significant amounts of U.S. rice in
2004/05 are behind the projected decline in U.S. rough rice
exports.
Record U.S. supplies and a much smaller price difference over
Thailand are behind expectations of expanded exports of U.S. long
grain milled rice in 2004/05. The United States is expected to
pick up market share in 2004/05 in price-sensitive markets like
the Middle East and Sub-Saharan Africa. Saudi Arabia, Ghana, and
Cote d’Ivoire are major commercial markets for U.S. long grain
milled rice in these two regions. Thailand and India are major
U.S. competitors.
The largest market for U.S. long grain milled rice (including
brown rice) is the EU. It is unclear at this time how the EU’s
new rice policy will affect U.S. competitiveness in this market.
Haiti and Canada are two other major markets for U.S. long grain
milled rice. Several smaller Caribbean markets also take U.S.
long grain milled rice. Rough rice shipments to Latin America--
mostly Mexico and Central America--account for the remaining
exports of U.S. long grain rice. The U.S. faces little
competition from Asian suppliers in the rough rice market.
U.S. 2004/05 Ending Stocks Projected
To Be the Largest Since 1986/87
U.S. ending stocks of all rice for 2004/05 are projected at 41.8
million cwt, up 77 percent from a year earlier and the largest
since 1986/87. A 3-percent increase in total use was more than
offset by a 10-percent boost in total supplies. A carryover of
this magnitude will keep U.S. rice prices under substantial
downward pressure for the remainder of the 2004/05 market year.
The resulting stocks-to-use ratio is projected at 18.7 percent,
up from 10.9 percent a year earlier and the highest since
1992/93.
Long grain accounts for the bulk of the build-up in U.S. ending
stocks. Long grain ending stocks are projected to increase 127
percent to 23.4 million cwt, the largest since 2001/02. The
combination of a more than 7-percent increase in total supplies
and near-steady total use was responsible for the build-up in
stocks. The long grain stocks-to-use ratio is projected at 14.3
percent, up from 6.3 percent a year earlier.
For medium/short rice, ending stocks for 2004/05 are projected at
17.4 million cwt, up 41 percent from a year earlier and the
largest since 1986/87. A 17-percent increase in medium/short
grain supplies more than offset a 12-percent rise in total
medium/short use. This level of carryover will keep U.S.
medium/short grain prices under substantial downward pressure
throughout the 2004/05 market year. The resulting medium/short
grain stocks-to-use ratio is projected at 26 percent, up from 23
percent a year earlier and the largest since 1992/93.
U.S. Rice Market Faces Record Supplies and Higher Global Prices
The U.S. season-average farm price for 2004/05 is projected at
$7.00-$7.50 per cwt, compared with $7.49 a year earlier. Monthly
reported rough rice cash prices began to decline in September
after increasing each month since March as U.S. supplies
tightened and farmers held off marketing the 2004 crop. Through
mid-October, monthly weighted cash prices for 2004/05 averaged
$8.45 per cwt. Prices are expected to drop during the remainder
of the marketing year, a result of a bumper U.S. harvest and
record domestic supplies. However, the U.S. price decline will be
tempered by stronger world prices, a result of tighter global
supplies and higher prices for intervention purchases of rough
rice by the Government of Thailand. Total U.S. food aid purchases
(including Title I sales) in fiscal 2004 are estimated at 223,300
tons, down from 309,500 tons a year earlier.
U.S. 2004/05 Season-Average Farm Price
Projected at $7.00 to $7.50 Per Cwt
The 2004/05 U.S. season-average farm price (SAFP) is projected at
$7.00 to $7.50 per cwt, compared with $7.49 a year earlier. The
2003/04 SAFP was up 67 percent from a year earlier and the
highest since 1998/99. The bullish prices in 2003/04 were
primarily due to a 9-percent drop in U.S. supplies and slightly
higher global trading prices. In 2004/05, U.S. prices will be
under downward pressure from a bumper crop and record U.S.
supplies. However, these bearish factors will be partially offset
by stronger global trading prices--a result of tighter world
supplies and higher prices for this year’s intervention purchases
of rough rice by the Government of Thailand. Through mid-October
2004, the weighted-average of U.S. monthly reported cash prices--
including remaining 2003-crop sales--was $8.45 per cwt, well
above the projected SAFP for 2004/05, indicating U.S. prices will
drop during the remainder of the market year.
Average U.S. monthly reported cash prices for rough rice
increased from March 2004 through August, as supplies of 2003-
crop tightened and, by late summer, farmers held off selling the
2004-crop rice. In October 2004, USDA estimated the mid-month
average cash price at $8.24 per cwt, down from $8.38 in September
and $8.85 in August. Despite the recent declines, U.S. monthly
cash prices have been above a year earlier every month since
December 2002. Two consecutive years--2002/03 and 2003/04--of
declining U.S. production, plus higher global prices--especially
in 2004, were behind the nearly 2-year rise in U.S. prices.
Price quotes for U.S. long grain rough rice are down from quotes
in June 2004, a result of a record long grain harvest this year.
Based on data from the weekly Creed Rice Market Report, average
quotes for long grain rice increased from about $6.25 per cwt at
the start of the 2003/04 market year in August, to $10.50-$10.75
by early June 2004. By July, few supplies of 2003 long grain rice
remained in farmers’ hands, and there was little selling by
farmers of any available rice. Early-season quotes for 2004-long
grain rice in Texas and Louisiana--which begin the U.S. harvest
in mid-July--were around $8 per cwt in late July. In late
September, first quotes for 2004-crop long grain rice in the
Delta--which reaches peak harvest in September--were $6.75-$7.00
per cwt.
By mid-November, with the southern harvest over, rough rice
prices in Texas and Louisiana had dropped to $7.65-$7.75 per cwt,
while in the Delta prices were quoted at $6.75 per cwt. In both
regions prices dropped only slightly during the harvest period.
Rising world prices, and a reluctance of farmers to sell, limited
the decline in U.S. prices in the fall of 2004 despite near-
record long grain production.
There have been few reported price quotes for 2004-crop
California medium grain rough rice. Nearly all of the California
crop is sold under a ‘pooling’ method of marketing. Under a
pooling method of marketing, where rice is co-mingled within the
same variety, rough rice prices are determined by the prices for
milled rice. Thus, actual rough rice prices are not determined
until after the end of the market year when all of the milled
rice has been sold. Producers typically receive a partial payment
up front, followed by subsequent payments over the next year.
In 2003/04, farm prices for California medium grain rose sharply,
reaching $12.75 per cwt by March 2004, the highest in a decade.
The high prices were primarily due to a 10-percent drop in
California production in 2003/04. California prices dropped
slightly in April and May on indications of a big area expansion
in California in 2004 and a slowdown in export sales of
California rice, especially to Turkey which had placed a ban on
imported rice. More information on California rough rice prices
in 2004/05 will become available when Japan makes its substantial
WTO purchases later this fall. Indications from early 2004/05
sales to Japan, Taiwan, and South Korea are for a significant
price decline in 2004/05.
In the South, medium grain prices were quoted around $6.75 per
cwt in mid-November, down from about $9.00 a year earlier, a
result of the record medium grain harvest in California. More
than 80 percent of the U.S. medium grain crop is grown in
California. Southern growers did not expand medium grain acreage
in 2004, despite high prices in 2003/04. Much of the southern
medium grain crop is used in processed foods and for industrial
uses such as beer. Processors of some products--such as beer and
pet food--can substitute between long and medium grain rice based
on relative prices. Little southern medium grain rice is
typically exported. However, some importers--such as Turkey--will
take southern medium grain rice when California supplies are
tight.
Marketing Loan Gains for 2004/05
Averaged $.70 Per Cwt Through Mid-November
U.S. producers are eligible for marketing loan benefits when
foreign prices (represented by USDA’s weekly adjusted world
price) fall below the loan rate for rough rice. Loan rates vary
by class of rice--long, medium, and short grain--with an all-rice
average loan rate fixed at $6.50 per cwt. The adjusted world
price is also reported by class. The payment rate is the
difference between the adjusted world price (reported by USDA
every Tuesday) and the loan rate. Since the spring of 1999 world
prices have remained below the loan rate, making U.S. rice
producers eligible for marketing loan benefits.
Through mid-November 2004, the 2004/05 payment rate for all rice
has averaged $.70 per cwt (simple weekly average), down from a
$2.60-weighted-average in 2003/04 and the lowest since July 1999.
World prices have risen sharply, especially since early 2004,
substantially reducing the payment rate. Much stronger imports by
China, plus a general tightening of global exportable supplies,
have been major factors boosting international prices in 2004.
From August 1995 until late March 1999, the adjusted world price
exceeded the loan rate, thus marketing loan payments were not
available. Payment rates were less than 25 cents per cwt from the
spring of 1999 until the start of the 1999/2000 market year.
Declining world prices caused payment rates to rise during
1999/2000 and by mid-March 2000 exceeded $2 per cwt for all three
classes of rice--long, medium, and short. For market year
1999/2000, the average payment rate weighted by marketings was
$1.94 per cwt.
Payment rates continued to rise throughout 2000/01 as the
adjusted world price declined. From May through July 2001, the
adjusted world price for all three classes of rice averaged $2.82
per cwt, the lowest on record. The average payment rate during
these 3 months by class was $3.69 for long grain, $3.67 for
medium, and $3.55 for short grain. This is the highest payment
rate for long grain rice since the summer of 1987 and the highest
payment rate on record for medium and short grain rice. The
payment rate (weighted by marketings) averaged $3.12 per cwt for
the 2000/01 August-July market year.
Despite a slight strengthening of the adjusted world price in
2001/02, the weighted-average payment rate actually rose 26 cents
to $3.38 per cwt for 2001/02. For 2002/03, the average payment
rate dropped fractionally to $3.33 per cwt. The average adjusted
world price in 2002/03 was $3.28 per cwt, 5 cents below a year
earlier.
The payment rate has been declining since early May 2003 when
world prices started increasing, primarily due to tighter global
export supplies, especially in India where a weak monsoon
severely cut 2002/03 production. China’s supply situation was
tightening as well, as production had contracted a fifth
consecutive year. From a payment rate of $3.43 per cwt in early
May 2003, the rate had declined to $2.54 by the start of the
2003/04 market year in August. The rate was nearly stable until
last December when world prices started moving higher and the
payment rate began dropping again.
By mid-March 2004, the weekly rate was below $2 per cwt for the
first time since February 2000. In early 2004, China began to
purchase non-fragrant milled white rice in the global market for
the first time since the mid-1990s, a major factor driving global
prices higher last winter and spring. By early May 2004, the
average payment rate was less than $1 per cwt, the lowest since
July 1999. For market year 2003/04, the weighted-average payment
rate was $2.52 per cwt.
In October 2004, global prices increased in anticipation of
Thailand’s 2004 main-crop rough rice intervention purchases. By
mid-November, the payment rate was less than 50 cents per cwt.
Thailand announced it would purchase up to 9 million tons of
rough rice from its growers between November and the end of
February. The purchase prices are higher than a year earlier. The
objective of Thailand’s intervention purchases is to support rice
prices.
U.S. Food Aid Purchases for Rice
Declined 28 Percent in FY 2004
Total U.S. food aid purchases for rice for fiscal 2004 (October
2003 to September 2004) are estimated at 223,300 tons, down
86,200 tons from a year earlier. In both the text and tables of
this report, U.S. food aid purchases are assigned appropriate
October-September fiscal years based on the fiscal year in which
the rice was purchased for donation. Shipment dates may not
necessarily fall within the same fiscal year as the rice was
purchased. Food aid accounted for 6 percent of total U.S. rice
exports in fiscal 2004, down from 7 percent a year earlier. In
fiscal 2003, total U.S. food aid purchases (including Title I
sales) totaled 309,500 tons, down from 355,900 tons a year
earlier.
U.S. rice is shipped under four food aid programs: PL 480 (Title
I and Title II), Section 416(b) surplus removal, Food for
Progress, and Food for Education. In fiscal 2004, total purchases
under PL 480 Title I (concessional sales) totaled 58,200 tons,
down from 117,800 tons a year earlier. The Philippines was the
only Title I recipient in fiscal 2004, purchasing 58,200 tons.
Total purchases under PL 480 Title II, or food donations,
accounted for 71,200 tons in fiscal 2004, down from 144,700 tons
in fiscal 2003. Indonesia was the largest recipient of Title II
donations in fiscal 2004, taking 15,180 tons. Other recipients of
Title II donations in fiscal 2004 receiving at least 3,000 tons
were: Benin, Burkina Faso, Guatemala, Madagascar, Mozambique,
Niger, Sierra Leone, Somalia, Sri Lanka, and the United Arab
Emirates.
In addition, about 64,500 tons of rice was purchased in fiscal
2004 under the Food for Progress program, up from 46,900 tons in
fiscal 2003. At 15,000 tons, Indonesia was the largest recipient
in fiscal 2004. Cote d’Ivoire ranked second receiving 12,000
tons. Nigeria, Senegal, and Cameroon each received 10,000-11,000
tons. There were no Section 416(b) allocations or purchases in
fiscal 2004. Finally, purchases under the Food for Education
program totaled 29,400 tons in fiscal 2004. Cote d’Ivoire, Ghana,
Mozambique, Cambodia, Afghanistan, Guatemala, and Cameroon
accounted for most of the purchases in fiscal 2004.
In fiscal 2003, Title I purchases for rice totaled 117,800 tons,
down 68,000 tons from a year earlier. The Philippines accounted
for all of the Title I sales in fiscal 2003. In addition, about
144,700 tons of rice was purchased in fiscal 2003 under PL 480
Title II, up 89,300 tons from a year earlier. Major recipients of
Title II purchases in fiscal 2003 were Indonesia (54,600 tons),
Iraq (47,300 tons), Honduras (8,160 tons), Benin (8,110 tons),
North Korea (5,000 tons) and Niger (4,580 tons).
U.S. rice purchased under the Food for Progress program totaled
46,900 tons in fiscal 2003, up from 27,400 tons a year earlier.
Cameroon was the largest recipient, receiving 21,000 tons.
Uzbekistan ranked second, receiving 10,000 tons. Although 23,700
tons of rice was programmed in fiscal 2003 under the Food for
Education program, no purchases under this program occurred
between October 2002 and September 2003. Nearly all of this rice
was purchased under the Food for Education program in early
fiscal 2004. There were no Section 416(b) allocations or
purchases in fiscal 2003, compared with 56,000 tons purchased in
fiscal 2002.
Recap of 2003/04 U.S. Rice Market
U.S. Season-Average Farm Prices Climbed 67 Percent on Smaller
Supplies
U.S. rice supplies contracted 9 percent to 241.5 million cwt
(rough basis) in 2003/04, as a big drop in beginning stocks and a
smaller crop more than offset record imports. Both long and
combined medium/short supplies were smaller than a year earlier.
On the use side, a 17-percent drop in exports from the year-
earlier record and fractional growth in domestic and residual use
were responsible for a 9-percent drop in total U.S. rice use to
217.8 million cwt in 2003/04. Ending stocks declined 12 percent
to 23.7 million cwt, the smallest since 1998/99. The combination
of tighter supplies and a smaller carryover were largely
responsible for a 67-percent boost in the U.S. season-average
farm price to $7.49 per cwt, the highest since 1998/99. Global
trading prices strengthened in 2003/04 as well--a result of
tighter world supplies--also supporting U.S. prices.
Weaker Plantings Pulled U.S. 2003 Rice Crop
Down 6 Percent to 199 Million Cwt
The 2003/04 U.S. rice crop is estimated at 199.2 million cwt,
down 11.8 million cwt from a year earlier and the second
consecutive year of declining U.S. production. The smaller crop
was the result of a 7-percent decrease in plantings to 3.02
million acres. The 2003/04 area contraction was primarily due to
weak prices and low price expectations at planting for both long
and medium grain rice--a result of generally weak global trading
prices and record total U.S. supplies in 2002/03.
The average yield--6,645 pounds per acre--was up 67 pounds from a
year earlier and was the highest to date. This was the fourth
consecutive year of a record yield. Generally favorable growing
conditions in most of the South and continued adoption of new,
higher-yielding southern long grain varieties were behind the
record U.S. field yield in 2003.
Both long and medium grain acreage contracted in 2003. Long grain
plantings declined 8 percent to 2.33 million acres. Virtually all
long grain rice is grown in the South and plantings declined in
every reporting State in the region. Plantings of medium grain
rice dropped 4 percent to 647,000 acres. California--where more
than 70 percent of the U.S. medium grain acreage is located--
accounted for all of the medium grain area contraction. Medium
grain plantings actually rose slightly in the South. In contrast,
plantings of short grain rice--which accounts for just 1-2
percent of U.S. rice production--were estimated at 43,000 acres,
up 16,000 acres from 2002/03. California produces almost all of
the U.S. short grain crop.
Production declined for both long and medium grain rice in 2003.
Long grain production is estimated to have been 149 million cwt,
a drop of 5 percent from a year earlier and the smallest since
2000. An 8-percent decrease in long grain area more than offset a
record yield. Medium grain production declined 9 percent from a
year earlier to 47.4 million cwt, a result of both smaller
plantings and a weaker yield. California accounted for all of the
decline in medium grain production in 2003. In contrast, the U.S.
short grain crop is estimated to have increased 78 percent to
2.71 million cwt, a result of both a higher yield and expanded
plantings. Much of the U.S. short grain crop is exported to
Japan.
Rice acreage declined in 2003 in all reporting States, with
Louisiana accounting for the largest share of the 218,000-acre
reduction in total planted area. At 455,000 acres, Louisiana’s
rice acreage was nearly 16 percent below a year earlier and the
smallest since 1987. In Arkansas, the largest rice producing
State, 2003 rice plantings of 1.47 million acres were down 3
percent from a year earlier. Mississippi’s rice plantings of
235,000 acres were 8 percent below 2002. In Texas, rice plantings
declined 25,000 acres to 181,000, the smallest since the 1930s.
Missouri’s rice area declined 7 percent from a year earlier to
176,000 acres. In California, rice plantings declined almost 5
percent to 509,000 acres.
Low prices at planting and some weather problems in parts of
Arkansas and Missouri were behind the smaller rice acreage in
2003 in the South. In California, severe weather problems at
planting and some selling of water rights accounted for the
smaller rice acreage in 2003. California
