rice farmers see record demand, so why are prices lagging?
California rice farmers are realizing record demand for their
2004 crop. Export numbers released
this week from the US Department of Agriculture show that export demand for
medium grain milled rice is 45% ahead of one year ago.
Total demand for all classes of the 2004 medium grain rice crop (milled,
brown and paddy) is 37% ahead of 2003. A
total of 26.4 million cwt. (hundredweight, or 100 pounds) of paddy rice have
been sold to export markets thus far, as compared with 19.3 million cwt. one
“These numbers are good news for California rice
farmers,” said Steven Jones of Rice Producers of California. “We grew a big crop in 2004, but these export numbers show
that we should easily move the entire crop.”
California’s rice production for 2004 is estimated at 52
million cwt., and when added to medium grain produced in the Southern US, total
US production comes to 60.8 million cwt. Carryover
from the 2003 crop is 12.4 million cwt, giving a total supply of 73.2 million
US domestic use is projected to consume 35 million cwt,
leaving 38.2 million cwt for the export market and carryover supplies.
“We’ve already hit 26 million cwt. in export sales, so now we’re
eating into that 12 million cwt. carryover supply,” noted Mr. Jones.
“We’ve already exceeded anticipated export sales for the entire year,
and we’re only four months into the marketing year.”
These new numbers are causing some growers to ask tough
questions of rice marketers. “If
traders have already marketed basically the entire crop, with almost 8 months to
go before new supply becomes available, why are prices so low?” asked Scott
West, a rice farmer from Colusa. “If
demand is exceeding supply, prices should rise.”
Indeed prices on the export market are at record low levels.
Recent sales of rice to Japan, formerly a lucrative market for California
rice farmers, were made at prices estimated to be 38% below the farmer’s cost
of production. Unfortunately, rice
farmers aren’t the ones doing the actual selling of the crop.
“It’s ridiculous,” said Greg Massa, communications
director for Rice Producers of California, a farmer organization that has been
examining the low prices. “Farmers
can’t make a living at these prices, which are so low that even full subsidy
payments don’t make up the shortfall. The
rural counties of the Sacramento Valley could lose more than $100 million in
taxable income this year due to overly-aggressive marketing.”
RPC interim leader Kelly Ornbaun expanded on the issue of
lost tax revenue. “Rural areas in
California are hurting. When
farmers don’t get paid fairly for their crop, it ripples through the
community. Ultimately, country and
state governments become affected, we’re already seeing that here.”
Mr. Ornbaun continued, “The only way out is for farmers and
community leaders to stand up and make themselves heard.
Anyone can sell a crop at these prices.
What we’d like to see is someone actually sell our crop at a profit.”
The Rice Producers of California is the only organization solely representing the views of the California rice farmer.