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Rice Outlook Summary (RCS-17I, Sept. 14, 2017)

Core Content

This document provides an overview of the U.S. and global rice market outlook for the 2017/18 marketing year, including production, supply, use, and price forecasts, as well as international comparisons.

Main Points

U.S. Domestic Outlook

• Crop Forecast: The U.S. 2017/18 rice crop forecast was reduced by 4 percent to 179.7 million cwt, primarily due to a 87,000-acre reduction in harvested area, with the total harvested area at 2.4 million acres, down 23 percent from 2016/17.
  • Long-grain: Forecast at 127.1 million cwt, down 24 percent from the previous year.
  • Medium- and short-grain: Forecast at 52.6 million cwt, down 9 percent from the previous year.
• Supply Forecast: Total U.S. rice supply for 2017/18 is 250.0 million cwt, down 15 percent from the previous year.
• Use Forecast: Domestic and residual use is forecast at 115.0 million cwt, down 12.5 percent from the previous year.
• Exports Forecast: Total U.S. rice exports are forecast at 106.0 million cwt, down 3 percent from the previous forecast and 9 percent from the previous year.
• Ending Stocks: Ending stocks are projected at 29.0 million cwt, down 37 percent from the previous year and the smallest since 2003/04.
• Farm Prices: Season-average farm prices for both classes of rice and both growing regions are raised, reflecting tighter supplies and higher prices.

State-Level Production and Harvest Data

• Arkansas: Largest reduction in production, down 24 percent to 127.1 million cwt, with harvested area at 1.09 million acres, the smallest since 1987/88.
• Mississippi: Production down 39 percent to 118,000 acres, the smallest since 1977/78.
• Louisiana: Harvested area increased slightly to 395,000 acres, with production down 3 percent.
• Texas: Production down 13 percent to 171,000 acres, with harvested area nearly complete by September 10.
• California: Production down 7.5 percent to 458,000 acres, due to heavy winter rains and spring flooding.

Price Trends

• Cash and Spot Prices: Increased in July, with the long-grain price reaching $9.99 per cwt, the highest since September.
• Farm Prices: Raised for both long-grain and medium- and short-grain rice, with the season-average farm price for all rice at $12.70-$13.70 per cwt, up 50 cents from the previous forecast and 2.9 percent above the previous year.

International Outlook

• Global Production: Forecast at 483.4 million tons, up 0.8 million tons from the previous forecast but 3.0 million tons below the 2016/17 record.
• Production Revisions:
  • Raised for India, Burma, Peru, Chile, and Kazakhstan.
  • Lowered for China, Bangladesh, and the U.S..
• Consumption Forecast: Raised 1.1 million tons to 480.2 million tons, with China accounting for the largest increase in ending stocks.
• Ending Stocks: Projected to increase 3 percent to 123.5 million tons, the highest since 2001/02.

Key Information

• Rice Chart Gallery Update: Scheduled for September 18, 2017, with the next release on October 16, 2017.
• Major Export Markets:
  • Rough-rice: Mexico, northern South America, Central America, and the eastern and southern Mediterranean.
  • Milled-rice: Northeast Asia (Japan, South Korea, Taiwan), the Middle East, and Canada.
• Competitors: China, Egypt, and Australia are major competitors in the medium- and short-grain market.
• Supply and Use Revisions:
  • Domestic and residual use decreased by 2.5 million cwt.
  • Imports increased slightly, while exports decreased by 3.0 million cwt.
• Yield Trends:
  • Arkansas, Louisiana, and Missouri saw higher yields.
  • Texas and California experienced slightly lower yields due to adverse weather and flooding.

Summary Table

Conclusion

The U.S. rice market for 2017/18 is characterized by reduced production, lower supply, and higher prices due to adverse weather, lower expected returns, and shifts in harvested area. Internationally, India, Burma, and Peru saw increased production, while China, Bangladesh, and the U.S. experienced reductions. Global ending stocks are expected to rise, reflecting stronger production than consumption.