Market Update: Rice Farmers at Full Speed: “It’s Going To Be Large, At Least in Planted Acres”

April 28, 2023
Planting continues to race forward where possible, with Arkansas significantly ahead of the 5-year average. The largest rice state is at 51/21% planted/emerged, compared to the 5-year average of 32/10%. Louisiana is at 86/81%, Mississippi at 39/11%, Missouri 63/12%, and Texas at 74/58%. All in all, both planting and emergence are ahead of schedule. Farmers in NE Arkansas and SE Missouri are expected to plant until June 1st. One Arkansas farmer commented that “Where I buy my seed, I was told last week I need to take the rest of mine because we’re selling so much rice seed, they couldn’t police it in their warehouse.” Tractors are running full steam over medium grain acreage in California, with some of the earliest seed planned to be flown this week. The market is largely on auto-pilot right now with growers so focused on sowing new crops with almost no supplies of old crops. The last tranche of Iraq business was a godsend to keep thruput up at the mills, as is the return of more steady purchases from Haiti. Everyone is excited about a larger crop to get export markets back, but competing exporters in South America are eying a similar rebound.
A recent GAIN report on Argentina was released, and their story sounds like a direct parallel to that of the US. Short crops in recent years have increased prices, and with the drop in input costs compared to last year, favorable rains should result in a positive outcome for farmers and millers alike. While the drought resulting in the smallest soybean crop in the country has been stealing headlines, rice acres are expected to rebound in MY 2023/24. Production is forecast to increase by 845,000 MT milled basis, which is a jump of 24% over last year up to 470,000 acres. Exports are forecast to return to normal, up to 400,000 MT milled basis. The current crop year registered a record low for exports in the last 20 years (similar to the US). Per capita rice consumption hovers at approximately 20 lbs, which is lower than in many other South American countries. The harvest is approaching 80% complete at this point, and warm weather has resulted in more broken rice at mills than in normal years.
A separate GAIN report on Paraguay was also published, which makes sense given that these two regions border one another through a key shared water source, the Rio Parana. The 2023/24 rice production is expected to crest a record, getting as high as 1.3 MMMT of rough production, or as many as 487,000 acres. Continued investment in the region is bolstering rice acreage, and it is expected that their production will continue to increase with each passing year. Just like Argentina, drought reduced acres last year, resulting in prices 26% higher than the year before and a very low carry-out. This low carryout, when coupled with the larger production this year results in exports that are expected to match last year at 711,000 MT milled basis. Paraguay is growing in its prominence as a reliable and quality supplier, having registered exports to 31 countries last year comprised of 42% milled, 32% brown rice, 16% paddy, and 10% brokens. As the USRPA looks to expand the sales of US rice into South America, Argentina and Paraguay can’t be overlooked as viable competitors.
In Asia, prices held steady/firm, particularly in Vietnam where they didn’t move from last week at $480 pmt. In Thai prices have firmed at $485 pmt and are hinting at $490 pmt. The story is the same in India with record loadings and prices below $445pmt.
The weekly USDA export sales report shows a bit of good news this time with net sales of 51,500 MT, up noticeably from the previous week and up 25% from the prior 4-week average. Exports of 80,400 MT were up noticeably the previous week and from the prior 4-week average as well.
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