RICE YEARBOOK--SUMMARY November 29, 2000 November 2000, ERS-RCS-2000 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-2000, $21. ERS-NASS accepts MasterCard and Visa. --------------------------------------------------------------------------- Smaller Supplies, Weaker Exports Projected for 2000/01 U.S. Rice Market Total U.S. rice supplies for 2000/01 are projected at 230.2 million hundredweight (cwt) (rough basis), down more than 3 percent from a year earlier's record. A 7-percent drop in production to 192.4 million cwt is behind the projected smaller total supplies. In contrast, beginning stocks and imports are up slightly from a year earlier. U.S. rice plantings for 2000/01 are estimated at 3.11 million acres, down 12 percent from a year earlier's near record. Lower prices, as well as some drought-related problems in Louisiana, are behind this year's decline in rice acreage. In contrast, the average yield is projected to be a record 6,236 pounds per acre, up 6 percent from a year earlier. Generally good weather in most rice producing areas and a greater share of total U.S. plantings in California--which achieves the highest yields in the United States--are behind the stronger yield this year. Long grain accounts for almost all of the decline in production. Long grain production in 2000/01 is projected at 130.6 million cwt, down 14 percent from a year earlier's record. Low prices at planting were behind a major drop in long grain plantings across the South. In contrast, combined medium/short grain production is projected to rise 14 percent to 61.8 million cwt, the largest since 1994/95. The larger crop is the result of expanded acreage in both California--which produces the bulk of the U.S. medium/short grain crop- -and in the South. In fact, California is expected to produce a record crop in 2000/01. At planting, medium grain prices were substantially higher than long grain prices. Total use is projected at 202.9 million cwt in 2000/01, down nearly 4 percent from a year earlier's record. Exports account for all of the expected decline in total use. Domestic disappearance is projected to increase fractionally. U.S. rice exports are projected to drop more than 10 percent to 80 million cwt, the lowest since 1996/97. While rough rice exports are projected to remain virtually unchanged at 25 million cwt, milled rice exports are projected to drop 14 percent to 64 million, the smallest in more than 20 years. Smaller U.S. supplies and expectations of very strong price competition in the international market are behind the substantial drop in U.S. milled rice exports. With both total supply and total use each declining by nearly 8 million cwt, ending stocks are projected to drop just fractionally to 27.3 million cwt in 2000/01. The stocks-to-use ratio is projected at 13.4 percent, barely above a year earlier's 13.1 percent. U.S. Long Grain Supplies Projected To Drop 10 Percent in 2000/01 The market outlook is very different by grain type. Long grain supplies are projected to drop more than 10 percent, to 155 million cwt, the smallest since 1997/98. A 14-percent drop in production accounts for the smaller supplies. Long grain beginning stocks and imports are up from 1999/2000. Total long grain use is projected to drop 10 percent to 142 million cwt, also the lowest since 1997/98. Both domestic use and exports of long grain rice are projected to be well below a year earlier. Long grain ending stocks are projected to drop 15 percent to 13.3 million cwt, the lowest since 1995/96. The resulting stocks-to-use ratio is 9.3 percent, down from 9.9 percent in 1999/2000 and the second lowest since supply and use tables were first reported by grain type in 1982/83. The medium/short grain market faces a very different outlook in 2000/01. Total supplies are projected to rise 16 percent to 73.4 million cwt, the largest since 1994/95. Both beginning stocks and production are up substantially from a year earlier. Total medium/short grain use is projected to rise 15 percent to 60.9 million cwt. Domestic use is expected to account for all of the increase. Exports are projected at 18 million cwt, virtually unchanged from a year earlier. The net result is a 20-percent increase in ending stocks to 12.5 million cwt, the largest since 1995/96. The stocks-to- use ratio is projected to rise slightly to 20.6 percent. The 2000/01 season-average farm price is projected at $5.75 to $6.25 per cwt, with a mid-point of $6.00, nearly unchanged from a year earlier's $6.11. However, the price situation by grain type is expected to be very different. Long grain prices have already risen from the recent lows of last spring and summer, a result of expected tighter supplies and several large food aid purchases early in the 2000/01 market year. In contrast, medium/short grain prices began dropping at harvest in both the South and California from the relatively high levels of the past 2 years. The recent decline is due to much larger supplies this year. U.S. prices for both long and medium grain milled rice are well below a year earlier. In late November, prices for high quality southern long grain (U.S. No. 2, 4-percent brokens, fob mill in Houston) were quoted at $276 per ton, down from almost $300 a year earlier. However, U.S. long grain milled prices were as low as $248 in May before rising on several large food aid purchases and expectations of tight supplies in 2000/01. Prices for California medium grain milled rice (U.S. No. 1, 4-percent brokens, fob mill in Sacramento) were quoted at $342 per ton in late November, down from $452 a year earlier. Prices for California medium grain have been dropping since mid-summer on expectations of a record California harvest. Abundant Supplies Projected for Major Exporters in 2001 Since last summer, international rice prices have been the lowest in seven years, a result of bumper crops in 1999/2000 in most major exporting countries, and, except for Iran, no significant production problems were reported in a major importing country. For 2000/01, even with global rice production projected to drop more than 1 percent from a year earlier's record to 397.7 million tons (milled basis), there is little expectation of any price strengthening. This forecast assumes normal weather for the remainder of the 2000/01 market year. A major weather problem could alter this projection. China accounts for the bulk of this year's expected reduction in global rice production. However, China is expected to have plenty of supplies for both its domestic market and to expand exports. Other major exporters--Thailand, Vietnam, and India--are expected to produce record- or near-record crops in 2000/01. Drought reduced Pakistan's crop in 2000/01, and the United States' crop is down due to weaker plantings. With the exception of a severe drought in parts of the Middle East that has reduced crops in Iran and Iraq, most major importers are expecting to harvest bumper crops in 2000/01. Global rice trade is projected at 24.6 million tons in 2001, up 8 percent from a year earlier but still 10 percent below the 1998 record of 27.3 million tons. On the import side, Indonesia accounts for the bulk of the increase in global trade, with imports expected to rise 1 million tons to 3 million, a result of steady production and rising population. Iran and North Korea are the only other countries where imports are projected to rise more than 100,000 tons in 2001. Smaller increases in imports are projected for the Philippines, Saudi Arabia, Russia, Cuba, Guinea, and China. In contrast, imports are projected to decline in 2001 for Bangladesh, Malaysia, and South Africa. On the export side, Thailand, Vietnam, India, and China are all expected to ship more rice in 2001. Pakistan's exports are projected to drop slightly in 2001, and U.S. exports are expected to remain unchanged from 2000. Both Australia and Egypt are projected to export more rice in 2001, indicating strong competition with the United States in the eastern Mediterranean. Global rice prices have remained relatively unchanged since July. Quoted prices for Thai 100 percent Grade B have averaged about $190 per ton since mid-July, with prices trading within a very narrow range around this level. These are the lowest quoted prices for any significant period of time since the late 1980's. Prices for Vietnam's 5 percent brokens have remained between $175 to $185 since July, even with severe flooding during much of late summer and fall. Printed copies of the Rice Situation and Outlook Yearbook will be available in about 3 weeks. The 2000 Rice Yearbook contains five special articles. The first examines the structure of U.S. rice farming based on data from the 1997 Census of Agriculture. The second describes recent trends in U.S. rice consumption based on data from the 1998/99 milled rice distribution survey. The third article describes the U.S. rice export market. The fourth gives an overview of procedures and sources of information used by the Rice Interagency Commodity Estimates Committee in developing monthly forecasts. The final special article examines some economic issues that will be critical to farmers in deciding whether to adopt biotech rice when it becomes available. For more information, contact Nathan Childs 202-694-5292 or Bill Chambers 202-694-5312. The text of the report will also be available electronically via the ERS website at www.ers.usda.gov. END_OF_FILE