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Rice Outlook - October 2011

31 October 2011

USDA ERS

There were several revisions to the U.S. rice supply and use tables this month. On the supply side, the crop forecast was reduced nearly 4.0 million cwt to 186.9 million cwt based on a smaller yield estimate reported by NASS.

The 2011/12 average yield was lowered 150 pounds per acre to 7,123 pounds, still the second highest on record. There were no significant revisions to beginning stocks and imports this month. The smaller crop resulted in a nearly 2-per cent reduction in the 2011/12 total supply forecast to 254.4 million cwt, 15 per cent below a year earlier.

The 2011/12 total use forecast was lowered 2.0 million cwt to 218.0 million based on a revised export forecast. Total exports were lowered 2.0 million cwt to 91.0 million cwt, with both long-grain and combined medium- and short-grain export lowered 1.0 million cwt. Total domestic and residual use of all-rice remains projected at 127.0 million cwt, almost 8 per cent smaller than the year-earlier record.

On balance, these supply and use revisions resulted in a 5-per cent reduction in the 2011/12 ending stocks forecast to 36.4 million cwt. The 2011/12 US season-average farm price (SAFP) for US long-grain rice remains projected at $13.50-$14.50 per cwt, well above the $11.10 estimated for 2010/11. The combined medium- and short-grain 2011/12 US SAFP was raised 50 cents on both the high and low ends to $15.50- $16.50 per cwt, down from $18.40 a year earlier. The 2011/12 global rice production forecast was raised by 3.0 million tons this month to 461.4 million tons (milled basis), up more than 2 per cent from 2010/11 and the highest on record. India accounts for most of the upward revision, while crop projections were lowered for the Philippines, Pakistan, and the United States.

Global disappearance in 2011/12 is projected at a record 457.8 million tons, up 1.8 million tons from last month’s forecast and more than 10 million tons larger than 2010/11. Global ending stocks for 2011/12 are projected at 101.41 million tons, up 2.8 million tons from last month’s forecast and 4 per cent larger than a year earlier. Upward stock revisions for Bangladesh, India, the Philippines, and Vietnam were partially offset by decreases for Russia and the United States. The 2012 global trade forecast was raised 1.2 million tons this month to 33.0 million tons (milled basis), up 4 per cent from last month, but down 4 per cent from the 2011 record. Export projections for 2012 were raised for India and Vietnam, but lowered for Pakistan. Import forecasts for 2012 were raised for Nigeria and Philippines.

Trading prices for Thailand’s high- and medium-quality grades of non-specialty rice have fluctuated between $600 and $625 since the first week of September, as buyers and sellers await the October implementation of the country’s new paddy rice mortgaging scheme. In Vietnam, prices fell less than 1 per cent over the past month. Global trading prices have been supported since June by the announcement of Thailand’s just-implemented paddy mortgage scheme. US long-grain milled-rice prices have fallen over the past month, partially in response to weak export demand for US rice. Prices for California rice were unchanged over the past month.

Domestic Outlook

US 2011/12 Rice Crop Projection Lowered 2 per cent to 186.9 Million Cwt

The 2011/12 US rice production forecast was lowered almost 4.0 million cwt this month to 186.9 million cwt. The crop is down 23 per cent from the year-earlier record and is the smallest US rice crop since 1998/99. This month’s downward revision is based on a lower yield forecast. At 7,123 pounds per acre, the average field yield is down 150 pounds from last month’s forecast, but 6 per cent above a year earlier and the second highest on record. Harvested area remains estimated at 2.624 million acres—27 per cent below a year earlier and the smallest since 1987/88.

By class, the long-grain production estimate was lowered 2.5 million cwt to 116.8 million, down 36 per cent from a year earlier and the smallest since 1996/97. Almost all US long-grain rice is grown in the South. The combined medium- and short-grain production estimate was lowered 1.5 million cwt to 70.1 million cwt, still 17 per cent higher than a year earlier and the largest on record. California typically produces more than two-thirds of the US medium- and short-grain crop and accounts for the bulk of US exports.

Yield estimates were lowered this month for all reported States except Louisiana and Missouri, which were unchanged from last month. The Texas 2011/12 yield was lowered 500 pounds per acre. The Texas rice area has experienced severe heat and drought this year. Average yield estimates for California and Mississippi were each lowered 100 pounds per acre. Arkansas’s yield was reduced 200 pounds per acre. The Delta rice growing area experienced severe flooding early in the season, followed by a second consecutive extremely hot summer.

Arkansas accounts for more than half of the almost 4.0 million cwt reduction in the 2011/12 crop projection. The Arkansas crop projection was lowered 3 per cent from last month’s forecast. The Texas crop projection was reduced 7 per cent. Production forecasts for California and Mississippi were each reduced 1 per cent this month.

On an annual basis, rice plantings declined in 2011/12 in all reporting States except California. In Arkansas, total rice plantings dropped 33 per cent to 1.2 million acres, the smallest since 1989/90. Missouri’s plantings declined 44 per cent to 143,000 acres, the smallest since 1997/98. Rice plantings in Mississippi dropped 49 per cent from a year earlier to 155,000 acres, the smallest since 1977/78. The severe flooding in the Delta early this spring contributed to the area decline.

In Louisiana, rice plantings dropped 21 per cent to 425,000 acres. Texas plantings of 183,000 acres are down 3 per cent from a year earlier. In contrast to the South, plantings in California increased 6 per cent to 591,000 acres, one of the highest on record for the State. Unlike long-grain prices, which declined in 2010/11, US medium - and short-grain rough-rice prices remained high in 2010/11—a factor behind the expansion in California plantings in 2011/12.






Yields are projected higher in 2011/12 than a year earlier in all reported States except Texas. At 6,800 pounds per acre, the Arkansas average field yield is up 5 per cent from a year earlier. In Louisiana, the average field yield remains estimated at a record 6,400 pounds per acre, also up 5 per cent from a year earlier. Mississippi’s average yield is estimated at 7,100 pounds per acre, up almost 4 per cent from a year earlier. The average field yield in Missouri remains estimated at 7,200 pounds per acre, an increase of 11 per cent from 2010/11. The Texas field yield is estimated at 7,000 pounds per acre, down 2 per cent from last year. Finally, in California, field yields are projected at 8,300 pounds per acre, almost 4 per cent above a year earlier.

Production declined in 2011/12 in all reported States except California. The smaller crops are largely the result of reduced plantings. In Arkansas, rice production is estimated at 78.5 million cwt, down 32 per cent from last year. Louisiana’s crop is projected at 26.9 million cwt, a decline of 18 per cent from a year earlier. Mississippi’s production is projected at 10.9 million cwt, a decline of 48 per cent from a year earlier and the smallest since 1987/88. Production in Missouri declined 43 per cent to 9.2 million cwt, the smallest since 1998/99. At 12.6 million cwt, production in Texas is 6 per cent below a year earlier, a result of both reduced plantings and a lower yield. In contrast, production in California is projected to increase 10 per cent to 48.8 million cwt, the second highest on record. The larger California crop is a result of both expanded plantings and a higher yield.

Pace of 2011/12 California Harvest Remains Behind the 5-Year Average

For the week ending October 9, 74 per cent of the US 2011/12 crop had been harvested, behind 84 per cent last year and behind the US 5-year average of 80 per cent. Harvest pace is behind normal in California and parts of the Delta. In Arkansas, 77 per cent of the crop was reported harvested by October 9, well behind 94 per cent a year earlier and behind the State’s 5-year average of 81 per cent. Missouri’s crop was reported 69 per cent harvested by October 9, well behind a year-earlier’s 99 per cent and behind the State’s 5-year average of 78 per cent. Elsewhere in the Delta, Mississippi’s crop was reported 90-per cent harvested, behind 98 per cent last year, but ahead of the State’s 5-year average of 84 per cent.

In California, just 22 per cent of the 2011/12 crop was reported harvested by October 9, slightly ahead of a year earlier, but well behind the State’s 5-year average of 52 per cent. Planting of the 2011/12 California rice crop was delayed several weeks by rain and temperatures were abnormally cool during late-summer. Harvest of the main crop was complete by October 9 in both Texas and Louisiana, typical for both States. Harvest of the ratoon crop—a partial second-crop achieved from the stubble of the harvested main crop—has just begun in Texas and will continue in both Gulf States this fall.

October 2011

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