Bruce Schultz | 7/1/2006 4:12:13 AM
CROWLEY – Rice prices worldwide will be strong the next two years because rice stocks in Asia have declined significantly, a rice marketing expert said Thursday (June 29) at the annual LSU AgCenter Rice Research Station Field Day.
Milo Hamilton, president and co-founder of Firstgrain Inc. and www.firstgrain.com, told the crowd of more than 500 people who attended the field day that the Chinese and Indian rice stocks are down by 85 million tons over the past six years.
"In two years, theoretically, China should have almost no rice left," Hamilton said. "The roosters are coming home to roost."
A water crisis in China is contributing to a price increase in northern China, he said.
Reservoirs in Brazil received half the normal rainfall recently, and the price of rice in that region has increased by $60 per metric ton in the past three weeks, Hamilton said, adding, "The price in Europe is trading at new highs of $15 per hundredweight due to a poor crop last year."
Hamilton said he’s bullish on the U.S. rice price. He said he expects prices to hit $10.75 to $12.75 per hundredweight in the next couple of years, and he said those prices could possibly reach $13.
The marketing expert said farmers should spend more time on marketing to get the best prices for their crop.
Hamilton said he’s hearing stories from many farmers across the United States about low prices for their rice and high prices for fuel. He also warned farmers should not look for U.S. price supports to continue – with the expectation that money will be available for conservation programs but not for production agriculture.
Farmers will have to become more innovative to make money, and that even includes off-farm income.
"The future will be bright, if we do it right," he said, stressing that farmers have to accept that the agricultural economy has changed.
"Farming is not a way of life anymore," he said. "It’s a big business. If farming is a way of life, it can be a very expensive business, but if farming is a business, it can be a very rewarding way of life."
Input costs for farmers have increased because of fuel prices, and many have gotten out of rice production. Even in Asia, farmers cannot make ends meet, and that means overall yields may suffer. In Indonesia, one of the largest importers of rice, the government has increased price supports to $8.50 per hundredweight– about $2 higher than the U.S. rice loan rate.
"We are in a growing and gathering storm," Hamilton said.
The expert also said even though crude oil prices are above $70 a barrel, commercial users are still buying crude oil futures, which may indicate much higher crude prices ahead.
In addition to Hamilton’s remarks, the field day provided a chance for researchers at the LSU AgCenter’s Rice Research Station to pass along results of their work.
Dr. Steve Linscombe, rice breeder and the LSU AgCenter’s regional director for the southwestern Louisiana area that includes the station, said more Clearfield varieties of rice are in development.
Another LSU AgCenter rice breeder at the station, Dr. Xueyan Sha, said a medium-grain variety should be available for release soon, and work continues on an aromatic long-grain variety.
In other reports during the field day:
–LSU AgCenter soybean specialist Dr. David Lanclos said this year’s bean crop needs rain soon. Some farmers have put off planting because they’ve been waiting on rainfall, he said, adding, "I know of three farmers planting today." But the potential for a good crop still exists, according to Lanclos, because the lack of rainfall in the spring forced young plants to grow deep roots, and that could mean a good yield. "When beans struggle for water early season, they usually do well late season," he said.
–Dr. Don Groth, an LSU AgCenter plant pathologist at the Rice Station, said seed treatments are being studied as a way of decreasing diseases on rice. He said disease pressure is light this year because of dry conditions.
–LSU AgCenter plant pathologist Dr. Chuck Rush advised rice farmers to be aware of consistently hot weather that could result in an epidemic of bacterial panicle blight. Outbreaks occurred in 1995, 1998 and 2000, he said, and some farmers had yield losses of 40 percent. He said a chemical can be used to control it, but it is not available in the United States.
–Dr. Mo Way, an entomologist from Texas A&M who does cooperative work with scientists at the LSU AgCenter’s Rice Station, said the use of acephate insecticides for rice stink bugs was rejected by the U.S. Environmental Protection Agency for three reasons. Way said the EPA turned down the application because of opposition to another organophosphate, dietary residue data and an economic analysis that determined a savings of $46 an acre was insufficient to justify approval. But he said continued efforts could be successful in getting the chemical "labeled" for such uses. Way also told farmers the Mexican rice borer is in Texas only one county away from the Louisiana-Texas line.
–LSU AgCenter rice physiologist Dr. Richard Dunand at the Rice Station gave an overview of his work on three different plant growth regulators. He said one product, Prestige, has shown some yield increase.
–Dr. Eric Webster, an LSU AgCenter weed scientist, said early herbicide application is important to control weeds in rice. Yield losses can occur within the first three to four weeks of a crop if weed pressure is not controlled, he said.
In addition to those presentations on research, LSU AgCenter retiree Virginia Faulk Fontenot was honored for her work under five Rice Station directors, and businessman Lennie Hensgens of Crowley was recognized for his contributions to the rice industry.
Writer: Bruce Schultz at (337) 788-8821 or email@example.com