Having reduced their plantings in recent years due to the drought, California rice farmers are harvesting a bigger crop this season—but they are also feeling the pinch of lower market prices.
This comes as state rice inventories have been building. Marketers say lower prices now allow them to sell more rice and win back price-sensitive markets that had largely turned away from California rice.
“They’ll need to keep the price low to move the rice out,” said Nathan Childs, an agricultural economist at the U.S. Department of Agriculture. “The big crop will push prices down, making the state more competitive. And that should prevent stocks from building up too much.”
Meanwhile, harvest has been ramping up in the Sacramento Valley.
Colusa County farmer Rob Vlach said he started harvest two weeks ago, right on schedule. With several hot days during that time, he said the moisture level of the rice is “right where it’s supposed to be” for cutting.
“I think we’re just going to roll right through it now,” he said.
Relaxed water restrictions in Northern California this year allowed farmers to grow more rice, with harvested acreage estimated at 559,000, up 33 percent from last year, according to USDA.
Vlach said he was able to plant all of his acreage this year. And because the price of rice is down, he said he’s been focused on crop quality and trying to get as much yield as he can.
“If you have more sacks to sell, then you’re better off,” he said.
Cooperative planting weather in the spring and favorable growing conditions throughout the season are expected to bring decent yields for California farmers. USDA projected production at 48.6 million hundredweight, a 30 percent increase from last year and the highest since the state’s record 2004-05 crop of 50.8 million cwt.
With a new California crop on the way and warehouses needing to make room for it, Kirk Messick, senior vice president of Farmers’ Rice Cooperative, said growers have offered good year-end discounts on their rice, allowing marketers to clear up some stocks.
“As far as warehouse space goes, we’re in good shape,” he said. “I’m just happy that we’ve got some rice moving now, although it’s come at the price of farmers not making as much money in the end.”
With markets in Japan, South Korea and Taiwan fairly stable, Childs said California rice exports will see gains primarily in the Middle East and northern Africa now that prices have dropped.
Messick said prices rose so high that they drove away customers in those Mediterranean markets, many of whom switched to buying other types of rice from other regions. Higher prices also attracted competing rice-growing regions to grow more medium-grain rice, the main variety that California grows.
Despite large stocks and a bigger crop this year, Messick pointed to some positive signs he said will help California rice growers: After two years of increased production of medium grain, Southern states such as Arkansas have pulled back because the price of medium grain isn’t as attractive as long grain, which the region traditionally grows. Australia and Egypt, the state’s biggest overseas competitors, also have reduced production due to drought.
“I think overall the market is reacting to an oversupply of rice internationally,” Messick said. “It’s not necessarily good for the farm economy locally, but in the end, it’s a healthy way of adjusting back to keep us competitive.”
Michael Dewit, who grows rice in Sacramento, Sutter and Yolo counties, said current prices are tough for farmers but he thinks they will improve in another year or two, allowing them to be more profitable again.
“We’re about due for a correction like this, something to shake up this industry a bit,” he said. “I don’t like it, but it might be a necessary evil.”
Because of depressed prices, Dewit said he reduced the number of herbicide applications this year in an effort to save money, a decision he said he now regrets because he’s created a seed bank for the weeds, which will increase his problems next year.
Luis Espino, a University of California Cooperative Extension farm advisor, said he’s seen a lot more fields that are “weedier than usual.”
Sutter County grower Mike Daddow said though weeds represent an ongoing issue for growers, they’ve been especially problematic this year. He noted that his son, who does custom herbicide applications, has had to go back to some fields multiple times because the weeds have become resistant.
Weather was also a factor. Espino noted that late spring rains allowed weeds to germinate just as growers were finishing their groundwork, giving the weeds a head start, which made them harder to control. Availability of certain herbicide products became a problem for some growers, causing them to delay their applications, thereby compromising their weed-management program, he added.
One particular weed problem researchers are trying to assess is the appearance of red rice in some California fields. Espino described red rice as a feral type of rice that’s hard to get rid of, because the seeds shatter easily and can stay in the soil for many years. Though levels of infestations are still low, current rice herbicides are ineffective at controlling the weed.
Red rice has been a problem in Southern rice-growing states for years and arrived in California as early as the 1930s, with reappearances in the 1960s and early 2000s, though it never took hold. Its origin is a mystery and it is unclear what triggered its current reintroduction, but researchers are trying to raise grower awareness of the weed so farmers could identify it should they see it in their fields.
“At this point, we’re more worried about what to do to try to reduce the infestations as much as we can,” Espino said. “It’s not causing any yield reductions or quality downgrades, but it has the potential to be a major problem, so that’s why we’re concerned about it.”
Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com. Permission for use is granted by the California Farm Bureau Federation.