RICE YEARBOOK--SUMMARY November 18,1999 November 1999, ERS-RCS-1999 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- RICE YEARBOOK is published annually by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. This release contains only the text of the report --tables and graphics are not included. Printed copies of the yearbook will be available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock # ERS-RCS-1999, $21. ERS-NASS accepts MasterCard and Visa. --------------------------------------------------------------------------- Large Area Expansion, Higher Yields Drive Record U.S. Crop The 1999 U.S. rice crop is forecast at 211.7 million cwt, up almost 13 percent from last year and the largest on record. The bumper crop stems from an 8-percent increase in plantings to 3.6 million acres--the second highest on record- -and a 5-percent increase in average yield. The area expansion was primarily due to relatively attractive prices for rice at planting compared with alternative crops, especially soybeans in the South. While rice prices had slowly been declining for almost 2 years, they had not dropped as fast as prices for soybeans, the primary rotation crop in the South. Plantings expanded in every State except Texas, with record seedings reported for Arkansas and Missouri. Plantings were a near-record in Mississippi. Based on farmer surveys conducted in early November, the national average yield is forecast at 5,929 pounds per acre, up from 5,669 pounds a year earlier, but still below the record 6,120 pounds in 1996. Yields are up in all States except Mississippi and Missouri, where they are down only slightly. Record yields are projected for Louisiana and Texas. Although California's yield is projected up 2 percent from last year's extremely low level, it is still one of the lowest since 1982. Production is up in every State, with record crops projected for Arkansas, Louisiana, and Missouri. Mississippi's crop is projected to be a near-record. Production is up for all grain types as well. Long grain production is projected at a record 152 million cwt, up 7 percent from 1998. Medium grain production is projected 55.9 million cwt, up 26 percent but still below the 1997 crop. The short grain crop--mostly grown in California--is projected at 3.8 million cwt, nearly double a year earlier. Ending Stocks Largest Since 1986/87 U.S. supplies in 1999/2000 (August-July) are projected at a record 244.4 million cwt, up 8 percent from a year earlier. The larger supplies result from the record crop and larger imports that are expected to more than offset a smaller carryin. Beginning stocks, estimated at 22 million cwt, are down 21 percent from a year earlier. Imports are projected at a record 10.8 million cwt, up 2 percent from a year earlier and continuing a long-term expansion. In contrast to larger supplies, total use is projected to decline 5 percent to 195 million cwt, with both total domestic use and exports falling. Total domestic use, which includes residual (unreported processing and marketing losses), is projected to drop more than 6 percent to 113 million cwt. Excluding residual, domestic consumption is actually projected to increase 2 percent to a record 106.5 million cwt due to rising food use. Exports are projected to drop 2 percent to 82 million cwt as larger milled rice exports do not fully compensate for a big drop in rough rice exports. With total supplies exceeding total use, ending stocks in 1999/2000 are projected to more than double to 49.4 million cwt. This yields a stocks-to-use ratio of 25.3 percent, up from 10.7 percent a year earlier. Ending stocks and the stocks-to-use ratio are the largest since 1986/87. Long grain ending stocks are projected at 36.5 million cwt, up 22.6 million from a year earlier, producing a stocks-to-use ratio of 26.2 percent. Both are the highest since 1985/86. Although combined medium/short grain stocks are projected to nearly double to 11.8 million cwt, they will remain below the decade average. The medium/short grain stocks-to-use ratio is projected at 21 percent, up 8 percentage points from 1998/99 but still close to the decade average. U.S. Prices Drop on Record Supplies, Weaker International Prices U.S. farm prices, which had been largely supported since 1996/97 by record rough rice exports to Latin America, began slipping this spring on expectations of near-record U.S. plantings, the conclusion of huge rough rice shipments to Brazil, and declining international prices. The U.S. season- average farm price is projected to be $5.50 to $6.00 per cwt in 1999/2000, down from $8.83 in 1998/99 and $9.70 in 1997/98. The projected 1999/2000 season-average price is the lowest since at least 1992/93. Prices for long grain rice have declined the most. Medium grain prices were supported throughout 1998/99 by a very weak 1998 harvest in California--where the bulk of the U.S. medium crop is produced--and smaller plantings in the South. With the start of California's 1999 harvest in late September, medium grain farm prices began to slip as well. Prices for U.S. long grain milled rice have declined since the summer of 1997. U.S. No. 2, 4 percent brokens (fob Houston) are currently quoted at about $300 per ton, down from $369 in 1998/99 and $415 in 1997/98. Little export business beyond PL-480 sales, a large price premium over comparable grades of Thai rice, and record U.S. supplies are behind the weaker U.S. milled prices. Prices for California medium grain milled rice, which were at near-record levels during most of 1998/99, have declined since September on expectations of a large California crop in 1999. Prices for California No. 1, 4 percent brokens are currently quoted at $441 per ton, down from $470 in 1998/99. Bumper Crops Worldwide Push Global Stocks to Record Highs World rice production is projected at a record 396.8 million tons (milled basis) in 1999/2000, up more than 1 percent from a year earlier. Record or near-record crops in major Asian producing countries--China, India, Indonesia, Bangladesh, Vietnam, and Thailand--more than compensate for expected smaller crops in Latin America and the Middle East. World consumption is projected at 394.4 million tons, a record and up more than 1 percent. With production exceeding consumption, ending stocks are projected to climb 4 percent to 59.8 million tons in 1999/2000, the largest on record. The projected stocks-to-use ratio is 15.2 percent, up slightly from last year and the largest since 1992/93. World trade is projected at 23.2 million tons in 2000, down more than 4 percent from 1999 and 15 percent below the 1998 record. Much smaller Asian imports are expected to more than offset larger imports by Latin America and the Middle East. In 1999, both Asia and Latin America imported much smaller amounts of rice than in 1998 as their crops recovered from El Nino damage in 1997/98. Since late 1998 when Indonesia and the Philippines completed their record purchases, international rice prices have generally declined. Prices for Thai 100 percent grade B were quoted at $229 per ton in early November, down from $284 in 1998/99 and $302 in 1997/98. The weaker prices are primarily due to much smaller global import demand and abundant export supplies worldwide. This issue of the Rice Situation and Outlook Yearbook contains three special articles. The first article compares net returns to rice and soybeans on rice land in Arkansas. The second examines the potential impacts of herbicide- resistant rice varieties in the U.S. The final article discusses issues important to U.S. rice trade in the upcoming WTO Round. Printed copies of the Rice Situation and Outlook Yearbook will be available in about 4 weeks. For more information, contact Nathan Childs (202) 694-5292. The text of the full report will also be available electronically via the ERS website at http://www.econ.ag.gov. END_OF_FILE