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Summary of the 2016/17 Rice Outlook

Core Content

The Economic Research Service (ERS) released the Rice Outlook (RCS-16E) on May 12, 2016, providing a detailed analysis of U.S. and global rice supply, demand, and market conditions for the 2016/17 marketing year. Key data and projections include:

• U.S. Rice Production: Projected at 231.0 million cwt, a 20% increase from the previous year, marking the third-largest on record. The increase is driven by a 17% rise in planted area and 2% higher yields.
• U.S. Rice Supplies: Projected at a record 298.4 million cwt, up 13% from the prior year. Long-grain rice accounts for the entire increase.
• U.S. Rice Use: Projected at 248.0 million cwt, a 12% increase. Both domestic use and exports are expected to rise.
• U.S. Rice Exports: Forecast at 113.0 million cwt, the highest since 2005/06, with long-grain exports leading the way at 81.0 million cwt.
• U.S. Rice Ending Stocks: Projected at 50.4 million cwt, the highest since 1986/87, with the stocks-to-use ratio at 20.3%, up from 19.6% in the previous year.
• U.S. Rice Prices: Expected to be lower for both classes, with season-average farm prices at $11.30–$12.30 per cwt, down from $12.20–$12.60 in 2015/16.

Main Points

Domestic Outlook

• Planting Progress: By May 8, 82% of the U.S. rice crop was planted, well ahead of the previous year and the 5-year average. The Delta region led the way, with Missouri at 98% planted and Arkansas at 93%.
• Crop Emergence: 67% of the U.S. rice crop had emerged by May 8, significantly ahead of the previous year. Missouri and Arkansas showed strong progress.
• Crop Conditions: 57% of the U.S. rice crop was rated in good or excellent condition, with Missouri and Arkansas leading. Louisiana and Texas had slightly lower ratings, though California had fair conditions.
• Imports: U.S. rice imports are projected at 24.0 million cwt, up 2% from the previous year, with Thailand and India/Pakistan being major sources. Specialty rice from Thailand and Arborio rice from Italy dominate the medium- and short-grain imports.
• Exports: U.S. exports are expected to reach 113.0 million cwt, up 13%, with Latin America as the largest market for long-grain rice and Sub-Saharan Africa and Middle East as key markets for medium- and short-grain.
• Prices: Season-average prices for both classes of rice are projected to be lower than the previous year, driven by higher supplies and increased price competitiveness.

International Outlook

• Global Rice Production: Projected at a record 480.7 million tons, up 2% from the previous year, primarily due to expanded area.
• Regional Production Growth:
  • Southeast Asia: Largest production expansion, with Vietnam, Burma, and Cambodia leading the increase.
  • India and Indonesia: Significant area and yield expansions.
  • China: Maintains its position as the largest producer, consumer, and importer, with a 0.5% increase in production.
  • Brazil: Expected to increase production by 14% due to expanded area and favorable export opportunities.
  • Thailand: Projected to increase production by 8%, but still 17% below the 2013/14 record.
  • Pakistan: Near-record production due to expanded area and higher yields.
  • Sub-Saharan Africa: Production is expected to rise less than 2%, with Nigeria and Madagascar remaining stable, while Cote d'Ivoire and Mali show notable growth.
  • Middle East: Production is projected at a record 2.5 million tons, driven by area expansion.

Key Information

• Global Trade: Projected to decline for the third consecutive year, with India and Thailand reducing exports, while Argentina, Australia, and the U.S. are expected to increase.
• Global Ending Stocks: Projected at 106.6 million tons, nearly equal to production, reflecting high global supply.
• Global Rice Prices: Have increased over the past month, likely due to tighter supply and higher demand.
• U.S. Market Share: The Western Hemisphere accounts for over 60% of U.S. exports, with Northeast Asia as the next largest market.
• Regional Variations:
  • California: Dominates medium- and short-grain exports but faces lower prices and higher supplies.
  • Southeast Asia: Recovering from El Nino impacts, with Vietnam, Burma, and Cambodia leading production increases.
  • Sub-Saharan Africa: Slight production growth, with Nigeria and Madagascar as key producers.
  • Middle East: Significant production increase, especially in Iraq.

Conclusion

The 2016/17 rice outlook highlights a record global production and increased U.S. supply, leading to higher ending stocks and lower prices. While global trade is expected to decline, U.S. exports are projected to rise due to competitive pricing and larger supplies. The Delta region in the U.S. is showing strong planting and emergence progress, while California remains behind due to drought and delayed planting. Key importers like China, Japan, and South Korea continue to shape global rice demand, and price trends are expected to remain lower for most U.S. rice classes.