Rice farmers see improved prospects

Issue Date: September 19, 2018
By Ching Lee
Jon Munger, manager of Montna Farms in Sutter County, examines the condition of a field of short-grain rice, typically one of the earliest varieties to be harvested. Farmers throughout the Sacramento Valley are beginning to harvest their 2018 rice crops.
Photo/Ching Lee

As rice harvest in the Sacramento Valley begins to ramp up, farmers say prospects for their 2018 crop look good, with only minimal stocks remaining in warehouses and buyers "eagerly waiting" for the new crop.

Growers enter the harvest season with one of the smallest carryovers they've had since before the state's four-year drought in 2013, said Chris Crutchfield, president and CEO of Williams-based American Commodity Co., which markets rice domestically and internationally.

"California right now is out of rice," Sutter County grower Steve Butler said. "Most of the warehouses are empty and have been since mid- to late summer."

California farmers are on track to harvest some 500,000 acres of rice this year, according to the U.S. Department of Agriculture. That's up from 445,000 acres in 2017, when torrential spring rains and flooded fields prevented some growers from planting the acres they wanted.

Despite the reduced acreage last year, a robust crop in 2016, coupled with higher global supplies, kept downward pressure on prices. Marketers spent all last year and the early part of this year selling "a lot of cheap rice," Butler said. Now that supplies are depleted, "people are anxiously awaiting the 2018 crop," he added.

"It's always better to have our new crop being anticipated by the marketplace because we get a lot of volume moved in a hurry, and that's good for everybody," he said.

Meanwhile, growers up and down the valley have been busy draining fields and readying their harvesters, while those with earlier-maturing varieties have begun harvest.

Jon Munger, manager of Montna Farms in Sutter County, said late spring rains delayed planting by 10 to 14 days, so harvest is now starting a little later, and recent mild weather has not helped. He noted the moisture level on a field of short-grain rice, which matures earlier, was still a bit high last week but was expected to be ready this week.

Harvest of some medium-grain rice, which makes up the bulk of the state's rice acreage, is expected to begin later this week.

Though growers won't know their actual yields until they harvest the crop, some have described production this year as average to good.

"Overall, we expect it to be a normal crop at this point," Munger said.

Luis Espino, a University of California Cooperative Extension farm advisor, said there are concerns that sustained high temperatures in July may have affected yields, but the heat also sped growth of the crop, allowing delayed plantings to catch up a bit. Though weeds and pests continue to be a problem for growers, he said, "I don't think this year was particularly bad."

Butte County grower Ralph Cassady said he started draining his fields last week and is about three weeks away from harvest. Wet fields in the spring may have delayed planting, he said, but for the most part, farmers were able to plant all the acres they intended. He said some growers opted to fallow land in order to transfer water to districts south of the delta.

As a member of the Red Top Rice Growers Association in Biggs, Cassady said the rice-drying co-op currently is "completely empty" of rice, which he characterized as "unique."

"Last year at this time we had quite a lot of rice in there, but it's all gone now," he said. "We're pretty positive about it because there's not much carryover left, if any."

With market prices climbing in the spring in reaction to the lower stocks, Sutter County grower David Richter said he decided to plant more rice instead of corn, as corn prices remained depressed. Though he's still about 10 days away from harvest, he described his rice fields as looking "better than average."

"Everybody has a good feeling because a lot of the other crops have been doing well," he said, including tomatoes, wheat and beans. "So when you have good crops, you usually expect a good crop for rice."

Crutchfield said while he doesn't expect to be selling rice at the "prohibitively high" prices that were being quoted during the summer, he's also not concerned about moving the new crop. Even though California acreage is up from last year, it's not what it was in 2016. And with the "lowest carry-in stocks in recent memory," he said he does not expect the state will face an oversupply.

"I think prices will remain at a profitable level all season, and I think they will remain stable probably at least until January," he said.

The upcoming rainy season will give markets a better idea of how much rice California farmers may end up growing next spring, and that could move market prices up or down, depending on precipitation and water availability, he added.

In the meantime, demand for California medium-grain rice has been picking up in key Asian export markets of Japan, South Korea and Taiwan, Crutchfield said. Marketers also are seeing "a lot of inquiries" for the new crop from the Middle East, another important market for California rice, he added.

At the same time, Australia, which competes with California, is expected to plant a smaller rice crop this year due to drought and lack of water. Egypt, another exporter of medium-grain rice, has "drastically limited rice plantings for the season" and is poised to be a net importer of rice this year, Crutchfield said.

California rice does have to contend with China, which has become a main competitor in the medium-grain rice market, he said. Though it's the world's largest importer of rice, China now competes with California in Japan, Korea and the Middle East. It is also competing with California in the domestic market of Puerto Rico, where "we are starting to see a lot of medium-grain rice from China show up," effectively displacing medium-grain rice grown in U.S. states such as Arkansas and Louisiana. That Southern rice now has to find a home by competing with California rice in markets such as Taiwan, Crutchfield added.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.