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U.S. Rice Outlook Summary (July 14, 2015)

Core Content Overview

The Rice Outlook report from the Economic Research Service (ERS) provides a detailed analysis of U.S. and global rice production, use, exports, and prices for the 2015/16 season. It highlights the impact of weather conditions, market dynamics, and policy changes on rice supply and demand.

U.S. Domestic Outlook

Production Forecast

• 2015/16 U.S. Rice Production: Forecast at 207.0 million cwt, a 5.5% decrease from the previous forecast and 6% below the 2014/15 crop.
• Reasons for Reduction: Smaller area estimate, lower long-grain prices, drought in California, and water restrictions in Texas.
• Yield: Average yield remains at 7,544 pounds per acre, nearly unchanged from last month.
• Total Supply Forecast: Reduced by 4% to 278.4 million cwt, nearly the same as the previous year.

Plantings

• Total Plantings: Estimated at 2.77 million acres, down 5% from March intentions and 6% below the previous year.
• Key States:
  • Arkansas: Down 6% to 1.39 million acres, with long-grain accounting for all the decline.
  • California: Down 11% to 385,000 acres, the lowest since 1991/92, due to a fourth year of drought.
  • Louisiana: Down 3% to 450,000 acres, with medium-grain accounting for most of the decline.
  • Mississippi: Down 5% to 181,000 acres.
  • Missouri: Slightly unchanged at 215,000 acres.
  • Texas: Down 3% to 145,000 acres, the smallest among the six producing states.

Crop Development

• As of July 5, 25% of the U.S. crop was headed, 10 percentage points above the 5-year average.
• Delta States (Arkansas, Louisiana, Mississippi) showed stronger-than-expected progress.
• Crop Conditions:
  • Louisiana: 62% of the crop rated in good or excellent condition, down from 80% the previous year.
  • Texas: 53% rated in good or excellent condition, unchanged from last year's drought-reduced levels.
  • Arkansas: 69% rated in good or excellent condition, up from 62% the previous year.

Stocks and Use

• Carryin: Increased slightly to 46.4 million cwt, up 46% from a year earlier.
• Ending Stocks: Reduced to 38.4 million cwt, down 17% from a year earlier.
• Domestic and Residual Use: Lowered to 130.0 million cwt, still 1% above the previous year.
• Exports: Forecast at 110.0 million cwt, an 8% increase from the previous year, driven by competitive U.S. prices.

Price Forecasts

• Long-grain rough-rice prices: Raised to $10.90–$11.90 per cwt, up 90 cents from last month's forecast.
• Medium- and short-grain prices: Raised to $13.00–$14.00 per cwt, up 70 cents from last month.
• California medium- and short-grain prices: Forecast at $20.50–$21.50 per cwt, up 20 cents from last month.
• Southern medium- and short-grain prices: Forecast at $14.30–$15.30 per cwt, down 20 cents from last month.

International Outlook

Global Production

• Global Rice Production (milled basis): Forecast at 480.3 million tons, down 1.4 million tons from last month but up 4.1 million tons from a year earlier.
• Highest on record, driven by expanded area, especially in Bangladesh, India, the Philippines, and Thailand.
• Production Reductions:
  • Thailand: Down 0.8 million tons to 19.0 million tons due to severe drought.
  • U.S.: Down 381,000 tons to 6.57 million tons.
  • Australia: Down 61,000 tons to 425,000 tons.
  • North Korea: Down 100,000 tons to 1.6 million tons, the smallest since 2011/12.
  • Madagascar: Down 192,000 tons to 2.56 million tons due to erratic rainfall.
  • Afghanistan: Down 38,000 tons to 462,000 tons due to lower yield.

Global Trade

• 2016 Global Rice Trade (milled basis): Forecast at 42.1 million tons, 4% below the record but down 0.25 million tons from last month's forecast.
• Export Trends:
  • Thailand: Export forecast lowered to 10.2 million tons, still the largest exporter.
  • Vietnam, Burma, and Pakistan: Export forecasts raised due to increased production and demand.
  • Australia: Export forecast lowered to 300,000 tons, the smallest since 2011.

Consumption and Stocks

• Global Rice Consumption (2015/16): Projected at 488.8 million tons, the highest on record, driven by increased demand in China, India, and Thailand.
• Global Ending Stocks (2015/16): Declined 8.5% to 90.5 million tons, the smallest since 2007/08.
• Stocks-to-Use Ratio: Forecast at 18.5%, the lowest since 2006/07.

Key Information

• U.S. Long-grain prices are expected to rise due to tighter supply and global price increases.
• U.S. exports are forecast to increase by 8%, supported by lower prices and stronger demand in key markets.
• Global trade is expected to remain high, but Thailand’s export decline will be partially offset by Vietnam, Burma, and Pakistan.
• Carryin levels are high, especially for medium- and short-grain rice, due to delayed shipments from the previous year.
• Weather conditions significantly impact production and crop development, with drought in California and excessive rain in the Delta affecting yields.
• California's rice area has been declining for several years, with medium- and short-grain production now at its lowest since 2008/09.

Main Views

• The U.S. rice supply is tighter due to a smaller crop and lower domestic use.
• Arkansas has seen the most improvement in crop conditions and stocks.
• Thailand faces significant challenges due to drought, which has led to lower production and exports.
• Global rice stocks are declining, with India and Thailand leading the drop.
• U.S. rice imports remain record high at 25.0 million cwt, driven by increased demand for specialty rice.