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Rice Outlook Summary (RCS-18I, September 14, 2018)

Core Content Overview

This report provides a detailed analysis of the U.S. and global rice market outlook for the 2018/19 market year, covering production, supply, use, exports, imports, and prices. It also includes a review of the 2017/18 market year for context and comparison.

U.S. Domestic Outlook

2018/19 Production Forecast

• Total U.S. rice production is forecast at 219.5 million cwt, up 4 percent from the previous estimate, mainly due to a larger area planted and a slightly higher yield.
• Long-grain production is up 5.8 million cwt to 159.5 million cwt, and medium- and short-grain production is up 2.9 million cwt to 60.0 million cwt.
• Harvested area increased by 3.5 percent to 2.9 million acres, with Arkansas contributing the most to the expansion (up 29 percent).
• Yields are forecast to be higher than a year earlier in California and Louisiana, but lower in Mississippi, Missouri, and Texas.
• Arkansas accounts for 40 percent of the 8.6 million cwt increase in U.S. production, while Mississippi and Texas also saw significant growth due to expanded area.

Supply and Use Revisions

• Total supply is forecast at 275.9 million cwt, up 10 percent from 2017/18, driven by a 23 percent increase in production.
• Domestic and residual use is forecast at 133.0 million cwt, up 2.0 million cwt from the previous forecast.
• Exports remain at 98.0 million cwt, up 13 percent from 2017/18, with a 1.0 million cwt shift from rough-rice to milled rice exports and from medium- and short-grain to long-grain exports.
• Ending stocks are forecast at 44.9 million cwt, up 53 percent from 2017/18, due to increased production and lower beginning stocks.

Farm Prices

• Season-average farm prices for both classes of rice in both regions are forecast to be lower than the previous month and a year earlier, primarily due to larger supplies and recent price movements.
• Long-grain SAFP is projected at $10.30-$11.30 per cwt, with a midpoint down 90 cents from 2017/18.
• Medium- and short-grain SAFP is projected at $10.60-$11.60 per cwt, with a midpoint down $1.00 from 2017/18.
• California's medium- and short-grain SAFP is projected at $15.80-$16.00 per cwt, with a midpoint just 30 cents below 2017/18.

2017/18 Revisions

• Ending stocks for 2017/18 were reduced by 5.4 million cwt to 29.4 million cwt, based on August Rice Stocks data.
• Imports were reduced by 0.1 million cwt to 26.9 million cwt, with long-grain imports down 0.2 million cwt.
• Exports were increased by 0.5 million cwt to 87.0 million cwt, with long-grain up 0.3 million cwt and medium- and short-grain up 0.2 million cwt.
• Domestic and residual use for 2017/18 was increased by 4.8 million cwt to 134.8 million cwt, with long-grain up 2.6 million cwt and medium- and short-grain up 2.2 million cwt.

International Outlook

Global Production Forecast

• Global rice production for 2018/19 is forecast at 487.2 million tons, down 0.4 million tons from the previous forecast, and 1 percent below the 2017/18 record.
• Production declines are expected in China, Bangladesh, Peru, the Philippines, and Guyana, while India, Japan, and the United States saw increases.
• China accounts for the bulk of the decline, due to smaller area and adverse weather.
• Bangladesh experienced a 300,000-ton reduction due to harvest issues and flooding.
• Peru saw a 80,000-ton reduction due to smaller area.
• India and Japan had upward revisions due to higher yields and inclusion of undersized grains.
• United States and Bangladesh are projected to increase production the most.

Global Consumption and Trade

• Global rice consumption for 2018/19 is forecast at a record 488.4 million tons, up 0.6 million tons from the previous forecast.
• India, Japan, and Burma account for most of the upward revision in global consumption.
• Consumption forecasts were lowered for China, Bangladesh, Sri Lanka, and the Philippines.
• Global trade is projected at a record 49.7 million tons, up 0.3 million tons from the previous forecast.
• Exports from Brazil and India were increased, while Burma's export forecast was lowered.
• Thailand and Vietnam saw little change in export prices, while U.S. prices declined for both rough and milled rice.

Stocks and Stocks-to-Use Ratio

• Global ending stocks for 2018/19 are forecast at 144.4 million tons, down 1.2 million tons from 2017/18, the first decline since 2006/07.
• China is expected to hold around 70 percent of global stocks.
• Global stocks-to-use ratio is projected at 29.6 percent, down from 30.1 percent a year earlier.

Key Information

• U.S. production increased by 4 percent, with Arkansas being the largest contributor.
• Ending stocks for 2018/19 are up 53 percent due to larger production and lower beginning stocks.
• Farm prices are expected to be lower due to increased supply and market competition.
• Global production is down 0.4 million tons, with China as the main producer affected by weather issues.
• Global trade is expected to increase due to stronger U.S. exports and higher supply in key markets.
• India is projected to maintain record exports in 2019, while Burma saw a reduction.
• China is expected to dominate global rice stocks, with a stocks-to-use ratio of 29.6 percent.

Summary Highlights

• U.S. production increased significantly, with Arkansas and Mississippi leading the expansion.
• Global production declined slightly, with China as the primary affected region.
• U.S. exports are expected to increase by 13 percent, driven by larger supplies and competitive pricing.
• Ending stocks in the U.S. are up 53 percent, with long-grain and medium- and short-grain both seeing increases.
• Global consumption reached a record high, with India, Japan, and Burma as key contributors.
• U.S. farm prices are lower due to increased supply and market dynamics.
• Global trade is expected to rise, with India and Brazil as major export contributors.