The US Rice Exporters Face Intense Competition in South America

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Oct 4, 2022 | Agricultural Markets

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Long-term growth in Rice consumption in the United States is partly a result of the Nation’s changing ethnic composition and their shares of the US population. Demand for gluten-free and the continued introduction of new Rice-based products contributed to growth in domestic use.

Regarding Rice production, only four regions produce almost the entire US Rice crop: Arkansas Grand Prairie; Mississippi Delta (parts of Arkansas, Mississippi, Missouri, and Louisiana); Gulf Coast (Texas and Southwest Louisiana); and Sacramento Valley of California. Each of these regions specializes typically in a specific type of Rice, referred to in the US by the length of grain—long, medium, and short. In general, long-grain production accounts for around 75 percent of US Rice production, medium-grain production for about 24 percent, and short-grain for the remainder.

US 2022/23 Rice production forecast was raised by 1.5 million cwt to 176.0 million based on a revised yield. The average yield of 7,627 pounds per acre is 66 pounds above the previous forecast but 1 percent below the year-earlier record, according to the survey of Rice producers conducted between July 25 and August 8 by USDA’s National Agricultural Statistics Service.

Long-grain 2022/23 production was raised 1.3 million cwt to 140.3 million, and medium- and short-grain production was increased fractionally to 35.7 million cwt. The harvested area remains estimated at 2.308 million acres. Harvested area is estimated to be less than a year earlier in all reported States except Louisiana, with California accounting for the largest annual decline in Rice area. This is the second consecutive year of a sharp decrease in California Rice acreage, a result of severe drought, low reservoir levels, and water restrictions. California grows primarily medium- and short-grain Rice, typically accounting for around 75 percent of US medium- and short-grain acreage.

The US Rice Export

Even though US accounts for less than 2 percent of global Rice production, it ships almost 5 percent of global exports and is currently the fifth-largest exporter; and known it’s consistent, timely supplier of high-quality Rice in both the long- and combined medium- and short-grain global markets. Exports are thus crucial to the US Rice industry, with around 45 percent of the crop currently exported each year.

Rough Rice exports began a long-term increase in the mid-1990s as several countries in Latin America—primarily Mexico and Central American countries reduced support to producers and opened their markets to imported Rice. The United States initially faced little competition in these predominately rough Rice markets, typically accounting for 95-100 percent of their Rice imports.

However, since 2010, South American exporters shipped substantial amounts of milled Rice to the markets, and more recently, rough Rice as well, and now account for 25-30 percent of Rice imports in several of these markets. In addition, since 2008, the United States shipped Rice to Colombia and Venezuela, where US exports also face increasing competition from South American exporters.

Asian exporters shipped milled Rice into Latin America as well. However, except for shipments to Cuba, the quantities are much smaller than supplied by the South American exporters. Historically, the United States has been the only major exporter that allows rough Rice exports, although most South American exporters—all medium-sized exporters—ship some rough Rice to other Latin American countries.

Demand for US parboiled Rice began a long-term decline in the mid-1990s, with Europe and the Middle East accounting for most of the sales and the decline. The United States also exports processed Rice products such as Rice cakes, Rice mixes, and cereal, although these products remain a minimal share of US Rice exports.

The preparation of this article included public information such as https://www.usda.gov

 

 

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