Increases in rice acreage, yields suppress prices

Bruce Schultz, Gould, Frances I.  |  12/7/2018 5:26:32 PM

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Harvest is underway near Midland at the Thibodeaux Farm. The outlook for rice prices calls for prices to remain low because of high production levels in the U.S.


Increased rice acreage and yields in 2018 have suppressed prices, according to an LSU AgCenter economist who says that trend is expected to continue.

“Production was up for all rice by 23 percent,” said Michael Deliberto.

Deliberto said U.S. rice acreage increased by 528,000 acres in 2018, or 22 percent, from 2017, and most of that increase was in Arkansas. Louisiana’s acreage increased by almost 10 percent to 434,123, compared to 391,071 in 2017.

According to the U.S. Department of Agriculture, Louisiana’s average yield in 2017 increased from 6,710 pounds an acre to 7,000 pounds — still below the 7,600-pound record set in 2013.

The USDA statistics show the U.S. average yield was 7,563 pounds, up from 7,507. California also had a slight increase, and the Arkansas yield was roughly the same as 2017. Missouri, Texas and Mississippi had slight decreases.

Deliberto said exports increased by 13 percent from 2017. Part of that increase was two major sales to Iraq.

“But we can’t ignore the facts that a large part of our rice exports go to Latin America,” he said.

Deliberto said potential exists for increased medium-grain sales in the Middle East because of water restrictions in Egypt, a country that has gone from a net rice exporter to a net importer.

The U.S. Department of Agriculture price forecast for long-grain rice is for $11 a hundredweight ($17.82 per barrel, or $4 per bushel). The USDA forecast for medium-grain is $11.10 per hundredweight. Lower prices for U.S. rice make the American commodity more competitive on the global market, he said.

But Deliberto said the demand, even with increased exports, is not enough to offset the large supply.

Besides forecasting the rice market, Deliberto works on several other projects, including one to chart energy costs for drying rice, a budget model for row rice in north Louisiana, and rent and cash flow models.

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