Rice farmers see reasons for hope as harvest begins

Issue Date: September 16, 2020
By Ching Lee
Farmers harvest rice in a Glenn County field. Marketers say retail demand for rice jumped at the start of the pandemic and has remained strong, but that slumping sales to food-service buyers have reduced overall demand for the crop this year.
Photo/Fred Greaves
As the rice harvest begins, farmers assess the impact of conditions including high temperatures and wildfire smoke that muted sunlight and prevented some fields from drying completely.
Photo/Fred Greaves

Farmers expect rice harvest in the Sacramento Valley to ramp up this week, and they express optimism for their crop and its prospects.

Based on harvested fields of some earlier-maturing varieties already making their way to dryers, farmers say they anticipate crop yields will be about average. Despite a recent heat wave, they reported a largely typical growing season—even though the pandemic has made for an unusual marketing year.

With wildfire smoke blanketing California skies, Colusa County farmer Leo LaGrande said harvest has so far been "on the muddy side," as lack of sunlight prevented fields from drying completely, which could potentially slow harvest. Most of what he's harvested are Japanese short-grain varieties, which mature earlier than medium-grain Calrose, the state's predominant variety. He noted strong winds last week did help dry fields faster and that the smoke cover has allowed the crop to mature "at a good, steady pace."

With uncertainty about how the pandemic will further shake up demand for California rice, LaGrande said he's excited to learn about shipping channels opening again, with more imports of consumer goods from China coming into the United States, which bodes well for U.S. exports finding capacity in shipping containers.

"That's a big deal," he said, "because that creates an availability of ships going back (to Asia), and a lot of that usually carries ag products."

In the early days of the pandemic lockdown, when Americans loaded up on pantry staples such as rice, California marketers scrambled to fill orders from retailers trying to restock empty grocery shelves. That uptick in retail demand has slowed, said Chris Crutchfield, president and CEO of American Commodity Co. in Williams, which markets rice domestically and internationally.

Even though domestic retail demand remains "much higher than pre-COVID," Crutchfield said demand from food service has "dropped off the charts," and increased retail sales have not offset reductions in food service. For this reason, overall domestic shipments of California rice during the last two months have trended lower than before the pandemic, he added.

"People were talking about a lack of inventory. It's not as low as we thought," he said.

California farmers grew more rice this year—507,000 acres compared to 498,000 acres last year, according to the U.S. Department of Agriculture. With an "excellent growing season" in 2020, Crutchfield said he expects better yields and more supply coming through the pipeline.

"All that put together, I still feel a little positive about the upcoming year," he said, noting that prices to farmers have been "very strong" the last two years. "I suspect it'll still be a profitable crop year for the farmers."

He pointed to good market prospects in South Korea, the second-largest export market for California rice. This represents the first year South Korea has implemented a country-specific quota for rice imports that guarantees market access and a minimum tonnage from the U.S., all of which will come from the Golden State, Crutchfield added.

But one important Asian market—China—remains out of reach for now. With soured U.S-China relations, there have been no exports of U.S. rice to China, after the country made an initial purchase last year from a Colusa-based rice company. This is despite a 2017 phytosanitary protocol reached between the two nations and a completed Phase 1 U.S.-China trade agreement that included commitments to buy more U.S. rice.

Crutchfield said private Chinese importers have expressed their desire to buy California rice, but none of them are doing so until the Chinese government either makes a purchase or tells them directly it's OK to import U.S. rice. With the U.S. presidential election in less than two months, he said "it's certainly not imminent or even probable that we would see (U.S. rice exports to China) anytime soon."

With domestic demand down by more than 30%—a trend expected to continue until restaurants reopen and begin serving at full capacity—Crutchfield said California rice marketers will need to rely on more traditional export markets such as Japan, South Korea and Taiwan, and look to other foreign markets such as the Middle East, which is more challenging from a pricing standpoint.

In Glenn County, farmer Bill Weller has been harvesting his rice crop since late August, which he said is early for him. He said prices to growers have been strong this year and that the cooperative to which he markets his rice has sold more rice domestically this year, attributing the enhanced demand to COVID-19 and increased retail sales.

Weller also owns a brewery business and uses some of his Calrose rice for brewing beer, which he said "adds a lot of value to our rice."

Though it's still early to determine overall yields, Weller said his crop appears "above average" so far. He noted a recent heat wave could accelerate growth of the crop, causing the plants to lodge or fall over, which could slow harvest and reduce yield somewhat.

Sutter County farmer Jon Munger, who has been harvesting a short-grain variety since the start of the month, said much of that rice will be sold domestically to retail and food-service markets. He said though sales on the retail side "seem to be holding," it's hard to know how long that can be sustained and when demand from food service will return.

"I think it's to be determined," he said. "A lot of this, unfortunately, there's not much history to go by."

Of harvest, Munger said he expects to start on the medium-grain this week and that progress appears "right on schedule, based on when we planted." He noted short-grain varieties are already prone to lodging and recent high winds didn't help.

LaGrande said even though the year started with "a lot of concerns" because of COVID-19, he remains "cautiously optimistic" about the rice crop's outlook.

"We think there's great opportunity with the product that we grow," he said. "We're excited about this upcoming year and about getting our exports going again and, of course, restaurants opening up."

(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.




Special Reports

Features

Series

Special Issues

Special Sections