rice situation and outlook robert coats, professor and extension economist southern outlook...

Rice Situation and OutlookRobert Coats, Professor and Extension Economist

Southern Outlook ConferenceSeptember 22- 24, 2008

Monthly Rice

Rice - protected commodity Given global food price inflation, the scattered global food riots, and now a global financial crisis Do you now believe that rice will be less or more protected by the major rice producing countries of the world?

U.S. Long Grain Rice Harvested By State 1996-2008, Thousand Acres

Primary U.S. rice discussion will be on long grain rice

U.S. Medium Grain Rice Harvested By State 1996-2008, Thousand Acres

U.S. Short Grain Rice Harvested By State 1996-2008, Thousand Acres

U.S. All Rice Harvested Acres, 1972-2008

1,000 Acres

U.S. rice acreage declines with increasing cost of production and increased price uncertainty

Soybeans, Weekly

Corn, Weekly

Wheat, Weekly

Rice, WeeklyFood inflation/riots

U.S. long grain, No. 2, 4%

Thai 100% grade B

Vietnam, 5 percent

RICE: WORLD MARKETS AND TRADE

Nominal Rice Quotes – 2007 to Present

One Outcome From High Rice Price Was Food Riots

Food riots were expected

April 10, 2008

Why is there a rice supply problem?

U.S. and global rice supplies aretight but adequate.

ProblemHording, processing, distribution and/or availability

World Rice Milled Consumption and Production 1979/80 – 2008/0925

7 270 27

8 285

307 31

7

318

316

315

332 34

5 351

353

354

355 36

4 369 38

1 387 39

5 409

399

400

378 39

2 401

418

420 43

0

432

258 27

1

280

279 29

4

298 30

8

310

313 32

6 336

345

353

358

359

365

368 37

9

380

388 40

0

395 41

3

408

414

409

416

421

427

429

200

225

250

275

300

325

350

375

400

425

450

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Production Consumption

Millions of Metric Tons

3 of 48 of 13

World Rice Ending Stocks 1978/79-2008/09

Millions of Metric Tons

Global ending stocks are projected to increase 4% in 2008/09

World Rice Area Harvested 1978/79-2008/09

Millions of Hectares

World Rice Milled Production 1978/79-2008/09Millions of Metric Tons

World Rice Trade Calendar Year 1980-2009Millions of Metric Tons

ProtectionismFinancial Crisis

U.S. Long Grain Rice Situation

U.S. Long Grain Rice Production 1982/83 – 2008/09

Million hundredweight

All Rice

4

U.S. Long Grain Rice Total Supply 1982/83 – 2008/09

Million hundredweight

2

U.S. All Rice Imports 1970/71 – 2008/09

Million hundredweight

U.S. Long Grain Rice Domestic and Residual 1982/83 – 2008/09

Million hundredweight

2

U.S. Long Grain Rice Total Exports 1982/83 – 2008/09

Million hundredweight

Long Grain

3

U.S. All Rice Rough Exports 1970/71 – 2008/09

Million hundredweight

3

U.S. Long Grain Rice Total Use 1982/83 – 2008/09

Million hundredweight

3

U.S. Long Grain Rice Ending Stocks 1982/83 – 2008/09

Million hundredweight

Rice Outlook

World Rice Ending Stocks 1978/79-2008/09

Millions of Metric Tons

Improvements in global supply and availability are projected… Global supply will remain tight but adequateSignificant damaging global weather event would once again raise major concerns about supply availability

World Rice Milled Consumption and Production 1979/80 – 2008/0925

7 270 27

8 285

307 31

7

318

316

315

332 34

5 351

353

354

355 36

4 369 38

1 387 39

5 409

399

400

378 39

2 401

418

420 43

0

432

258 27

1

280

279 29

4

298 30

8

310

313 32

6 336

345

353

358

359

365

368 37

9

380

388 40

0

395 41

3

408

414

409

416

421

427

429

200

225

250

275

300

325

350

375

400

425

450

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Production Consumption

Millions of Metric Tons

3 of 48 of 13

The major rice producing countries stand ready to take any required action to maintain adequate production

World Rice Trade Calendar Year 1980-2009Millions of Metric Tons

Exporting countries have and will continue to meet their commitment…Slowing global economy… Results in drop in global rice prices

ProtectionismCredit Crisis

U.S. long grain, No. 2, 4%

Thai 100% grade B

Vietnam, 5 percent

RICE: WORLD MARKETS AND TRADE

Nominal Rice Quotes – 2003 to Present

U.S. Long Grain Rice Production 1982/83 – 2008/09

Million hundredweight

USDA’s optimism about yields will not be realize which will provide rice prices some support

Financial Crisis B

earish For R

ice Prices

Dow Jones - Industrial Average

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

More weakness than strength

U.S. Dollar Index

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

CBOT Corn

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

CBOT Corn

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

CBOT Wheat

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

CBOT Wheat

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

CBOT Soybeans

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

CBOT Rough Rice

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

CBOT Rough Rice

Chart courtesy of TradingCharts.com: http://futures.tradingcharts.com/

U.S. Long Grain Rice Ending Stocks 1982/83 – 2008/09

Million hundredweight

Rice Long Grain Monthly Chart

USDA 2008/09$16.26 per cwtMarket direction

End

Arkansas Long Grain Rice Harvested Acres and Percent of U.S. Long Grain Harvested Acres, 1972-2008

1,000 Acres

September 1, 2008

California Long Grain Rice Harvested Acres and Percent of U.S. Long Grain Harvested Acres, 1972-2008

1,000 Acres

September 1, 2008

Louisiana Long Grain Rice Harvested Acres and Percent of U.S. Long Grain Harvested Acres, 1972-2008

1,000 Acres

September 1, 2008

Mississippi Long Grain Rice Harvested Acres and Percent of U.S. Long Grain Harvested Acres, 1972-2008

1,000 Acres

September 1, 2008

Missouri Long Grain Rice Harvested Acres and Percent of U.S. Long Grain Harvested Acres, 1972-2008

1,000 Acres

September 1, 2008

Texas Long Grain Rice Harvested Acres and Percent of U.S. Long Grain Harvested Acres, 1972-2008

1,000 Acres

September 1, 2008

U.S. All Rice Harvested By State 1996-2008, Thousand Acres