Rice YEARBOOK -- SUMMARY November 27, 2007 November 2007, ERS-RCS-2007 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The text of the yearbook will be available electronically about 2-3 weeks following this summary release. ----------------------------------------------------------------------------- U.S. 2007/08 Season-Average Farm Price Projected Highest Since 1980/81 The 2007/08 U.S. season-average farm price (SAFP) is projected at $10.75-$11.25 per cwt, up from $9.74 a year earlier and the highest since $12.80 in 1980/81. This is the third consecutive year of a higher U.S. SAFP for rice. The mid- October reported cash price for rough-rice of $10.70 per cwt is the highest since September 1981. U.S. rough and milled prices are being pushed higher by strong prices for other grains, rising world rice prices, and the falling value of the dollar. Price quotes for Thailand’s high-quality long-grain milled rice—a benchmark for global trading prices—are up more than 16 percent from a year earlier and 8 percent higher than in August. The recent price strength in global markets has largely been due to export bans invoked by Vietnam and India (non-basmati only), a stronger baht, expectations of declining global stocks, and higher overall commodity prices. For the week ending November 26, Thailand’s 100-percent grade B (FOB vessel, Bangkok) was quoted at $361 per ton, the highest since January 1997. Thailand’s prices would likely be higher if the Government of Thailand had not recently released about a million tons of rice purchased in previous years under its intervention program. U.S. export prices have risen sharply since the start of the 2007/08 market year. Price quotes for U.S. long-grain milled rice are up 24 percent since the beginning of August. Price quotes for California milled rice have also risen since early August, despite a larger California crop and expectations of a larger carryout in 2007/08. A major factor boosting California prices is the expectation of a very small Australian harvest in April-May 2008 that will sharply reduce Australia’s exports. U.S. price quotes for both long- and medium-grain rice are the highest since early 1994. U.S. 2007/08 Average Field Yield Projected at a Record 7,247 Pounds per Acre The 2007/08 U.S. rough-rice crop is estimated at 197.9 million cwt, up 2 percent from a year ago, but still 15 percent below the 2004/05 record. Medium/short- grain accounts for all of the production increase. The long-grain crop is almost 3 percent smaller than a year ago. California and Louisiana account for most of the 2007/08 increase in U.S. rice production. This year’s larger rice crop is the result of a record yield. At 7,247 pounds per acre, the 2007/08 average yield is almost 6 percent higher than a year ago. Yields are higher in every reporting State except Texas, with record yields estimated for Arkansas, Louisiana, Mississippi, and Missouri. In contrast, U.S. plantings declined 3 percent to 2.75 million acres, a result of strong prices for competing crops and very high fuel and fertilizer prices. Arkansas and Missouri account for the bulk of the area decline. Total U.S. rice supplies in 2007/08 (August-July) are projected to be up slightly from a year earlier, as the larger crop and record imports more than offset a smaller carryin. At 258.7 million cwt, total supplies are 1.4 million cwt above last year. Medium/short-grain accounts for all of the supply increase. Long-grain supplies are projected to decline 4 percent. At 39.3 million cwt, beginning stocks in 2007/08 are 9 percent below a year earlier, with long-grain accounting for all of the decline. Imports are projected at a record 21.5 million cwt, up more than 4 percent from 2006/07, with both long- and medium/short-grain imports the highest on record. Imports have more than doubled over the last 10 years, and are growing as a share of the domestic market. Thailand supplies more than 60 percent of all U.S. rice imports. U.S. Exports Projected To Increase 17 Percent; Ending Stocks To Drop 31 Percent Total exports of U.S. rice in 2007/08 are projected to increase 17 percent to 107.0 million cwt. Expanded global trade, tight supplies in other exporting countries, and export bans by two major exporters are behind the stronger U.S. export forecast for 2007/08. Milled rice shipments (including brown rice) are projected to account for most of the increase in U.S. exports. Rough-rice exports are projected to increase about 6 percent. Both long- and medium/short-grain U.S. exports are projected to be larger in 2007/08, with long-grain accounting for the largest share of the increase. Total domestic and residual use of rice is projected to decrease almost 2 percent in 2007/08 to 124.7 million cwt, still the second-highest on record. The residual component includes unreported losses in processing, handling, and transporting, as well as any statistical errors. The size of the residual can vary from year to year. Total rice use—domestic and residual use plus exports— in 2007/08 is projected at 231.7 million cwt, up 6 percent from a year earlier. U.S. ending stocks of all rice for 2007/08 are projected at 27.1 million cwt, down 31 percent from a year ago. The stocks-to-use ratio is calculated at 11.7 percent, down from 18.0 percent a year ago. Both ending stocks and the stocks- to-use ratio are the lowest since 2003/04. Despite Record Global Production in 2007/08, Global Stocks Are Projected To Be the Lowest Since 1983/84 World rice production is projected at a record 421.2 million tons (milled basis) in 2007/08, up less than 1 percent from a year ago. China accounts for the largest share of the 2007/08 global production increase. In addition, Indonesia, Vietnam, Brazil, Thailand, Japan, Argentina, the United States, and Uruguay are projected to harvest larger crops in 2007/08. In contrast, India, Australia, North Korea, South Korea, and Turkey are projected to harvest smaller crops. This year’s larger global production is due to larger plantings; the average yield is unchanged from a year earlier. Global yields have been nearly flat since late 1990s, and growth rates achieved in the 1990s were much lower than those achieved in the 1970s and 1980s. Despite record global production, global rice supplies are projected to increase less than 1 percent in 2007/08 to 498.4 million tons, the second consecutive year of fractional growth in global rice supplies. Global supplies remain 9 percent below the 2001/02 record of 546.6 million tons. Global rice disappearance is projected at a record 424.2 million tons, an increase of more than 1 percent from a year earlier. China, India, Indonesia, the Philippines, and Bangladesh account for most of the expected increase in global rice disappearance. Global ending stocks for 2007/08 are projected at 74.1 million tons, 4 percent below a year earlier and the smallest since 1983/84. The global stocks-to-use ratio is calculated at 17.5 percent, the smallest since 1976/77. Global stocks are down almost 50 percent since the 2000/01 record of 147.3 million tons. China accounts for most of the decline in global ending stocks since 2000/01. Global Rice Trade in 2008 Projected To Be the Highest on Record Global rice trade in 2008 is projected at 29.6 million tons, up 3 percent from a year earlier and the highest on record. South Asia, East Asia, the Middle East, Sub-Saharan Africa, and Oceania are all projected to increase imports in 2008. In contrast, Southeast Asia is projected to import less rice in 2008. Imports by Latin America are virtually unchanged from 2007. By country, Iraq, Bangladesh, Australia, Afghanistan, Cuba, China, and the Philippines are all projected to increase imports by 100,000 tons or more in 2008. The increases will partially be offset by weaker imports by Iran, Indonesia, Malaysia, Turkey, and Haiti. Imports are projected to be unchanged in 2008 for Nigeria, Cote d’Ivoire, and Senegal. On the export side, Thailand, Vietnam, and China account for most of the expected increase in global exports in 2008. In addition, Uruguay, Egypt, and the United States are expected to export more rice in 2008. In contrast, India, Australia, and Guyana are projected to reduce exports in 2008, with Australia’s shipments the lowest since 1962. Exports by Cambodia are projected to remain at the 2006 near-record high. Argentina’s exports are projected to be unchanged in 2008 as well.